Picking The Best Wealth Advisor Is A Daunting Challenge
Topics: Wealth Management Jobs, Asset Management Jobs, Private Banking Jobs
In fact, amid the chill winds of the credit crisis, making the smart choice looks particularly daunting.
Certainly, the wealth management industry as a whole needs to do a stronger job of helping actual and potential clients choose the advisory channels that suit their needs and ambitions best, argues David Poole, managing director and head of business development for Citi Private Bank in Europe, Middle East and Africa. Mr Poole can claim he speaks from deep experience - he has worked at Lazard Brothers, NM Rothschild, Singer & Friedlander and Merrill Lynch.
I dont think the industry has done a good job at explaining what the options are, Mr Poole told WealthBriefing during a recent conference call alongside John Rhodes, a consultant to the private client division of Stonehage, the UK-based multi-family office. A veteran of the private client industry, Mr Rhodes previously worked at the law firm Macfarlanes for 40 years.
As both men explained, it can be easy for wealthy families to make the mistake of recruiting too many advisors rather than too few, as all may offer similar but subtly different ideas, ending up in confusion, potential conflicts of interest and high fee bills.
One issue to watch is when advisors try to jostle for control over a clients affairs. It is very important that a client appoints a lead advisor who can then appoint sub-advisors. Too often, big families get into a spiders web of advisors. It is very important to keep the structure simple, Mr Poole said.
Mr Rhodes, meanwhile, said that in response to such potential confusion, one route has been for families in the ultra high net worth space, for example, to go down the route of creating a single family office. There has certainly been growth in this sector but there can be problems, he said.
Investment advisors would tell you not to put all your eggs in one basket and you should not expect all wealth management advice to come from one basket either. There is an issue for those who go for a single family office model, said Mr Rhodes.
It single family office sounds like a great idea and probably will work all right for a while. But the situation can become ossified and if you go down a generation or two you can become comfortable and there is not sufficient access to different, cutting-edge advice, Mr Rhodes said.
The choices are wide - high-end independent financial advisors, accountants, lawyers, private banks, wealth managers, freelance consultants, single and multi-family offices.
Crucially, the would-be client needs to first hire an advisor who can take a broad view of a persons broad financial needs and who can be trusted with the powers to delegate to others to obtain specialist advice. In particular, a client must beware of advisors who try to give views on areas outside their core expertise, as can and does happen if an advisor is frightened that outsiders might poach his recently enriched client.
In all of these situations, families tend to look to one lead advisor otherwise life becomes very confusing for them. One has to be the chairman of the board in how things are to be done, Mr Rhodes said.
It, the advisor can be a family lawyer, accountant, private banker. It will be one of these people who will be lead advisor, someone with a reasonably good knowledge of what is going on in a wealthy family. From the familys point of view, it will often be clear who the right person is to be that lead advisor, he said.
There are a lot of wealthy people who struggle about what to do with their immediate family. Sometimes they get it right but sometimes they get it completely wrong, Mr Rhodes said.
A key issue in judging a good advisor is chemistry. Are you talking to someone who has the same outlook on life as you? I am not talking about whether you went to the same school as them. Rather, the advisor has to have a clear-sightedness, the ability to see the big picture, said Mr Rhodes.
Although much of the advisory market can appear dauntingly confusing, paradoxically there are relatively few choices in some sectors, such as stand-alone firms providing advice on investments for rich families in the UK. There is a handful in the UK, Mr Poole said, giving examples of Cambridge Associates, Unigestion, Jewson and Lord North Street.
The advisory market is also changing; both men cited the examples of law and accountancy firms offering, or potentially providing, investment advice. Mr Poole said he was concerned about recent UK legislation paving the way for possible flotation of law firms and similar professional bodies.
I think this is a potentially worrying development, given the conflict of issues that may arise, he said
Tom Burroughes, Editor, WealthCareers.com Specialists in Wealth Management Jobs, Asset Management Jobs and Private Banking Jobs - www.wealthcareers.com
Previous Articles Highlighter:
How The Retailers Make You An Impulsive Buyer (1)
The most profitable department is usually the first one you run into, such as the cosmetic department is front and center. That's because it's very profitable, and by putting it in a place where people walk by time and time again, customers are more prone to making a purchase on an item with a very big markup.
The Differences In Real Estate Investing, Flipping, And Fixing (2)
Usually with the help of a property management company, the main goal is rental income instead of a large sum payout received by selling. These investors may eventually sell a property, but the purpose of buying is to rent.
A Forex Program Designed For You To Quickly Learn Currency Trading And Be Profitable At It (3)
A Forex mentoring program is a great way to really start making money quickly and understand the reasons you are profitable. This type of instruction allows you to dig deeply into the finer points of the market and understand why, how and when a professional Forex trader makes an investment.
Monte Carlo Rocks The Property World (4)
'The problem with Monaco property prices', they say, 'Is that there are no official statistics to show what is happening across the Principality. Monaco is probably unique in that the country doesn't collate the figures.
Credit Cards Loans Can Help With Your Debts (5)
Topics: credit cards loans, credit cards debt, credit card payment, best credit cards, credit card companies It is something that you hear about frequently. A person gets their very first credit card, or maybe a couple of them, and in no time at all they go wild on shopping sprees and start spending their "plastic money" like crazy.
Many People Are Reaping Financial Rewards Thru Forex Investments, You Could Also (6)
William R. Alheim, Jr. possesses a Masters of Accounting Degree from Florida International University. He is a Certificated Public Accountant license issued by the state of Florida.
How To Shop On A Limited Income! (7)
Topics: saving money, local thrift stores, goodwill, corpus christi real estate, dallas real estate With the holidays just around the corner, everyone is trying to figure out how to save money.
Interested In Real Estate Listings In Florida? (8)
Some good places to look at are Naples, Islamorada, St Petersburg, and Venice Beach. The prices I've seen thus far for the properties located in these places have been very fair.
Learn Forex Trading - The Number 1 Mistake Novice Traders Make That Professional Traders Never Make (9)
William R. Alheim, Jr. possesses a Masters of Accounting Degree from Florida International University. He is a Certificated Public Accountant license issued by the state of Florida.
Timing Your Shopping To Save Money (10)
Chip manufacturers turn out upgrades quickly, about every three months, with major computer manufacturers following suit. Hence, a good rule of thumb to follow is to buy in the middle of the summer to take advantage of the back-to-school sales or the winter holiday markdowns.
Five Ways To Curb Expensive Car Repair (11)
If you're brake pads were replaced last year, odds are you probably don't need new ones just yet. Likewise, if a problem is identified that you paid to have worked on previously, you may be able to get a discount on subsequent work.
Purchase Your Dream Home In New Jersey! (12)
Obviously the more money you put down the lower your monthly payments will be. A lot of people rent apartments or houses thinking that they couldn't possibly ever afford a down payment, but if you really think about it; you could.
Fighting Foreclosure: 4 Tips For Dealing With Foreclosure (13)
This will get you out from under the mortgage, but there is the deficiency that will have to be dealt with, in one form or another. Some lenders will write it off, but it will more than likely be considered income and you will have to pay taxes on it.
Bad Credit Lenders For Those With Poor Credit History (14)
The savings you can achieve by following their tips to improve your credit score can be considerable over the term of your loan. So you really should do everything you can to improve your credit score before applying.
Negotiate With Your Lender And Stop Foreclosure (15)
I've been a real estate agent a long time, and most of the clients that call me to try and save their home, have never picked up the phone, called their current lender and tried to negotiate and stop foreclosure.
Save Money And Send Your Kids To College (16)
Choose the one with the highest interest and pay as much extra on it as you can until it is paid off. Then move on to the next one.
Fourteen Of The Most Important Tips To Select The Best Penny Stock Picking Robot (17)
For an 8-week free trial of the Penny stock picking robot that answers all the above concerns positively, and a free newsletter to help you find ways to double your stocks, visit: www.lunamercato.com Bernice Eker is an expert on stock picking and wants to help people by sharing her expertise.
Opportunities Abound In Minnesota Real Estate (18)
Waiting to take advantage of these real estate opportunities might mean you will spend more or miss out on the property you really want. Also, current interest rates on home loans are phenomenal.
The Top 12 Reasons Why Print Real Estate Ads Face Extinction (19)
You're out of luck if you're past the newspaper's deadline. But the internet is fluid. The information is easily updateable. Last minute changes can typically be accommodated within minutes or seconds.
Homes For Sale In The Pennsylvanian Area (20)
Even with the fact that many properties are being sold and being purchased in Pennsylvania, the real estate agents and brokers are blooming! It is thus essential that if you want to win in the Pennsylvania real estate industry, your service has to be wonderful and professional as well.
Newer Articles Highlighter:
Recruiters Say Wealth Managers Win High Pay Deals Despite Credit Crunch (1)
There have been few redundancies, a number of senior appointments, while larger organisations such as Barclays Wealth, Coutts and Rensburg Sheppards continue to expand their operations throughout the region. People are still moving for the usual reasons, such as better prospects, more money and location.
Tips To Choose The Best Online Savings Accounts (2)
If a bank offers both savings and checking accounts, you can instantly transfer from savings to checking and then access the funds via the checking account. If you have a savings and checking account combination, you can start evaluating the bank with the criteria you reserve for regular banks, such as ATM access, branch access, and branch services and so on.
Tips To Resist Impulsive Buying (3)
You can study it as you go past and make up your mind later about the item. Never go by an item twice unless absolutely necessary. If you go down an aisle, start at one end and continue all the way out the other.
What Are Travel Service Credit Cards? (4)
You can save yourself money in interest charges if you pay off the outstanding balance on your statement before the grace period expires, which is the due date on the statement.
Ada County Tax Assessor Wrong Again - Taxes Go Up (5)
When this should be the time of year spent with family, reflecting on the great memories made over the year and giving to people in need, we can not forget about the time and commitment we have to dedicate to disputing our Ada County homes tax assessed value.
Re-mortgaging Advice During The Credit Crunch (6)
Don't forget the fees. In the past many lenders rolled their fees into your mortgage. I.e. if you incurred costs of 1000 pounds you just borrowed a grand more.
Where Should You Be Investing Your Savings? (7)
Again, this could be a seen as a great time to invest in property if you do have sufficient funds. Pension schemes have not had the best track record and there seems to be a trend showing public opinion swaying away from investing years of savings in pension schemes and looking elsewhere.
The Importance Of The Long Term Trend When Investing In Shares (8)
By long-term trend I mean looking at the weekly, monthly and maybe even the quarterly charts of the companies you are interested in investing in. If the price chart is sloping upwards on these time frames, then you obviously have a share that it is in a firmly established long-term upwards trend.
Importance Of Comparison Shopping (9)
Topics: Comparison Shopping , Shopping , Money Saving , Finance Most major products and services come with a range of prices. Shop around and there's a good chance you'll uncover a lower price for the exact item or service you're looking for.
Is An Owner Builder Loan Recession Proof? (10)
The beauty of owner builder construction loans today is that there is an over supply of sub-contractor labor available to the borrower. As an owner builder, you can easily find sub-contractors who are willing to work for a fraction of their past costs.
Hattiesburg Real Estate -- The Best Of Mississippi (11)
Johnson State Park) set in the heart of Mississippi's "Pine Belt." The historic neighborhood district is another unending source of delight for visitors and residents of Hattiesburg alike, with 115 acres of a variety of architectural styles from Italian Renaissance to Victorian, originally built between 1884 and 1930.
Forex Trading: No Longer Just For Professionals (12)
But as any investor would do well to remember, forex trading can also throw out nasty surprises, even if events such as Britains ejection from the European Exchange Rate Mechanism in 1992 are thankfully relatively rare.
Family Limited Partnerships Seen As Next Big Thing In Wealth Planning (13)
In one recent case, assets totalling 30 million were put into a vehicle. The total size of this sector, if it takes off as Mr Krause expects, could expand significantly.
Foreclosures Soar: Reverse Mortgages To Aid Distressed Seniors (14)
Mortgage delinquencies and foreclosures are expected to continue to soar as the jobs-lost numbers continue to worsen. While the delinquency rates hit almost 7% (those include all borrowers who are more than 30 days past due on their mortgage payments), almost 3% of all mortgage holders are in some phase of foreclosure proceedings (2.97%).
Risk Appetite Models Face Ultimate Test (15)
Credit Suisses Mr OSullivan believes that clients are currently more concerned about where they can keep their money safe, rather than what proportion is invested in equities or bonds, a view that is echoed by his peers.
How To Redecorate On A Budget (16)
3. Don't use everything at once As you collect new bits and pieces to spruce up your space, don't get rid of the old stuff. Put it away, and when, one day, the new items start to feel old, you can pull out the original stuff and throw it back into the mix.
Oklahoma Real Estate: Founded On Oil And Freedom (17)
The geography of the state is varied, with a combination of forests, mountain ranges and large urban centers of half a million strong. Oklahoma real estate can therefore fit any lifestyle: from a vacation retreat on one of the man-made lakes that proliferate through the state to a peanut farm or enormous cattle ranch on the plains.
Earn Extra Money By Doing Market Research (18)
Kids do not have that when they are motivated enough. Maybe this is what we need to follow from kids. But for those who still do not have the guts or are ashamed to ask for work, there is another way to earn money.
Better Understanding Of Adjustable Rate Mortgage Loans (19)
Mortgage lenders often try and steer borrowers into Adjustable Rate Mortgages when their fixed rate offerings are not competitive. To apply an index on a rate plus margin basis means that the interest rate will equal the underlying index plus a margin.
Mortgage Rates Experience Historic Drop (20)
The main difference between today's low rates and the rates we saw in 2003 and 2004 is that 5 years ago pretty much anyone with a pulse could get a loan.
Permalink to Picking The Best Wealth Advisor Is A Daunting Challenge