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Happy young dad and his daughter playing on board of a luxury yacht on vacation
Feb 28, 2018

As your wealth has grown, has your family adjusted its wealth management requirements?

Statistics show that the fastest-growing wealth class over the past several years has been that of the affluent class—families or individuals with wealth in excess of $2 million.

Evidence also points to the number of financial service providers wishing to acquire these affluent families as clients rising right alongside the number of families.

The problem is, the level of these service providers’ expertise and comprehensiveness and the number that observe a fiduciary standard have not kept pace with the need.

Meanwhile, many of the more skilled wealth managers are working with individual families or multifamily offices with minimum-asset requirements of $25 million or more. This has created a large community of affluent individuals and families lacking the asset-management services they require.

Certainly, there are solutions these affluent families can seek, but that takes some investigation and knowing what to look for from an advisor.

Whether a particular affluent family is new to wealth or has grown into this status, its members will always be wise to perform meaningful due diligence to determine what wealth-management services they need and what professionals are best equipped to help them reach their financial goals.

To get started on your own family’s search, consider these four questions:

1. Have you reassessed your wealth-management needs?
Many affluent Americans share a common problem, which has left their wealth-management needs underserved: They haven’t adjusted their requirements for wealth management as their wealth has grown.

Most commonly, a shift in priorities has occurred, such as an evolution from wealth accumulation to wealth protection and risk management. Also, these families’ teams have expanded to include estate planning, insurance and tax experts. Most important, while these families’ wealth goals have shifted, their team members’ strategies have not.

2. Has your team’s expertise grown with your wealth?
If your family’s needs for more specialized, higher net worth-focused services have increased, so should the capabilities of those serving you.

While an advisor’s desire to serve your family-wealth needs independently is admirable, a professional with the proper experience and aptitude can do more with your assets. So, form a strong relationship with your advisors and know whom they work with. Are they like you? Can they offer you strategies, advice and guidance on issues that haven’t previously been considered?

3. Are your advisors conflict-free?

Making sure your advisors are working for you and your interests, without conflicts, is more important than ever, as there is more at stake. You can’t afford to find out after the fact that the sale of a product or strategy carrying a large commission or load was offered without consideration of a more appropriate choice.

The advice you receive at this level must be delivered by professionals who are working on a fiduciary basis and are committed to delivering service that puts your interests first and foremost. 

4. Is your team playing together with a common goal?

As your wealth has grown, you have likely engaged various professionals: a CPA, estate-planning attorneys, insurance specialists and perhaps multiple asset managers.

Are they working together? Do they have a common understanding of your family wealth goals? Is there an independent fiduciary coordinating the team to ensure your wealth is directed in the most effective manner?

It’s quite common for these answers to be “No.” Moreover, when your team is not well coordinated, it’s easy for conflicting strategies to be implemented, or for details to be left unaddressed. This can result in inefficiencies, missed opportunities and goals that are not achieved.

To avoid such pitfalls, get honest answers to these and all your questions and find a wealth-management advisor who can lead a coordinated strategy with each of your service providers.

In essence, then, you need a “family CFO” to keep up with each of those who serve and guide your family’s wealth goals, and who does so in a fiduciary manner that puts your needs first.

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Disclaimer: Worth magazine is a financial publisher and does not recommend or endorse investment, legal, insurance or tax advisors. The listing of any firm in the 2018 Worth® Leading AdvisorsTM Program does not constitute a recommendation or endorsement by Worth magazine of any such firm and is not based upon Worth magazine’s experience with, or prior dealings with, any advisor. The information presented for each advisor, including but not limited to any related profile, statistical data, presentation, report, commentary, recommendation or strategy, has been provided by such advisor without review or independent verification by Worth magazine. Any such information is the sole responsibility of the advisor. Worth magazine makes no representation or warranty as to the accuracy or completeness of such information, assumes no liability for any inaccuracies or omissions therein and disclaims responsibility for the suitability of any particular investment recommendation or strategy for any person. Nothing contained in Worth magazine constitutes or should be construed as any form of investment, legal, insurance or tax advice or as a recommendation to buy, sell, hold or trade any securities, financial instruments or assets. Readers are advised to consult their legal, financial, insurance and tax advisors prior to making any investment or pursuing any investment strategy. Past, model or hypothetical performance is not indicative of future results.

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