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Wealth planner David Savir

Financial Planning > UHNW Client Services > UHNW Client Advice

Why ‘Retirement’ Language Falls Flat With the Ultra-Wealthy

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What You Need to Know

  • RIAs have a lot to offer ultra-high net worth clients that banks and brokerages can’t deliver, family office wealth advisor David Savir says.
  • One key for RIAs looking to win UHNW clients is to look beyond financial independence, which they have already achieved.
  • Clients with $10 million or more can require expertise in complex and diverse areas like trust planning, tax-loss harvesting, private aviation and fine art.

Many financial advisors are comfortable working with clients who are building substantial wealth, with the goal often being to earn enough from working income and investments to achieve a stable, dignified retirement — and to potentially pass some excess wealth to the next generation or an important charitable cause.

In the experience of David Savir, co-founder and CEO of Element Pointe Family Office, working with ultra-high net worth clients is different, especially once the investable assets top $10 to $15 million. Given the size of their fortunes, clients in this range have a unique perspective on wealth, and they tend to have a set of goals that varies substantially even from the mass affluent.

With this difference in perspective, Savir says, advisors who want to break into the UHNW space must retool their approach. Specifically, the framework of pursuing “financial independence” or “sustainable retirement income” just won’t resonate with the ultra-wealthy, because this independence already exists.

Instead, advisors with ambitions to enter this marketplace must be “true, holistic wealth planning consultants” for UHNW clients, Savir says. Success requires expertise on topics that range from trust planning and tax-loss harvesting to private aviation and art collection curation.

While the work is more demanding, it is often very meaningful to see the impact UHNW clients can have on their communities. And, Savir says, the benefits to the firm are significant as well.

Selecting the UHNW Niche

Prior to co-founding Element Pointe in 2016, Savir worked as a vice president at J.P. Morgan Private Bank, directing a team of investment and lending professionals in advising ultra-high net worth clients throughout the U.S. As he recently told ThinkAdvisor, Savir has spent his entire working life in the high-net worth arena, having begun his career in the investment management division of Goldman Sachs.

Working in those settings was a great education, Savir says, but it also inspired a vision and a desire to do things differently. This vision was shared by Carlos Dominguez, Element Pointe’s other co-founder and chief investment officer.

“The genesis of the firm is that we saw there were needs of ultra-high net worth clients that were not being met by the current business models out there at the big banks and brokerages,” Savir says. “The families with which we worked at J.P. Morgan or Goldman had balance sheets that were so large and complex that they effectively needed a CFO or a CIO. Banks and brokerages aren’t really wired for that.”

Savir says the services of the banks and brokerages are useful, but they are fundamentally limited in that they are product distribution businesses at their core.

“Yes they ‘manage’ money as well, but the true planning and consultation is not in their DNA, and FINRA’s rules against ‘selling away’ make it untenable for them to do what we can do as a fee-only RIA,” Savir says. “We had a strong conviction that we could differentiate ourselves in this space as a fee-only RIA, where our sole source of revenue comes from advising clients. It’s great to be able to have that true alignment.”

Savir says the firm at first tried to also serve the mass affluent marketplace, but it soon became apparent that the planning needs of the two markets were different enough that true specialization was needed.

Why ‘Retirement Planning’ Is Often Irrelevant

Regarding these planning needs, Savir says, one big difference between the two client groups is the scope of goals being considered. For many clients in the middle class and the mass affluent, financial advisors are asked to help with retirement planning and the effort to build shorter-term financial wellness.

Much of the work on the accumulation side involves coordinating tax-advantaged retirement plan assets, health savings accounts, 529 college savings accounts and taxable brokerage accounts. Then, the decumulation effort involves tax-efficient retirement income planning and, in some cases, relatively modest but still meaningful legacy planning.

These needs exist for UHNW clients, to some extent, but the overall planning needs are much more expansive, Savir explains, and the most important goals in the eyes of the clients tend not to be so personal.

In the case of Element Pointe Family Office, for example, the current new-client minimum is $15 million in investable assets. This is enough for any individual or family to immediately stop working and enjoy a “retired” life.

“Given that basic fact, ‘retirement’ as a concept is not really the goal or topic of our client conversations,” Savir says. “Instead, the focus is on finding a bigger purpose for their wealth, and putting a wealth plan in place that addresses personal fulfillment and intergenerational legacy. Baring extreme levels of spending, most of the clients we are dealing with will never run out of money in their lifetime.”

That being said, even clients with what can fairly be called a massive amount of wealth still worry about worst-case scenarios.

“It’s really interesting, because the most common question we get doesn’t really change depending on the amount of wealth, whether a person has $15 million or $500 million,” Savir observes. “What they want to know is, ‘How much can I responsibly spend while still achieving my long-term legacy goals?’”

Savir says this is the case because many clients become UHNW individuals after the sale of a successful business that they had spent substantial time building and operating.

“So, these people probably were used to drawing a substantial salary, and they were able to use that regular income to build a budget and steadily grow their wealth,” Savir explains. “In coming to work with us, they have often just sold their business, and now they have a really significant pot of money that they have to steward for the long term.”

More Than Investments

Savir says another big part of the deliverable that has brought success to the firm is what he calls “curated lifestyle services.”

“One cool thing we have done is build a curated shortlist of best-in-class providers in different spaces, from cybersecurity to private aviation to curation of art collections,” Savir says. “These are areas that we know are raising challenges in the lives of our clients, so we make sure we have the right experience and the right relationships to help them navigate what can be some complex needs.”

According to Savir, cybersecurity is a major topic right now, because UHNW people are principal targets for hackers and malicious identity theft.

“Frankly, a lot of really wealthy people haven’t treated their personal tech stack like a business would, and that’s an issue,” Savir says. “Just like a business with substantial sophistication and assets, they should be doing penetration testing on their systems and having professionals set up and monitor their networks.”

Attracting the Right Talent

Asked for other tips about finding success in the UHNW space, Savir emphasizes the importance of securing top talent and making the firm an inviting, attractive place to work for skilled staff.

“One of the keys to this at our firm is that we have created pathways to partnership,” Savir notes.

In first founding the firm, Savir explains, his instinct was to retain all the ownership among the two founding partners, and to try to attract talent via generous salaries and benefits.

“However, I have a mentor who is the founding partner of a very large law firm, and before we started Element Pointe, I sat down with him and told him about my approach,” Savir says. “Well, he quickly set me straight. He told me I would never be able to attract and retain talented people if we didn’t give them this path to partnership, simply because the most talented people will leave and start their own firms.”

Savir says there are some creative and innovative ways to create ownership opportunities for junior advisors and key staffers, for example through “phantom equity arrangements.” This is similar to the approach his firm is taking, Savir says, and it is working out fantastically.

“We feel strongly that this is the way to build a truly strong and stable firm,” Savir says. “It’s gratifying to see that some of our earliest team members are now participating in a [stock-] appreciation-rights plan that we created. When we eventually invite them to be partners, that phantom equity can financially support their taking some ownership of the firm.”

(Pictured: David Savir)


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