Simply because Olmstead preferred to work on complex projects didn't mean that he lacked enduring client relationships. "He has long-term relationships," Lau says. "He just didn't want to spend the time to build the infrastructure to [manage them]."
Like Olmstead, many of Lau's clients were living off their assets, even those who worked. But she had developed the family-office type of services, like cash management systems and budgeting processes that make clients in this position feel more comfortable. "Clients were starting to ask for more services, including paying the bills, doing taxes, cash management and estate planning," she says. "We have to have the background and expertise to help clients figure out what's important to them and what kind of legacy they want to leave. John brings creativity and knowledge of what's possible to these situations. If you can help someone figure out what makes a difference in this world, that's huge and it lights up their eyes. This is where we get really excited."
Lau and Olmstead were introduced about one year ago by a mutual friend, who said, "I know this person you need to meet," Lau remembers. "She had been in the family office world for a long time." Lau was looking for a person who was a good fit for what her firm did in the financial planning world, but who also had skills and expertise to perform some of the sophisticated services for which clients increasingly were looking.
As Olmstead viewed it, Lau's growing portfolio of services frequently were services his clients were seeking somewhere else. "We [Judy and I] were in different worlds with some overlap, but it was the areas of overlap where we were both focusing," he explains. "The Lau group doesn't just give investment advice and financial planning advice. They offer a lot more different services and go way beyond allocating assets."
In fact, her firm was already involved in some of those services before it merged with Olmstead's in February. "We do a lot of family consulting and facilitating of family meetings," she says. "We try to come up with a common vision of what families want to do with different pots of money."
Why is finding a common vision so important? "Because a lot of family members who have a lot of assets have assets that are joined by trusts," she explains. "Some family members get along famously. Some don't. Often they have different points of view. But if you can get a consensus, it's a real accomplishment. Sometimes you can't. We do a lot of client mentoring, helping them understand both money and their relationship to money. Money is inherent in all family relationships."
Olmstead himself is more than familiar with the issues confronting wealthy families. Often it's a matter of explaining the individual situations of different family members, he says. "A little bit of clarity goes a long way," he adds.
Olmstead, for one, doesn't believe F. Scott Fitzgerald's comment that the "rich are different from you and me." Families with great wealth "aren't that different," but their financial issues are more complex. "With our clients, it's important to be coach of the team because they often get very different advice from their different advisors," he continues. "Many have lawyers and outside business advisors. Understanding the relationship between tax law, trust law and developing a risk/return profile is critical."
In the 1990s, Lau's client base migrated toward the high-net-worth market but, unlike many advisors in a similar situation, she didn't abandon the smaller clients who helped the firm get started in its early days. "We need to honor both groups of clients," she says. Today, the firm's minimum is $2 million in assets, but most new clients have significantly more.
Although a common thread running through both their client pools is that many are living off, or at least relying on, their asset bases, they also have clients with other issues. Some clients have built sizeable businesses, but reinvesting in their companies has limited the growth of their investable asset base. "Quite a few clients are doing the job that lights up their eyes," Lau says. This group includes artists, writers and musicians. "A smaller group is making large amounts of money and building their asset base."