Wealth Advisory Services
Business management clients believe they’ve offloaded their wealth management burden to their business managers.
Clients expect that proper advisor diligence, estate planning, and wealth advisory knowledge is already part of the fee they pay their business manager.
Problem: Business Managers Are Not Equipped
- Business managers do not provide due diligence on investment advisors (most have never reviewed a ADV).
- Performance calculations and analytics are not tools of the trade for business managers.
- Fees are anything but uniform and do not reflect the value received.
- Complex estate planning is outside the spectrum of knowledge for most business managers.
- Investment advisors only want the large clients.
The Value of Investments vs. Planning
Advisor A is a skilled investor; she adds 1% per year in investment alpha to the portfolio, delivering an 8% annualized return (as compared to the market’s 7% return). Over the client’s lifetime of 40 years, the original $10 million will grow to $217 million. Estate taxes, however, take almost $82 million from that number. In total, the next generation inherits a little more than $134 million.
Now let’s look at Advisor B. While only an average investor using index funds, he is skilled in estate planning. By year 40, the portfolio Advisor B manages is worth $149 million. However, by using a generation-skipping transfer trust at inception, the advisor reduced the transfer tax on this $10M to $0. In the end, the client family of Advisor B is $15 million ahead.
With effective discounts at inception the difference is closer to $80M, increasing exponentially over time as a result of the generation skipping exemption.
Outsource to a Trusted Partner
Outsource to AdvicePeriod
- Annual contract, starting at $500,000
- Full services across the entire spectrum of your clients
- Fees savings with current advisors should cover much of the fee, 100% of which should be allocated to clients
- Customized reporting at firm level
Even more benefits
- Reduce client fees
- Improved resources for estate and tax planning and investment oversight
- Allocate cost to clients; no business manager costs
- On-demand access to qualified resources
- Improved transparency
- Risk reduction