Personal chemistry
Teamwork
Expertise
The field of wealth management often intersects with complex tax issues, regularly requiring the skills of an expert. And a specialist in a given field, asset protection planning to name just one, should have precise and up-to-date knowledge on his or her subject and also be able to convey that information in a credible and comprehensive way. Such expertise does not come cheap, but in our research we've repeatedly found that the affluent want the best available advice and are willing to pay for it.
The value of expertise is not just a matter of what a professional knows or how he or she can convey it to the wealth manager and the client, however: that expertise also extends to the information and insights that will rub off. Partnering with a leading expert can have the side benefit of opening a window on the latest industry thinking, a range of risk scenarios, various compensation structures and new marketing ideas. Moreover, by working together on client issues, the wealth manager can become that much more adept at identifying situations where a given specialist should be called in.
The Highest Ethical And Professional Standards
Any partner should also observe the highest ethical standards at all times. The nature of wealth management and the rewards can entice some individuals to push up against legal and ethical boundaries, creating anxiety, compromising everyone involved and quite possibly undermining client relationships. It's the wealth manager's job to make sure that doesn't happen.
Furthermore, since it's impossible to foresee all of the business opportunities that might come up in advance and negotiate how they'll be remunerated, advisors must not only trust one another but also be able to articulate and comfortably discuss their ethical standards. In addition, each specialist in a network should be highly professional in every way, whether it's a matter of promptly returning phone calls, showing up for meetings on time or dressing appropriately when seeing a client.
To that end, each must be thoroughly vetted. This can be done in a number of ways, including checking their credentials with other advisors, with their clients, following up on their references and, if possible, conducting formal background checks.
The Question Of Chemistry
All of the expertise in the world isn't going to be worth much if there's no rapport between the wealth manager and the specialist wielding that knowledge. There needs to be chemistry, and the job of recognizing and building it is in the wealth manager's hands. When we asked independent financial advisors about their biggest challenge when working with other advisors, one-third cited a lack of chemistry (Exhibit 2). Over three-quarters found that the specialists were not as expert as they professed to be, and nine out of ten said that the specialists they brought in tried to steal their clients.
The best way to see if a wealth manager and a specialist are going to hit it off is for the two of them to spend time talking about their approach to business or, better still, working through a real client situation where viable solutions are brainstormed. Choose the acid test wisely, however. Addressing the highly complex issues of a very challenging client may not be much of a proving ground. Instead, choosing an "average" client and an issue that calls upon the specialist's at-hand knowledge is often a better chemistry test.
Team Players Wanted
For a network to run smoothly, each specialist has to understand his or her role and to know who's in charge and who "owns" the client-the wealth manager.