Optimizing Your Wealth Team: Identifying and Vetting New Advisors

As your family grows, the next generation comes of age, and your plans change, the team of advisors managing your business or your wealth may need to evolve to meet these needs. The professionals who guided you through the early years of building your business or helped you start saving a few dollars may not be the right partners to navigate the complex financial landscape of significant wealth today and in the future.

As you gain clarity on your current needs and reassess your team of advisors, it’s important to consider the role of each professional, whether your style is a good match for theirs, and whether they possess the expertise needed to provide tailored, prudent advice into your and your family’s future. Here are the key members of a wealth team, and how to evaluate their roles:

Legal Counsel

Your longtime business attorney may have been perfect for contract negotiations and business formation, but the legal needs of high-net-worth individuals and families are far more nuanced. The right counsel should demonstrate expertise in sophisticated estate planning strategies. They should also have the ability to provide guidance across different jurisdictions, and understand the intricate legal challenges of significant wealth management. If you are planning to change your residence, you may also need counsel in that new state.

Accountant

Accounting relationships often need a thorough reassessment as your wealth grows or if you sell your business. Many owners of large businesses discover that their existing accounting firms charge premium rates for personal income tax services or may lack significant depth in tax strategies for high-net-worth individuals. The ideal accounting partner will show a comprehensive understanding of complex trust structures and personalized tax planning tailored to your family’s needs.

Insurance Advisor

Your insurance portfolio must constantly evolve to protect your wealth. The insurance products that made sense for your business or your family a decade ago may now be insufficient, and your insurance advisor may not have the level of expertise you need for the future. Look for an advisor who speaks the language of advanced insurance vehicles like Private Placement Life Insurance (PPLI), understanding insurance not just as a protective measure but as a potential tax-sensitive investment strategy.

Investment Advisor

Choosing the right investment advisor is critical, but setting up a successful strategic partnership depends on how you envision your role in the management of your assets. Do you want an active role in investment decisions, or would you prefer to take a hands-off approach and give the keys to your advisor? Your ideal advisor will understand your precise risk tolerance, and whether you’re focused on wealth preservation or aggressive growth. If you have recently sold a business, the investment advisor you’ve been working with may have an expectation that they will manage the post-sale proceeds. While they may have been a perfect fit for the amount they managed before, are they equipped to manage this new portfolio? If you decide to divide the assets and hire multiple advisors, who will track the overall performance and make sure the advisors are strategically aligned?

Expanding Beyond Traditional Roles

Modern wealth management demands a holistic approach, and sometimes that means adding additional advisors to your team. Some of these newer roles include:

• Professional transition coach: Guides you through personal and professional changes.
• Family wealth consultant: Focuses on wealth education and next-generation engagement to ensure that your plans stay on track.
• Charitable advisor: Helps you execute philanthropic goals.
• Family office services: Can provide comprehensive support, including investment tracking, sophisticated bookkeeping, insurance management, and even concierge services.

Selecting the Right Advisors and Bringing the Team Together

When evaluating potential advisors, look beyond credentials and impressive presentations, and don’t necessarily follow the crowd. Some screening questions to consider:

• Is the advisor a good listener?
• How thoroughly did the advisor prepare before meeting with you?
• Does the advisor ask questions that prompt you to think?
• Is the advisor intent on proving how smart/good they are?
• Will you be their biggest client?
• Is their style a good match for yours?
• What are their retention/turnover rates?

The best way to get started on your search is to seek recommendations from peers you trust. Be sure to ask for client references from potential advisors so you can dig down into what it is really like working with these professionals. Attempt to learn from others’ mistakes.

Once you have the team assembled, think about whether you need a “quarterback” to create alignment and ensure accountability. You may want to play that role yourself, or delegate it to the right member of the team.

Family Involvement

Managing your family’s wealth should not be a solo endeavor. Good communication with your spouse or partner, as well as your children and other core family members, helps create buy-in on the plan and a unified approach to your financial strategy. Some people create an informal advisory board that can provide additional perspective and help them stay accountable to their goals and values as they navigate life’s twists and turns.

Ongoing Management

Evaluating your wealth team is an ongoing process, and building the right wealth team isn’t about finding professionals who are perfect according to some external metric. Instead, focus on finding strategic partners who can navigate the complexities of significant wealth with insight, flexibility, and a deep commitment to your specific financial goals and success.

Wondering if it’s time to make a change to your wealth advisory team? Contact Robert Romanoff or another member of LP’s Trusts & Estates group for more information.