In the substantial experience of Paulina Mejia, the newly appointed national fiduciary counsel at Fiduciary Trust International, ultra-high net worth clients are in one important sense not very different from the typical advisor's middle-class or mass affluent clients.
They have more money, to be sure, and this raises a host of added complexities with respect to estate planning, philanthropic giving and tax mitigation that typically won't concern less wealthy clients.
However, at the core of the UHNW client's goal-setting and financial planning process, Mejia says, are the same emotions and psychological motivations that drive essentially any person who seeks out the support of a financial professional.
"They want to know that their wealth is being protected and being put to good use, whatever that means to them," Mejia told ThinkAdvisor in a recent interview. "Especially when children and younger generations enter the picture, these clients want to make sure they are not just passing on wealth but also giving the right values and perspective about life. These are things we all have in common across the income spectrum."
Professionals focused on the UHNW space too often overlook these basics and instead get bogged down in the technical details. "There is a tendency in this space to just get really technical all the time and only talk about tax efficiency and sophisticated investment vehicles," Mejia says. "While the investments and wealth protection issues are crucial, they aren't the foundation of a great advisory relationship."
Rather, as is the case on the lower rungs of the wealth management ladder, the best outcomes for UHNW clients come from the creation of a deeper connection established between the advisor and the client — one that allows the client to more clearly understand and articulate their goals and desires for their wealth.
It is only by setting and regularly revisiting these goals that the more technical side of client service can be best executed, Mejia says.
Family Comes First
As Mejia emphasizes, as with any segment of the advisory market, no two UHNW families are exactly alike. Even when two clients look the same on paper, their lived experiences and expectations for the future can be completely different.
"Not everyone comes from a similar background, and not everyone with significant wealth has earned or inherited their wealth in the same way," Mejia explains.
Still, one "very unifying theme" in this space is that people love their children and care deeply about specific charitable causes, Mejia says.
"They want what is best for their children and grandchildren, but that can mean many different things within the UHNW space," she points out. "In so many cases, the most important part of this conversation isn't about wealth preservation, per se. It's about passing down values just as much as it is about passing down money."
Mejia says the UHNW advisor sits in a powerful mediator position to help facilitate frank but respectful conversations between the generations of a client's family. She says the industry (and its clients) are starting to embrace the importance of having these values-focused conversations earlier and more often — making them the starting point of the planning process, not the ending point.
"These conversations, for the advisor, are a bit of a balancing act, but they can be so beneficial," Mejia says. "As the advisor, you aren't trying to convince anyone about what is the right thing to do with their money. Instead, it's about helping the different generations find that common thread with respect to their values and beliefs about money."
