It's standard practice for wealth managers to seek help from accountants and attorneys to meet the needs of their high-net-worth clients. But it may be time for advisors to consider using another outside expert: a property and casualty insurance specialist.

Many wealth managers are indeed beginning to recognize the importance of such consultants, and the role they play in helping wealthy clients mitigate risk. By adding a property and casualty expert to its team of accountants and attorneys, a wealth management firm can create a triad of disciplines that serves as a strong foundation for serving clients.

P&C insurance-often overlooked in financial planning-is an integral tool for managing a client's risk. The insuring of hard assets such as homes, cars, yachts and jewelry, and the liability associated with them, should be a standard part of wealth management.

Advisors, however, may be intimidated by the idea of adding a property and casualty specialist to their practices. This is partly due to the fact that advisors often do not have the training to conduct due diligence on an insurance professional. They simply don't know the right questions to ask. General securities license training, for example, does not require property and casualty insurance education. For many financial services professionals, insurance training focuses on life insurance and annuities.

One exception is the curriculum for the Certified Financial Planner (CFP) designation. CFP candidates receive about 35 hours of property and casualty training in their first 180 hours of course work, according to professor Michael Snowdon of the College of Financial Planning. Snowdon, however, acknowledged that property and casualty insurance often isn't part of a CFP's day-to-day work.

In this article, we take a look at how advisors can bridge this knowledge gap and competently conduct a search for a property and casualty consultant.

Due Diligence
There are typically two types of insurance consultants to choose from when it comes to serving the high-net-worth market: independent agents and large risk management firms such as Marsh and Hub International.

Independent agents specialize in working both with wealthy clients and the underwriters who can provide the insurance limits and expertise for that market. These underwriters include insurers such as Chubb, AIG subsidiary Chartis, Fireman's Fund and Pure.
The large risk management firms may rely on the same insurance underwriters used by agents, but are able to provide additional risk management services to affluent individuals.

Which one is the right choice for your wealth management practice? You may occasionally need or want the services of either one depending on the client. Therefore, you will need some tools to evaluate which will be the best for your situation.

Note that we did not mention mass-market insurance companies. This is because they generally cannot provide the policy limits or tailored risk management needed for the affluent market.