Wealth Management – Key Issues and Considerations

Notice: We do not accept responsibility for accuracy of financial data on this site; including but not limited to net worth data from wealthygenius.com, banking statistics from valuepenguin.com.

Much of the financial services industry puts intense strategic focus on building a large aggregate book of business with high net worth clients. In effect, they look to apply the 80/20 Rule to their operations, trying to augment their bases of financial assets by attracting a few very large clients rather than many more small clients.

Many firms, however, continue to pursue a marketing strategy focused on high net worth clients despite management reporting results that show a higher average profit per dollar of client assets among much less wealthy clients, who tend to be cheaper to serve and who pay higher prices.

1. Private Clients

Private Clients, or High Net Worth clients, are the marketing and strategic focus of many financial services providers, a number of which specifically style themselves as wealth management firms or divisions. The question is, exactly what is a high net worth client, or private client? There is no ironclad definition, and the answer differs by firm, often widely.

2. Households

Proper householding is critical to identifying and properly serving high net worth clients. This is the art and science of finding related accounts and grouping them together for analytic, pricing and servicing purposes.

3. Net Worth

For most financial services firms, Net Worth is not the typical yardstick for determining the size and importance of a client or a client household. The reason is that Net Worth includes illiquid assets.

4. Financial Assets

Financial Assets, instead, are the usual measurement for sizing clients.

5. Private Banking

Private Banking

6. The Kovel Rule

Wealth management sometimes involves aggressive strategies for tax minimization, some of which may push the envelope of legality. The Kovel Rule deals with the degree of confidentiality that a client may expect in discussing sensitive matters of this sort.

7. Specialists

To assist financial advisors with wealth management issues, the services of various Specialists may be utilized.

8. High Net Worth Specialists

In fact, various financial services firms find the need for dedicated High Net Worth Specialists to be on staff.

9. Family Offices

Family Offices are premier providers of services to high net worth clients.

10. The Largest Family Offices

A recent study of the largest family offices.

11. Family Office Statistics

A survey of key statistics on the size and growth of the family office sector.

12. Statement Consolidators

With significant sums of money often distributed among a variety of financial services firms, the typical high net worth client may have a need for someone to pull together an overarching view of their investments. This is where Statement Consolidators fit into the wealth management picture.

13. Clients With Multiple Advisors

Clients with multiple advisors not only present statement consolidation issues (especially if these advisors are spread across multiple firms), but also significant service issues.

14. Financial Advisors and Charitable Giving

An important topic in wealth management is helping high net worth clients prioritize and manage charitable gifts and bequests. Indeed, establishing a charitable giving strategy is important for most such clients.

15. Investing in Art

Investing in art and managing an art collection is often a significant issue for wealth management clients.

16. Art Appraisals

To assist a wealthy client value a collection or a contemplated purchase, obtaining expert and objective appraisals is crucial.

17. Art Financing

For clients who invest in art, financing their purchases can be a major issue, and an important service to offer them.

18. Art Insurance

Once purchased, an art collection then typically must be insured, if it is of significant value.

19. Art Title Insurance

Indeed, the purchaser of valuable art that may have passed through many hands may be wise to buy insurance protection against the possibility that the seller may not have legal title to the work.

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