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William Byrnes (Texas A&M) tax & compliance articles

Wealth Manager Skills Sets Required To Service New-Breed HNWIs

Posted by William Byrnes on July 19, 2009


There is a correlation amongst a firm’s and professional’s economic success, the firm’s regulatory survival, a holistic education with international exposure, and collaborative service models.  Servicing modern HNWIs who now demand international elements and risk management for their families and their business interests requires a dynamic ability to obtain economic and regulatory information, understand the clients’ and the markets’ issues and inefficiencies, and create solutions. 

As noted in my previous blogticles, steady HNWI high growth continues within the OECD members, but rapid growth in HNWI numbers will continue in the BIC countries of Brazil, India and China, and probably again after the valuation adjustment in Russia/Eastern Europe.  The BIC countries, in particular Brazil because of its vast natural commodities base and recent discovery of what is probably the world’s largest offshore oil field, will continue to lead the world in both economic and HNWI growth.  Cap Gemini estimates that by 2011 Asia Pacific will overtake North America in HNWI growth, just as China overtook the UK last year in total number of HNWIs.  Thus, wealth managers seeking to attract these HNWIs, be in their home country, or in the USA, will evolve to provide services reflective of the needs of these BIC clients, as well as speak their local languages.

The HNWI is seeking the one-stop shop model.[1]  The relationship manager must be able to source information and services leveraging a team approach, assimilate the pieces, and communicate it in a collaborative, transparent manner with the HNWI .[2]  Wealth mangerss must be able to employ a holistic and collaborative team approach for a HNWI including (1) business, (2) tax, (3) estate, (4) legal, (5) accounting, (6) intra-family governance, (7) philanthropy (8) compliance and (9) lifestyle issues, and communicate operations and solutions to the HNWI and family members.[3]  New breed HNWIs want communication by email weekly from their wealth manager.  Sophisticated advisors will leverage secure, though inexpensive, video conferences to establish more efficient and effective face time.

By example of collaboration and communication skills, the trusted advisor may need to source compliance and due diligence skill sets from risk management, compliance, legal, and audit team members in order to analyze a multinational business that a HNWI is targeting, synthesize the different jurisdictional regulatory requirements, and communicate effectively the team’s findings to the client via a video conference. 

Thus, education in these aforementioned skill sets, leading to a potential employee’s retooling, is a key to competing in today’s wealth management industry and job market.  Moreover, ‘soft skills’ such as client communication, and even more relevant in this economic downturn, the ability to counsel through economic and personal stress, will decide for HNWIs who is to become trusted advisors, and who are simply hawking services.[4]  A polling by American Academy of Financial Management of its membership found that while communication soft-skills are recognized by wealth managers and by private clients themselves as critical to attracting HNWIs and in choosing their trusted advisors, less than 20% of wealth managers receive any formal soft skill communication education during their graduate education, which mainly focused business or finance (lawyers primarily responded that communication skills training had formed a part of their formal education).  MindFrame Persuasion www.mindframepersuasion.com/ is an example of advanced soft skill communication training to establish attraction and connection between trusted advisor and their prospective HNWIs.

In my next blogticle, I will address Winning Strategies of the Holistic Service Model.   Prof. William Byrnes (http://www.llmprogram.org)


[1] The Wealth Management Report 2009 Meeting the Expectation of UK High Net Worth Clients JP Morgan at 5.

[2] The Future of Private Banking: A Wealth of Opportunity?, Oliver Wyman (2008) at 43.

[3] In an interview with Dr. George Mentz, Chairman of the American Academy of Financial Management (www.aafm.us), who is consulted by the Department of Labor’s Bureau of Statistics for Financial Services employment information (http://www.bls.gov/oco/ocos259.htm), he stated that the US wealth management market has seen a commoditization of financial product offering to private clients, thus requiring advisors to distinguish themselves upon other services.  Asset protection, estate planning, business issues, Dr. Mentz said, are areas that advisors are now focusing on to attract clients.  The Chronicle of Philanthropy reported that 2008 charitable giving did not substantially suffer, and in some cases increased amongst certain groups (112% amongst the 50 most generous US philanthropists).

[4] See The Wealth Management Report 2009 Meeting the Expectation of UK High Net Worth Clients, JP Morgan at 11 and the section “Perspective” page 25.

One Response to “Wealth Manager Skills Sets Required To Service New-Breed HNWIs”

  1. […] } In my blogticle of July 19th I addressed Wealth Manager Skills Sets Required To Service New-Breed HNWIs.  Hereunder I turn to the successful strategies employed by wealth management firms to acquire and […]

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