The affluent are certainly looking for the highest quality financial services. Investment management expertise is the reason they engage financial advisors. In many situations, the ability to obtain advanced planning services—wealth enhancement, estate planning, asset protection planning—is also a major draw. 

While value-added services are not the principal reason the affluent will choose to work with or maintain their relationships with financial advisors, such services regularly prove to be very important in helping financial advisors solidify and strategically expand relationships with the affluent. This is especially the case with the ultra-wealthy. 

By being the professional to whom the affluent turn to deal with their concerns, including those matters that are not financial in nature, they become the “go-to” professional. As such, their relationships can become especially strong, even mitigating periods of substandard investment performance. 

Value-added services can be conceptualized in a number of ways. One very useful way to think about them is in the context of family offices. They fall under the umbrella of support services. Specifically, they are lifestyle services covering a range of specializations such as health care, family security, family education, philanthropy and advisory to name a few. Furthermore, there are also the special projects.

Lifestyle Services

Two types of lifestyle services are most in demand by the wealthy. Usually topping the list is health care (often in the form of concierge medicine) followed closely by family security. 

Concierge health care is regularly talked about as a singular service, but in reality there are many variations. Moreover, while there are many clear distinctions among the types of offerings today as the field of medicine continues to progress, it is more likely the differences will become fewer. For example, as mobile technology improves and the costs come down, tele-medicine options will multiply and may very well become standard components of all medical practices. Meanwhile, from the perspective of the wealthy, the following are a few of the high-demand concierge health-care capabilities:

• 24/7 immediate on-call physician: Quick access to a physician for timely diagnosis and immediate treatment saves lives and prevents acute problems from becoming critical.

• Second opinions: The ability to get second opinions for verification or for a different perspective is important to the greater majority of the ultra-wealthy. 

• Complete case continuity: Having a qualified physician overseeing treatment across specialists can be both comforting and informative. 

• Connected monitoring: With the adoption of smartphones and similar technologies, the ability of a physician to monitor a person’s health over long distances is becoming normal. 

• Tele-diagnosis and treatment: Related to connected monitoring and often a cornerstone to 24/7 immediate on-call physicians is doctors’ ability to use mobile technology to evaluate and treat people.

Comprehensive longevity programs are increasingly in demand among the affluent. It is probably fair to say that most people would like to live a long, long time in very good health. This is increasingly possible for the wealthy, but it entails integrating wellness, medical care, cutting-edge solutions and financial planning. Being able to introduce this concept to affluent clients and prospects is not only a highly effective way to build relationships but is also, because of the clients’ need for specialized financial planning as part of the process, a very powerful way to integrate financial advisory expertise.

Family security is also very important to ultra-wealthy families. Their wealth and sometimes high profiles are magnetic for criminals. There is a range of services that family security firms provide, such as:

• Privacy and cyber protection.

• Personal protection services.

• Travel safety and security.

• Investigations and due diligence.

• Confidential litigation support.

The wealthy are increasingly becoming victims of extortion schemes by criminals threatening to expose inappropriate relationships, allegations of abuse, undesirable photographs, etc. The talented family security specialist will troubleshoot the issue and provide the best evidence he or she can gather through an investigation. Then alternatives can be considered. For example, specialists may ask whether it is lawful and ethical to purchase documents, photographs and recordings. Sometimes, the wealthy do not want to involve law enforcement. They just want the problem to go away. So the family security specialist selected must be very good at making such problems go away. 

There are significant opportunities to tie asset protection planning and investment management with select family security services. There are times when structuring the situation entails using certain kinds of trusts and possibly captive insurance companies. The result is a need for money management services. 

Special Projects

Here the financial advisors are involved—to varying degrees—in project management. This is the catchall category for one-off engagements conducted on behalf of the wealthy. 

A financial advisor, for example, in the service of an ultra-wealthy family with direct investments spanning the globe arranged—using an external expert—for a number of the family members to have multiple citizenships and, therefore, multiple passports. This made travel and international direct investments much easier for the single-family office. It also enabled the family to legitimately lower their taxes. For a few members of the family, it also lessened the problems they were having with intercontinental dating. 

Some other examples of special projects include:

• Facilitating an adoption. 

• Buying an island.

• Overseeing the construction of a 60,000 square foot mansion.

• Arranging the paperwork and facilitating the process for admissions to a private club.

• Supervising the forensic accounting Arranging for a family member to be “disconnected” from a self-harm site and then to receive top-quality treatment.

• Restoring the identity of a family member after her company was hacked.

• Monitoring the accountant keeping the books on a movie financed by the single-family office.

• Identifying and working closely with a tax controversy attorney.

The list of one-off projects can go on and on. The need to manage such projects comes up intermittently—and sometimes not at all. These are all singular events. 

Using External Experts

What is critical to recognize is that the greater majority of financial advisors do not directly provide value-added services. Instead, these services are outsourced to specialists. At most, the advisors are providing some level of oversight and follow-up. Nevertheless, being able to access high-caliber specialists and refer them to affluent clients can prove extremely valuable for financial advisors. The basic process for selecting external experts includes:

• Specification. This entails determining as clearly as possible the types of value-added services to deliver. The support services noted above tend to be what most of the wealthy are concerned about. 

• Identification. This involves specifying particular external experts for each value-added service. The most common way financial advisors find these providers is through referrals. These usually come from the various trusted professionals financial advisors are working with. 

• Due diligence. This means vetting all potential providers. Due diligence is more and more done by carefully and often meticulously questioning the referral source, carefully evaluating references and sometimes even using investigators to check backgrounds and claims. 

• Selection. This is where financial advisors understand the specific working arrangement, appraisal metrics, costs, time lines and so forth. This enables them to stay on top of the situation when they make referrals. 

Implications

By providing top-of-the-line value-added services, financial advisors are positioning themselves as the “go-to” professionals for their affluent clients. As such, their ability to do more business as well as maintain and collect more assets to manage from their wealthy clients increases geometrically. Delivering value-added services is a very good way to mitigate the impact of relatively short periods of poor investment performance. 

Value-added services such as comprehensive longevity programs and some types of family security projects can readily translate into more business for financial advisors. In these situations, investment management plays a crucial role, because those financial advisors bringing the value-added services to the affluent are usually the ones who manage the assets.

Value-added services can also be very effective in generating referrals. Affluent clients are much more likely to discuss their comprehensive longevity program with their wealthy peers than they are to discuss their investment portfolios. Moreover, the ability of financial advisors to differentiate themselves with these value-added services can be very beneficial when the advisors are cultivating referrals from centers of influence. 

External experts deliver the value-added services. It is necessary for financial advisors to construct a set of specialists they have vetted and with whom they are comfortable. Moreover, these external experts must clearly understand that when and where appropriate, the financial advisor is involved. 

In conclusion, the affluent are generally highly motivated to obtain various value-added services. This is even more the case as one goes up the private wealth hierarchy. Therefore, for many financial advisors, it would be advantageous to be able to provide these services through carefully selected external experts.