Unless your financial needs and wants are simple, straightforward, and minimal, there is no way one wealth manager—no matter how brilliant—can deliver truly superior results across a range of issues and concerns. To be able to optimize your financial life, you will likely need to depend on his or her elite wealth management team.
An elite wealth management team is composed of leading financial and legal professionals coordinated by your wealth manager who works cooperatively to provide the expertise that creates exceptional value for you.
According to Justin Breen, the driving force behind the exclusive BrEpic Network and co-author of Superior Results: Maximizing the Value of Your Family Office Just Like the Super-Rich, “While many wealth managers will talk about their team of experts, most times these are just professionals they will refer their clients to. Or they can be the professionals that are part of their wealth management firm. Often, these arrangements are usually far from the elite wealth management team that will deliver the best possible financial and related legal solutions most cost-effectively.”
At the same time, it’s rarely viable for you to put together an elite wealth management team and manage the process. For instance, you may not know the relevant specialists and not be able to effectively evaluate their technical proficiencies if you did indeed connect with them. You, therefore, have to depend on your wealth manager to have an elite wealth management team. But, blindly depending on your wealth manager to have a cohesive wealth management team can lead to you being shortchanged.
The super-rich which are families with a net worth = US $500 million or more, often depend on their single-family offices to establish and manage their elite wealth management teams. Even then, a large percentage of the super-rich will make the effort to understand the professionals involved including how they were chosen and how they will all work effectively together. This way, the super-rich are ensuring that their self-interests matter most and come first.
More and more of the less affluent are following the super-rich in this regard. They’re taking action to understand the network of specialists their wealth managers rely on. It’s a course of action that is appropriate to anyone irrespective of the level of wealth.
The following are some of the questions and the logic behind them that are regularly used by the super-rich. These are the same questions you can use when quirking your wealth manager about his or her network of experts…
What specialized knowledge and skills does each team member have?
Each team member needs to have a high level of niche specialization. You want to work with leading authorities in their respective fields. Their expertise clearly defines their roles. This question commonly leads to the next one.
Another question asked of wealth managers…
How did you determine each team member is extremely good in his or her area of expertise?
You want to know how your wealth manager concluded that a specialist is extraordinary and the right one for you to work with. It happens all too often that the supposed experts the wealth manager is relying on are not all that good. For instance, the expert might be employed by the wealth management firm and is not adept at efficaciously handling your concerns. Sometimes, these supposed experts are convenient working in the same building as your wealth manager.
Having your wealth manager articulate the reasoning he or she is bringing a specialist onto his or her wealth management team can be very useful. This is about explaining the specialist's credentials and stature within his or her field. For instance, the more the specialist is recognized as a thought leader by peers as well as competitors, the more likely he or she is indeed an expert.
A very important question to ask is…
How is each team member compensated?
It’s the responsibility of your wealth manager to deliver you the best results possible and to make sure the team members are appropriately compensated. At the same time, it makes a lot of sense that you know what using each team member might cost you as well as under what conditions they are charging for their expertise.
Another aspect of team member compensation is when they are compensated. For example, is the trusts and estates lawyer charging when he or she is giving a high-level overview of a client’s estate plan, or is this being done gratis as part of the wealth manager’s cohesive team.
Following the previous question, you can ask…
What financial or related business arrangements do you have with each team member?
This is an essential question that except for the super-rich is not often asked. The team members have a business relationship with the wealth manager. However, specifically what is the nature of that arrangement:
- Are certain team members sharing fees with your wealth manager? If so, what are the arrangements?
- Is your wealth manager being compensated for making introductions to certain team members? If so, how do these arrangements work?
- Do different teammates share revenues? If so what are these arrangements?
You also want to understand the nature of any indirect arrangements between your wealth manager and the team members. For instance, does your wealth manager expect to get referrals from team members for making referrals to them? The complication is that this type of arrangement can potentially result in you working with a subpar specialist. It might be beneficial to your wealth manager, but it can be detrimental to you.
Implications: Overall, what you’re looking for is for your wealth manager to be completely transparent in all respects. Included here is how his or her elite team is formed and managed. The only way you can be assured that you are getting the best professionals to assist you is to learn how they work on your behalf as well as how they benefit by aligning with your wealth manager.
There’s another benefit to learning all about your wealth manager’s elite team. With detailed answers to these types of questions, can negotiate with your wealthy manager to get the best arrangements possible—exceptional value at a decreased cost.
RUSS ALAN PRINCE is the Executive Director of Private Wealth magazine (pw-mag.com) and Chief Content Officer for High-Net-Worth Genius (hnwgenius.com). He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.