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The Role Of A Financial Advisor Within Your Family

There comes a point in the life of an ultra-high net worth family, as it grows in wealth and sophistication when it realizes it needs professional help in dealing with the wide range of concerns it faces—investments, insurance, real estate, and tax and legal issues, to name a few.

Over the years, you no doubt have obtained counsel in each of those areas and have been working with a number of advisors. This network of professionals provides expertise on highly specific needs, helping your family identify risks to its wealth and reasonable opportunities for growth.

Ultra-high net worth families often have several advisors, each managing some piece of the pie. It can be inconvenient to gather everyone together, and yet it is a critical step. After years of working with the same advisors and doing the same things, neither you nor they may be fully aware of changes to better bulletproof your financial well being.

It might be important to seek the perspective of someone who can look at your whole picture. That’s how you discover weak spots and duplication of efforts, and that is how you identify ways to improve your scenario. By identifying the weaknesses, you can take action to fill the voids and improve your situation.

You often hear about dividend strategies and families who are living off the dividends or interest generated from investments. However, even blue-chip stocks can suffer big losses. We have also read about investors pursuing a global income strategy that includes lower-rated bonds and currency exchange risk.

This additional risk-taking may not be necessary in our opinion. Ultra-high net worth investors do not necessarily just live off the income from dividends and interest. There may be other strategies to sustain the lifestyle you desire for generations while maintaining principal and attaining sufficient growth to overcome inflation and pursue family and individual goals. The strategies that are implemented should not place undue risk on your principal.

To make sure that each of your advisors knows what the others are doing, however, you will want to hire a go-to advisor to coordinate them. This is one of those situations where your family might put together a committee to decide who that go-to advisor will be.

The same advisors often bridge generations within the same family. They can provide a sense of continuity through the years. Later generations inherit the professionals who come along with the estate. Whether the family stops using any of those advisors and turns to someone else should be decided with great care.

By their nature, the biggest Wall Street firms and banks have a hard time delivering the customized level of services that ultrahigh net worth clients deserve. They are traditionally product manufacturers; therefore, their advisors have a difficult time offering unconflicted, holistic advice.

Large firms may have staff specialists for estate planning, banking, credit, and so on, but they may be overworked and of marginal caliber—making this less than ideal for ultra-high net worth investors. As a high net worth investor, you should demand a consultative advisor who is client centric, offering the best team of specialists your money can buy with minimum conflicts of interest.

Experienced go-to advisors are proactive and offer thoughtful solutions. They are knowledgeable and experienced, and above all, they know how to reach out to experts such as trust administrators, attorneys, CPAs, M&As, and real estate professionals. They are usually single-minded in helping you find the best solution for your family’s long-term needs. While the best advisors will have detailed knowledge and experience with investment vehicles, economics, asset allocation, performance analysis, and investment policies, they are also able to have an intelligent discussion with ultra-high net worth clients about all of the areas below:

  • family governance
  • family education
  • conflict resolution
  • family values
  • succession planning
  • exit planning from a privately owned business
  • philanthropy
  • trustee selection
  • arranging family meetings
  • tax strategies
  • estate planning