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Solve Your Top Clients’ Advanced Planning Needs 

How financial professionals can leverage a private wealth platform to generate significant new revenue for their firm.

September 20, 2007
by Lewis Schiff

*Adapted from an article that appeared in the June 2007 issue of Investment Advisor Magazine.

In last month’s column, we looked at how three financial professionals went outside of their practices to create an ad hoc network to solve the unique advanced planning concerns of their high-net-worth clients. Advanced planning requires a very different approach than traditional one-advisor-to-one-client interaction. Here you act as a project manager on behalf of your client, leveraging an entire team to solve complex challenges (such as funding an estate plan with a customized financial product) or accomplish unique goals (such as providing insurance for a high-risk client). Rather than simply passing off the client by providing a referral, the advisor or CPA acts as an overall project coordinator, addressing these nontraditional needs of their top clients by interfacing with a group of professionals who specialize in those needs.

To become their top clients’ “problem-solver,” these professionals created their own homegrown networks. For advisors or CPAs who choose not to build their own network of advanced planning specialists (perhaps they are focused on providing their primary service, or don’t have enough clients to justify the time and effort required to build a network from scratch) there’s an alternative approach. For cases that call for such complex solutions and require expertise in the needs of the high-net-worth, a private wealth specialist may be the solution.

NOTE TO READERS: Lewis Schiff will be holding workshops to introduce the newest solutions for your high-net-worth clients this fall in New York City and Chicago. To reserve your spot for these workshops, click here.

Acting as an advisor to financial professionals, a private wealth specialist works closely with the CPA and his or her high-net-worth and ultra-high-net-worth clientele on advanced investing, estate planning, taxation, insurance, and business-ownership issues, among others. The private wealth specialist already has a network of professionals who are top specialists in these and other more far-flung fields beyond typical planning issues, such as valuing period artwork, resolving intricate foreign taxation issues or creating private foundations.

The client remains the CPA’s. The private wealth specialist takes the role that the CPA, the client and he decide. He can simply support your efforts, but more often this specialist takes a lead position as facilitator to coordinate the work of all the experts on the team.

One HNW Service Model

“We position ourselves with this notion that if there’s anything that can possibly touch your financial life, we’ve got a resource or capability or a person to take care of it. That’s our philosophy,” says Erik Dahlquist of the Dahlquist Group at UBS in New York. “We need to build out a platform that enables us to never be in a situation where the client sensed they could outgrow us.”

Since he started at Dean Witter 12 years ago, Dahlquist has evolved his business model away from a classic transactional one and towards a more holistic planning solution. He also wanted a very consistent and systematic experience for his clients that would reveal their entire financial life and needs. To support this process, he built an eight-person group of advisors and support staff that concentrates on client service and data management. At the center of his team is an operating officer who allows Dahlquist to be more client-focused and thus more productive. As his business and client base grows, he wants to become more sophisticated about group and resource management. As part of this effort, Dahlquist uses a three-level system to match his clients’ concerns with the right kind of expertise:

  • Advisors in his group;
  • UBS resources and experts;
  • A private wealth specialist.

For his first level of clients, those with up to $10 million in AUM, Dahlquist finds that certain planning challenges come up consistently, so he’s invested in developing these competencies within his group, sometimes in conjunction with other USB resources. “If someone on the team isn’t capable or doesn’t have the knowledge, we know the resources within the firm and leverage those,” notes Dahlquist. For example, an executive in his 50s with a few million dollars tucked away in savings who’s thinking about retiring commonly needs asset and income management, and basic estate planning services, he observes, so Dahlquist would initially turn to UBS resources for help with these cases. “These clients tend to … need somebody who’s going to organize their financial life for them and who’s a trusted partner,” he says.

However, when the challenge a client brings him includes specialties that he can’t find in-house or within UBS, he works with an external private wealth specialist. His clients, which include corporate executives up to the chairperson and board member level, tend to have highly concentrated stock positions and more complex planning needs than other executives. They may have multiple real estate holdings, for example, or real estate in different countries, and taxation issues.

By bringing on board a private wealth specialist to augment his team’s efforts, Dalquist keeps the relationship in-house while still bringing a customized advanced planning solution to bear on behalf of his client.

Next month, we will discuss the role of the private wealth specialist in more detail, as well as how these various financial professionals form a team in an advanced planning scenario.

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Lewis Schiff is the principal of Advanced Planning Group. His forthcoming book, The Middle-Class Millionaire, will be published in January 2008.