Many ultra-high-net-worth individuals and families take great pains to surround themselves with top-tier registered investment advisors, certified public accountants, tax attorneys and other advisors that range from prominent art dealers to high-end insurance agents.
The result is that such families benefit from a tremendous amount of supporting brainpower and technical capabilities to help them protect and make the most of their substantial wealth. But they also face a dizzying diagram of overlapping expertise and shared responsibilities — which can lead to important financial tasks falling through the cracks.
In the experience of Ken Eyler, CEO of Aquilance, this state of affairs means UHNW families are more prone to making potentially costly financial mistakes than people might assume, given their overall level of economic success and prestige.
Given Aquilance's focus on providing technology that proactively connects and coordinates the work of UHNW families' various advisory resources, Eyler has significant visibility into this challenge. As such, he says that RIAs can deliver a substantial amount of added value to their UHNW clients by first helping them to see the scope of this coordination challenge and then helping them to solve it.
"Coordinated management is a significant missed opportunity for RIAs and tax advisors," Eyler recently told ThinkAdvisor.
According to Eyler, advisors who feel they cannot provide this level of service directly for their clients have the opportunity to collaborate with third-party technology providers (including Aquilance) to make this vision a reality — or they can invest the resources to do more of this work on their own.
While leveraging a third party will obviously incur an additional cost for advisors and their ultra-wealthy clients, Eyler says, the potential savings in terms of time and money are tremendous, as is the opportunity for greater peace of mind among clients.
Ultimately, Eyler argues, this type of support service, however it is delivered, can help make critical client relationships "that much more sticky," helping to ensure that advisors win and keep more clients in the coveted UHNW segment.
Coordination Challenge
As Eyler points out, American families at all wealth levels face challenges in coordinating their recurring and one-time bills. They also struggle to ensure they understand the potential implications of their investment decisions, where they are housing their financial assets, how much liquidity they should maintain, and how much they are spending and saving over the long term.
What is already a complex picture for middle-class and mass affluent families can become completely overwhelming for many UHNW families, who themselves can be split into what Eyler thinks about as several distinct groups.
Some very wealthy families have relatively straightforward balance sheets that resemble those of families lower on the income scale. They just happen to have a lot more wealth overall, which raises the stakes when it comes to avoiding issues and errors.
"Above that level stand those UHNW families with a little more complexity," Eyler explains. "Maybe they own one or two different successful small- or mid-sized businesses, and so they need an additional layer of visibility into their assets, cash flow and tax burdens."
