How To Evaluate Your Elite Wealth Management Team

Unless your financial needs and desires are simple, uncomplicated and minimal, there is no way that a single money manager – no matter how brilliant – can deliver truly outstanding results on a range of problems and concerns. In order to optimize your financial life, you probably need to rely on his or her world-class wealth management team.

A world-class wealth management team consists of leading financial and legal professionals coordinated by your Wealth Manager, who work collaboratively 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 Outstanding Results: Maximize the value of your family office like the super-rich, “While many wealth managers talk about their team of experts, more often than not these are just professionals that they refer their clients to. Or they can be the professionals who are part of their wealth management firm. Often these arrangements are a far cry from the elite wealth management team that delivers the best possible financial and related legal solutions at the most cost effective way.”

At the same time, it’s rarely practical for you to assemble a world-class wealth management team and manage the process. For example, you may not know the relevant specialists and be unable to effectively assess their technical capabilities once you have actually engaged with them. You must therefore rely on your wealth manager to have an elite wealth management team. However, blindly relying on your wealth manager to have a cohesive wealth management team can leave you short-changed.

The super-rich, i.e. families with net worth of $500 million or more, often rely on their single family offices to build and manage their world-class wealth management teams. Even then, a large percentage of the super-rich will make an effort to understand the professionals involved, including how they were selected and how they will all work together effectively. This is how the super-rich ensure 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 take steps to understand the network of professionals their money managers rely on. It is an approach that is suitable for everyone, regardless of wealth level.

Below are some of the questions and the logic behind them that are regularly asked by the super-rich. These are the same questions you might ask when interviewing your money manager about their network of experts…

What specific knowledge and skills does each team member have?

Each team member must have a high level of niche specialization. They want to work with leading authorities in their respective fields. Their expertise clearly defines their roles. This question often leads to the next.

Another question for wealth managers…

How did you find that each team member is extremely good in their area of ​​expertise?

You want to know how your wealth manager came to the conclusion that a specialist is exceptional and the right one for you. All too often, the supposed experts that the asset manager relies on aren’t all that good. For example, the professional may be employed by the wealth management firm and may not be able to deal with your concerns efficiently. Conveniently, sometimes these supposed experts work in the same building as your money manager.

It can be very useful if your wealth manager spells out the reasons why he or she is bringing a specialist into his or her wealth management team. The aim here is to explain the references and the reputation of the specialist in his field. For example, the more the specialist is recognized as a thought leader by peers and competitors, the more likely he or she is to actually be an expert.

A very important question is…

How is each team member compensated?

It is your Wealth Manager’s responsibility to provide you with the best possible results and to ensure team members are properly rewarded. At the same time, it makes a lot of sense to know how much each team member might cost you and under what conditions they require their expertise.

Another aspect of compensating team members is when they are compensated. For example, does the trustee and probate attorney charge fees when he or she provides a comprehensive overview of a client’s estate plan, or is this done free of charge 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?

That’s a key question that’s not often asked except for the super-rich. The team members have a business relationship with the asset manager. However, what is concretely the nature of this arrangement:

• Do certain team members share fees with your wealth manager? If yes, what are the regulations?
• Is your money manager compensated for introducing certain team members? If so, how do these regulations work?
• Are the earnings shared between different teammates? If yes, what are these precautions?

You also want to understand the nature of any indirect agreements between your wealth manager and team members. For example, does your money manager expect to get referrals from team members when they make referrals to him? The complication is that this type of agreement could potentially result in you working with an underperforming specialist. It can be beneficial for your wealth manager, but it can be detrimental to you.

Implications: Overall, you want your money manager to be completely transparent in every respect. Included here is how his or her elite team is formed and managed. You can only be sure that you have the best professionals to assist you when you learn how they work on your behalf and how they benefit from coordinating with your wealth manager.

There’s another benefit of learning all about your wealth manager’s elite team. With detailed answers to these types of questions, you can negotiate with your wealth manager to get the best possible deals – exceptional value at a lower cost.

RUSS ALAN PRINCE is Executive Director of Private Wealth Magazine (pw-mag.com) and Chief Content Officer for High-Net-Worth Genius (hnwgenius.com). He advises family offices, wealthy, fast-moving entrepreneurs and selected professionals.