The capability to offer strategic planning and a collaborative approach using in-house experts as well as outside professionals (i.e. attorneys, CPAs, insurance agents, realtors, etc.). Wealthy families need to address intergenerational wealth transfer challenges; to employ well-structured estate-planning techniques; to avoid unnecessary estate, gift, capital gains or income taxes; to receive proper management around concentrated positions; and to get good communication from their advisors. Some firms, such as trust and estate lawyers, insurance experts and tax specialists, may already have this in-house expertise. Other wealth managers may need to establish external partnerships. But it is important to know when to bring in outside experts and have them readily available. No single person can effectively deliver a wealth management solution on his own; utilizing resources outside your specialized area will help you maintain a wealth management program tailored specifically for your client's objectives and constraints, one that can adjust as the situation evolves.
An on-going process with a client that identifies critical goals, creates solutions to problems and confirms the client's satisfaction with the outcome. Goals and priorities change. Don't assume that your client will think to call you when a significant career or family event occurs that could dramatically alter how their wealth management plan should be structured. Major life events, like marriage, divorce, births, deaths, retirement, sending a child to college, as well as significant decisions-buying a home, changing jobs and moving-often have a significant impact on an individual's wealth management needs. It is important that a wealth management plan reflects these evolving changes. On-going communication will only help enhance and build the client relationship.
Wealth managers need to be very clear with themselves and the general public about what they do and who benefits. Wealthy individuals, families and their advisors also need to ask the right question when employing a wealth manager to ensure they're getting the services they need.
When the term "wealth management" was created, perhaps it was, simply stated, financial planning for individuals with taxable estates. But the definition, in addition to including the idea of sustaining and growing a family's wealth in a tax efficient manner over the long-term, should also include providing guidance on intergenerational wealth transfer, trust and estate planning, creating a family legacy and preparing the next generation for the responsibilities and opportunities that wealth creates. In simple terms, "wealth management" must speak to the specific and unique challenges associated with being wealthy. It is not only about managing assets, but also about the complex and nuanced process of growing and preserving wealth after-tax, bringing to bear trust, tax, estate planning and related disciplines to the management of the client's financial affairs. Today's affluent clients typically need access to sophisticated operational and Web-based capabilities, as well as access to a large array of investment capabilities and estate-planning strategies in order to create a well-tailored, diversified portfolio.
If we are to deliver on the high standards that we have set for ourselves as wealth managers, we must be certain that our capabilities match the expectations we set for our clients.
Peter A. Carnathan, CFP, is a senior vice president of Fiduciary Investment Management International and vice president for business development of Fiduciary Trust Company International. Michael M. Mariani is senior vice president, deputy general trust counsel and director of trust and estate services at Fiduciary Trust Company International. Fiduciary Trust Company International, a leading wealth management firm, has served individuals, families, endowments and foundations since 1931. For more information on Fiduciary Trust, please visit www.fiduciarytrust.com.