One Strategy for All Net-Worth Levels? It Can Be Done, Exec Says

That is, success in the UHNW segment doesn’t need to come at the expense of growing the business in the high-net-worth and mass affluent segments. Instead, Coyle said, it’s possible to craft a coherent and scalable strategy that lets wealth managers move up and down market with relative ease. With such an approach, advisors can diversify their businesses and help to meet the financial planning needs of more Americans across the wealth spectrum.

“Our tagline at Libretto is that we want to help financial advisors make every client feel like they’re worth millions, even if they’re more mass affluent than high-net-worth,” Coyle said.

Here are some additional highlights from our conversation, edited for length and clarity.

THINKADVISOR: Can you briefly tell us the story of why you came to found Libretto?

JEFF COYLE: Sure thing. Before Libretto I spent most of my career working for the most affluent families here in the U.S., having founded three boutique firms that focused on those types of clients. Throughout my career, I've also had a longstanding focus on building systems for efficiently and effectively managing highly complex wealth cases.

I would say that this focus on technology and systems itself came really out of a sense of self-defense to deal with the sheer complexity that comes along with taking a household approach to serving highly affluent, inter-generational families. Their financial situations can involve all manner of assets, liabilities, goals and needs, and it's just too much to handle with spreadsheets or simple calculators.

To get to the story of Libretto, about 15 years ago, a large private bank acquired my last wealth management system, and I spent a couple years there as an operations and strategy executive. We spent that time implementing the system across the bank, and I continued to learn more and more about wealth management strategy and technology implementation.

When I moved on from that work, it was to found Libretto. It’s really the culmination of all of that experience I gained working with families with more and more wealth and just trying to solve their problems in an efficient and scalable way.

THINKADVISOR: How is the platform applicable across the wealth spectrum? And how can advisors think about building a strategy that works from the mass-affluent to the ultra-wealthy?

COYLE: It’s actually pretty straightforward to explain. You can imagine how a system that can take into account all of an ultra-wealthy household's liquid wealth, goals, liabilities and investments would be useful for helping an advisor manage the complexity, right?

Those systems and processes are extremely valuable in the ultra-wealthy markets, to be sure, but in a sense they are actually even more valuable for people of a more modest amount of wealth. They just can't afford to make mistakes, or else they will be putting their financial security and their preparations for retirement in jeopardy. Like the ultra-wealthy, they also need to take a household, integrated approach to making big financial decisions.

Take the question of Social Security claiming, for example. Our platform can help an advisor quickly analyze and plan around the present value of Social Security for a retiring household, which for the typical American household is something between $1 million and $2 million.

We're able to demonstrate that Social Security can behave within a broader retirement income strategy like an inflation-protected bond. If your advisor doesn’t demonstrate what this means, you as an average investor aren’t likely to make optimal claiming decisions or to understand the significant value that Social Security is going to deliver to you over the retirement period.

The inherent level of complexity may be higher for an ultra-wealthy household versus a typical mass affluent investor, but both groups are going to be better served by an advice framework that is built on assessing and meeting liabilities and pursuing long-term goals from the household perspective rather than running Monte Carlos and risk questionnaires.

THINKADVISOR: Are there any common threads or challenges that the typical advisor who chooses to work with Libretto is trying to solve?

COYLE: To put it simplistically, I would say it is advisors or firms that are very focused on sales, on the one hand, and they’re also very focused on the merit of the solution from an existing-client-service perspective.

The key is to see these two things as two sides of the same coin or the same spectrum, if you will. When you are able to deliver a more compelling value proposition for the households you now serve, that is naturally going to elevate sales success.

Inorganic growth gets a lot of attention these days, but organic growth is still so fundamental to success, and the only way you build an organic growth engine is by winning more than your fair share of the market and increasing your wallet share with the clients you have. Our solution is about helping advisors go beyond managing a portfolio to instead be managing the client’s total wealth — however big or small their net worth.

When you're using these methods, you can work with clients of any level of wealth, and there’s a particularly interesting opportunity to increase your presence in the mass-affluent space and win new client after new client. It’s not a bad way to make a living when you’re able to put a really good technology system in place that lets you significantly streamline your process.

I also think there’s a very interesting segment in the high-net-worth market, say the $10 million to $50 million range. Many of these cases actually aren’t as complex as you might assume from the outside, but the potential revenue is meaningful. If you can put an efficient process in place to manage these households' wealth and deliver great value, the opportunity is huge.

Pictured: Jeff Coyle