Differences Revealed: How Large National Brokerage Firms’ Consultation Processes Compare to Independent Wealth Management
Ultra high net worth families want to know – is it really that different to work with an independent wealth management company compared to the large brokerage firms like Fidelity, Vanguard, and Schwab?
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
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What are their processes like? What happens when you call them up? Who do you speak to and does this person have answers for your questions? How long do you have to wait?
It’s easy to think that any reputable wealth management or brokerage company probably does a decent job. But when it comes to the ultra high stakes of ultra high net worth, ‘decent’ isn’t good enough.
We’re going to show you the differences between these top 3 brokerage firms’ initial consultation processes, and compare them to independent wealth management from a multi-family office.
But if you want even more ‘meat on the bones’, get the ultimate guide – 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning. There, you’ll get an in-depth look at what large brokerage firms simply can’t deliver when they attempt to serve the unique and complex needs of ultra high net worth families like yours.
How We Created This Article
It’s not enough to just scan the websites of big firms like Schwab, Vanguard, and Fidelity. If you really want to know how their service to ultra high net worth families works, you have to experience it.
But that takes time.
You’d have to be willing to go through the consultation process with multiple firms before you could get to a point where you felt informed and aware enough to make a sound decision about which company to go with.
That could take months.
In fact, it does take months. We know because we did it, so you don’t have to. Pillar Wealth Management performed a ‘mystery shopping’ investigation of the high net worth branches of these three large brokerage firms. We spent months calling and emailing with financial advisors and high net worth specialists at all three firms, presenting them with a fictional but very reasonable ultra high net worth scenario, and experiencing their processes and service.
This article and several others are the result.
So, you have three choices in what to do next:
• Sit around and keep anguishing over which direction to take with your wealth
• Investigate your various options on your own and spend a lot of time doing so
• Read this and the other articles related to our own investigation
Option 3 is the fastest and the most informative. By far. For this article, we want to examine the initial consultation processes from the high net worth divisions of Vanguard, Schwab, and Fidelity.
What happens when you call? Who do you speak with? What is their customer service like? How do they work with you?
Fidelity’s Consultation Process
We began by calling the phone number on Fidelity’s Wealth Management web page, which states that clients of their Wealth Services must invest a minimum of $2 million with Fidelity, and have $10 million in investable assets. That phone number did not take us to a person, but to an automated voice entry service that requires you to say what you want to a robot.
Slow out of the Gate
After doing so, we were told that “all our reps are busy,” and we waited on hold for 17 minutes. Again – this is the wealth management phone number, not the main service line.
After connecting with a person, we were asked for our approximate location. They would submit our information to a local branch, and one of their financial advisors would call back.
About 20 minutes later, an advisor from a local branch did call back, and began explaining his process, which involves three steps – get to know me, clarify my current situation, and create a plan and run it through a stress test.
Next, they sent me a planning document via email which touches on a variety of financial and wealth related topics. They also wanted us to open an account so they could have a clear picture of our situation.
This was irksome, because right now we were just looking for information and comparing companies – which we told them. But they not only insisted on an account, but said we would have to give our social security number. Granted, we didn’t have to fund the account, but opening an account requires revealing a lot of personal information.
We delayed on that and scheduled another call to learn more first.
Still Not Speaking with a Wealth Manager
On that next call, we had a much longer conversation of about 50 minutes, and got into Fidelity’s various services and options. Like Vanguard and Schwab, Fidelity offers a self-directed investment service as well as the use of a financial advisor.
But it was during this call that we realized we weren’t actually speaking with a wealth manager. This person was just a typical advisor, someone who works with all sorts of people, not just those with ultra high net worth.
This was evident because, after sharing a very complex situation, he continued to focus on things like paying off debt, retirement savings, and other financial topics common to most people. But he did not speak to our unique situation, and didn’t seem to possess specialized knowledge around topics relevant to us.
He also revealed that he doesn’t manage our assets, even if we signed on with him. The money would be managed by the Strategic Advisors team back in Boston, and these people are professionals who don’t generally talk to individual investors. We would talk to them through our advisor, if we had questions.
At one point, he commented that clients who try to manage wealth on their own end up getting stuck with large tax bills. This was a good comment, and speaks to the need for a financial advisor. But the problem is – this advisor also doesn’t specialize in tax minimization or tax advice, something especially critical for those with ultra high net worth.
Proposal not Easily Forthcoming
We scheduled a third call, but he still insisted on needing a social security number and an open account before he could give us a proposal. And even then, the proposals were going to be different depending on the type of account we opened, such as for a regular IRA, inherited IRAs, after-tax accounts, etc.
Finally, after he asked for permission from someone else for a way around this, we were able to open a guest account without using a social security number.
At this point, he walked us through the nitty gritty details of their online planning tools. While this was helpful and informative if we were just a typical investor wanting to learn how to work with equities and bonds and other investment options online, it did not relate at all to the unique ultra high net worth challenges we had brought to the table at the outset.
We were down the wrong rabbit trail.
So, after three calls, we still hadn’t addressed any of our most pressing issues.
Talking to the Right Person
Finally, a few weeks later, we got an unprompted call from a different advisor, a wealth management specialist.
This is the person we should have been talking to from the outset. He spoke our language. He addressed our specific situation. He had solutions and proposals for our challenges. He knew all the tax brackets, including the percentages and the income cutoffs, and applied those to our personal situation.
He also explained some of his own story, his employment history, how he gets paid, and why he works at Fidelity. He told us he’d be working with us for a long time – we wouldn’t be handed off to someone else. He talked with us as an ally and a friend, not just as a customer. This guy was good – helpful, conversational, trustworthy, and patient. But it took well over a month to reach him!
In the two long calls with him, he gave us the option of working with him, which – if we wanted – could include farming out the management of our wealth to other Registered Investment Advisors (RIA) familiar to Fidelity.
He also commented that a multi-family office wealth management firm might be a good fit for us because that kind of firm employs all the specialists we would need in one place, such as tax accountants, estate planning specialists, and insurance experts. Coincidentally, Pillar Wealth Management is such a place. That’s what we do, and it is not what Fidelity does.
In the final call, he detailed his customized proposal to us. See more about the proposals we received from all 3 firms. This was a very rich and personalized conversation, and one we thought highly of.
It was also more than two months after our initial contact with the company.
Schwab Consultation Process
Like Fidelity, we began on Schwab’s Private Client page, their version of wealth management, which has a $1 million minimum. It also includes an impressive satisfaction guarantee, which says that if there’s a service problem, they will refund the previous quarter’s fee and make it right.
Getting Started Is Slow Again
After calling the wealth management number, they determined our location and like Fidelity, routed us to a local branch. But this time, we were transferred directly to the local financial advisor. However, he wasn’t there, so we left a message.
The person we left a message with called us back and we did some phone tag, but we didn’t actually get them on the phone until nearly a month had passed.
Connecting to the Right Person
In that call, they sent us a worksheet to fill out, much like Fidelity had done. However, unlike Fidelity, this person quickly determined that we were a good client for Schwab’s wealth management service, and said they would pass our information on to one of their specialists.
That person contacted us not long afterward, and we had our first call with her six days later.
In our first call, she spoke very well and did a good job of asking questions and building an understanding. She also did a fair amount of explaining, but moved slowly and handled the situation with tact and sensitivity. She was polite, and not pushy. The wealth management specialists at all three firms were quite good at this skill. But Schwab in particular made us feel like they were trustworthy, that they wanted to help, and that they would adapt to our preferences and needs.
She walked us through their three investment management options. They offer a fully managed service and a self-directed service, as well as one that’s more collaborative, where you and their advisors work together to some degree.
She spoke at length to one of the priorities of wealth management – where your money should go. And she made clear it should go to family and charity and other places you want, and not to taxes, except when unavoidable.
As for other priorities, like Fidelity, Schwab does not retain in-house specialists for tax accounting, estate planning, insurance, or things of that nature, but they have a network of people they can refer you to.
Meeting in Person
Schwab was also the only one of the three firms whose wealth manager was local. Fidelity started us off local, but that first advisor was not the ultra high net worth specialist.
Schwab puts a heavy emphasis on meeting in person, but also offered to do video conferences. Once they had our information from the survey, they were able to send us an initial proposal of how they would invest our assets. However, they too wanted us to open an account, and without an account, they will not email you the proposal. They only send it by physical mail.
That was fine with us. The proposal was fairly generic in that it did not address some of our more challenging circumstances, but it gave a good place to start. They called it a “baseline,” because greater customization would come later.
Farming You Out to Wealth Management Specialists
Next, she made clear that our situation warranted the help of a wealth management specialist, and she was recommending that we interview with three different Registered Investment Advisors in the Schwab Advisory Network. So, she would not actually be our wealth manager, but would be a point person, helping us find the best one for us, and then working with them and us on an ongoing basis.
It took a while for us to grasp that she would not actually be our wealth manager – and that her own recommendation was for a specialist from their external network to give us the level of service warranted by our situation.
Those specialists were also going to be local, and could be met in person.
Schwab made it clear they use a client-centric service approach, which means they don’t dictate to clients what they should or shouldn’t do. They are consultants “in the true sense of the word.”
In our final call after receiving our survey, she did a good job of summarizing our responses, and thanked us again for the chance to work with us. And we had another long conversation touching on variety of relevant topics, and discussing the various steps to moving forward.
Vanguard Consultation Process
Vanguard’s wealth management service is called Flagship Select, and it requires a $5 million minimum investment. As with the others, we began by calling the number on the webpage that relates to this service.
A Faster Start
There were some strange noises and at first it didn’t feel as if our call was going through at all. But then the hold music came on, and a few minutes later a person answered.
Unlike Fidelity and Schwab, it appears the phone number on the Flagship Select page does actually get routed to someone who expects to receive calls from people with high net worth. We were told that we called the “right department,” and this person immediately began discussing our situation to see if we were a good candidate for their wealth management service.
He walked us through their fee structure and talked about the three investment options they offer – self-directed, comprehensive advice from Vanguard advisors, or the use of a digital advisor, most commonly referred to as a robo-advisor. Each service comes with its own set of fees.
We were also told that, based on our situation, we were guaranteed to work with an advisor who only works with people who have over $5 million.
We then spent about ten minutes setting up an online profile so an advisor could call us. This profile was not an account, and did not require much personal information. Whereas Fidelity and Schwab both wanted us to open an account in order to move forward, Vanguard allows this less commitment-heavy step when you’re just getting started.
Vetting You for Wealth Management Service
We scheduled the next appointment, and talked with the next person three days later.
This second call took about 40 minutes, and the purpose was for this person to vet our situation and see if we were the right fit for their wealth management service. He spent a good amount of time explaining what makes Vanguard unique, such as that they have no stockholders.
He also discussed how their advisors get paid, why their fees are so low, and various other differentiators. Part of his purpose here was not just to see if we were a good fit for them, but if they were a good fit for us. Toward the end of the call, he directly asked if we wanted to continue with the process and speak to a wealth manager.
He also revealed that, like the other companies, Vanguard doesn’t have a service for estate planning or tax accounting. But unlike Fidelity and Schwab, Vanguard does not have a list of recommended specialists in these other areas they can refer you to. You have to go find them on your own. Vanguard will not help you with this task.
Offering an Investment Proposal
He then offered to send us a proposal for what would happen with our investments. This was the only company that offered a proposal without having to be asked.
All in all, the process up to this point was the simplest and most efficient of the three companies, and required the least amount of commitment from us. But, it also revealed that Vanguard leaves more tasks to you, and doesn’t appear to help as much with the more specialized aspects of wealth management.
Dropping the Ball
And here’s when the process broke down.
After a very efficient start, over a month went by without us hearing from anyone. No calls, and only generic emails. Somehow, we got lost in their system and never heard from the high net worth advisors for a long time.
Eventually, we did finally get connected with one of their wealth managers, and had two long calls with him.
Comparing Vanguard to Others
The wealth manager described the team of people who would work on our behalf, which includes a WEPS team – wealth and estate planning. So it appears at this point that Vanguard does help with these tasks to some degree. These are not attorneys though, but they can give more specialized advice in these areas than a typical financial advisor would.
Unlike the other two companies, this advisor also directly compared Vanguard to other brokerage firms, mentioning them by name and explaining how Vanguard is different from them.
He used a very pleasant question and answer approach, doing a lot more asking and listening than the wealth managers at Fidelity and Schwab. For instance, he asked how we reacted when the market crashed in 2020 due to the covid lockdowns. This advisor demonstrated a good understanding of how everything gets amplified when you have ultra high net worth. And he also shared some of his own story, why he works at Vanguard, and some details about his family.
Being a national company, it became clear that Vanguard doesn’t have upfront knowledge about local and state tax related issues. They have the least amount of local knowledge of the three. Schwab in particular demonstrated much more expertise in this area.
Getting More Specific
Our second call with this wealth manager took place after we received their investment proposal. You can learn more about the proposals from all 3 firms here.
This call focused on some of the challenges specific to our situation. It was a good discussion, with no pressure, and it started to get specific to some of the challenges we were facing. However, as with Schwab, this part of the process still felt at arm’s length. Only Fidelity got really detailed about some specific strategies we could pursue to resolve the problems we were bringing to the table – going so far as to make actual recommendations about them, as opposed to just discussing them broadly.
How Is Pillar Wealth Management Different from Fidelity, Schwab, and Vanguard?
In terms of process, you may have noticed that for all three brokerage companies, it took a couple months before we really got to the meat of the discussion, with the right person, and had enough information to start making informed decisions. With Schwab, in some ways we never reached that point, because their next step was to have us meet with local wealth management experts in their network – places more like Pillar Wealth Management.
Two months is far too long to have to wait for this process to gain some traction.
When you contact us by phone at 1-800-669-6780 or through our online scheduling option, you will not have to wait for days before talking to the right person. You will be on the phone with one of our founding wealth managers very quickly.
We will then speak with you about your situation, with the goal of developing a customized proposal as soon as possible that answers your questions and that serves as the basis for helping you decide what you want to do next.
We do not require you to open accounts, or start online profiles, or share personal information. And if you choose to work with us, we will not farm you out to other specialists, or expect you to go find estate attorneys and tax accountants. All this in included in our multi-family office wealth management service for one reasonable fee.
Want to learn more about how ultra high net worth wealth management from a multi-family office differs from typical wealth management as well as the service provided by large brokerage firms?
Then get a free copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios And Estates: Strategies for Families Worth $25 Million to $500 Million.
Or, click below to schedule a free introductory call with one of our founding wealth managers, Chris Snyder or Hutch Ashoo.
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