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How Do You Start Advising Clients in Your New Job?

If you are a new wealth advisor or just got onboard a new firm, how should you start advising clients?

A good start means you have your journey set on a good path.  A wrong start means you may have to deal with re-planning, managing mis-matched expectations, clients may switch to other institutions or wealth managers, or you will fall short of your performance targets.

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So when you get into your new job, how could you kickstart your new job with better advice for clients?

 

No. 1 For New Advisors

Management Associates
Management Associates

For new advisors, the journey begins with getting new clients and learning about wealth management and financial solutions.  New advisors will have difficulty providing complex financial solutions, so it is always easier to start with simple products, and products that most clients will possibly need, regardless of circumstances.

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How do you start:

Products or Solutions Financial Needs Purpose
Health Insurance Illness, Hospitalisation Bills To Cover Large Medical Expenses
Life Insurance Death, Permanent Disability, Critical Illness, Savings Savings, Loss of Future Earnings for Left-behind Family Members
Unit Trust Savings, Investments To grow savings and invest for higher returns than inflation

 

As the turnover rate for new advisors is high, there isn’t a need to build a long-term or 10 years plan for clients, which will change the moment you leave or when you discover new insights on how to manage wealth for clients.

Example: After building a quality financial plan and portfolio

  • Client went to another advisory firm and park another sum there, using a different advisory methodology.
  • Client went to an online brokerage and invested into some stocks that is discussed among friends and online blogs.
  • Client thinks that a financial plan had been laid well and starts to plan to buy a luxury home and car in the next 5 years.
  • Client thinks that you might not be around in the next 3 years, and start to question your advisory integrity.

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No. 2 For Experienced Advisors

Relationship Managers
Relationship Managers

For experienced advisors, you probably wouldn’t be looking for clients with small assets.  This means your clients would need to have sustainable sum of money for you to manage, which is then worthwhile for you to provide valuable wealth management advice to them.

How do you start:

Products & Solutions Financial Needs Purpose
Portfolio Management Professional Investment Advice Asset Allocation, Economic & Investment Trends & Forecasts
Customised Investments Advanced Investment Solutions Unique Investment Opportunities, Complex Investment Solutions, Risk Management, Hedging & Leveraging
Tax & Estate Planning Tax & Legal Complications Reduce Tax & Legal complexities and unnecessary expenses

 

With the increased assets to advice, this opens up a wider range of products and services.  This means advisors would need to have advanced wealth management knowledge to be able to match the products to the clients diverse and changing needs.

Example: A client may have $300,000 today in cash & portfolio.

  • A sudden decision is made to invest in a $1 Million property in Australia.
  • A planned education funds of $100,000 for a child to study in a university ballooned to $400,000 when application into a top fashion design university is approved
  • Client wants to invest into Vietnam, Myanmar or bet on a default of US Treasuries

Clients with larger asset size have more financial opportunities in life, but are also exposed to more risks and complications.

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No. 3 High Net-worth Wealth Managers

Global Head of Investments
Global Head of Investments

High Net-worth Wealth Managers not only have to be skilled in Wealth Management solutions, but also able to build relationships and earn the trust of people who are wealthy, and could be influential and successful.

As this group of clients have far more wealth than many others, they are also weary of trusting others easily to manage their assets.

How do you start:

Products & Solutions Financial Needs Purpose
Portfolio Management Professional Investment Advice Asset Allocation, Economic & Investment Trends & Forecasts
Customised Solutions Advanced Investment Solutions Unique Investment Opportunities, Complex Investment Solutions, Risk Management, Hedging & Leveraging
Asset Management Company Formation, International Asset Structuring For Oversight, Efficiency and Transition
Tax & Estate Planning Tax & Legal Complications Reduce Tax & Legal complexities and unnecessary expenses
Credit & Leverage Facilities Cashflow Improve Capital Management & Efficiency, Unlocking Value, Access Capital for Other Opportunities

 

It is not easy to explain a wealth management solution to high net-worth clients, especially when their life experience is more diverse.

For example, a portfolio solution for them could comprise of Unit Trust, Stocks, Bonds, Exchange Traded Funds, Structured Products, Options, Futures, Hedge Funds, Private Equity or a combination.  To get clients to really understand a portfolio means clients might have to learn about every single product, or should they not?  Some clients prefer to be in control while others prefer not to be bothered about it.

While putting together solutions for High Net Worth clients is more complex, the larger assets managed and the fees quantify the time spent.

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No. 4 Ultra High Net-worth Wealth Managers

Private Banking
Private Banking

Similar to High Net-worth Wealth Managers, the solutions to Ultra High Net-worth clients are complex.  Clients typically have assets of $30 million or more, with some running to a few hundred millions to billions of dollars.

Their clients have large assets, sometimes illiquid with complex international structures in real estate, businesses, private companies, private collections and more.

How do you start:

Products & Solutions Financial Needs Purpose
Portfolio Management Professional Investment Advice Asset Allocation, Economic & Investment Trends & Forecasts
Customised Solutions Advanced Investment Solutions Unique Investment Opportunities, Complex Investment Solutions, Risk Management, Hedging & Leveraging
Asset Management, Family Office Company Formation, International Asset Structuring For Oversight, Efficiency and Transition
Tax & Estate Planning Tax & Legal Complications Reduce Tax & Legal complexities and unnecessary expenses
Credit & Leverage Facilities Cashflow Improve Capital Management & Efficiency, Unlocking Value, Access Capital for Other Opportunities
Trust, Estate & Foundation Sustainability, Philanthropy, Aspirations, Family Planning Improve Capital Management & Efficiency, Unlocking Value, Access Capital for Other Opportunities

 

Some Ultra High Net-worth clients know about managing wealth much more than Wealth Managers.

For example, clients could be owning banks, brokerages, real estates or diversified businesses.  This means the knowledge of the wealth manager is likely inadequate to be able to advice the clients better.

But clients would not be able to spend time to execute the transaction, thus, the high net-worth wealth manager is really important – to be able to build a relationship, earn the trust, and able to listen to clients and execute the transactions.  Occasionally, the wealth manager might have to advice the client, tactfully.

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On the other hand, there are also plenty of clients who are incapable of managing their wealth too.  Example like sports stars, celebrities, scientists, inventors, who often spent their life pursing their passion, and have little time to deal with finance and personal assets.

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