How to advise wealthy clients

Employment & Skills | How To
Adrian Wilson

Written by Adrian Wilson, head of Private Clients at accountancy firm BKL

A private client practice is often not about financial planning at all. Human relationships, availability and complete engagement with individual needs are central and expected by those whose interests the adviser serves.

The role requires constant adaptation and attention, perhaps more so than in the past, and is as much about emotional intelligence as financial skills. People rather than technical issues are at its core, particularly the different expectations of generations. These can cause turbulence that requires sensitivity to navigate, especially because people are living longer, fully engaged lives.

Neither are client expectations uniform. Ambitions for inherited land have arguably changed the least, although owners are usually acutely business-focused these days. But the primary aim remains broadly as it always has been: to hand on estates intact. Often, parsimony and caution are still the watchwords for money made many generations ago. I remember visiting a client in their home. In the cavernous dining room was a long and beautiful table of unimaginable value laid for lunch. On it stood no fancy artisan condiments, just one single item; a bottle of HP sauce. It somehow said a lot.

Particular challenges

Private client work brings particular challenges rather than generic ones. Clients want a complete absorption in their affairs – an anticipation of issues that is based on a deep understanding of what they want to achieve strategically and as individuals. These can require a mental flexibility, a quality crucial to being a trusted adviser. For example, we will put in systems designed to mentor heirs to a fortune, in effect creating a financial crèche – somewhere safe to learn and make mistakes. A generation ago many beneficiaries were left to ‘sink or swim’ with their inheritance. That is rare today.

It can cause particular anxiety to have a young child inherit a substantial sum from a family trust, which can arrive with no power of parental deferment. I regularly give tutorials to teenagers about basic budgeting, but also about understanding how their wealth may affect other people around them. It neatly illustrates the variety at the heart of my working life. In fact, I spend barely 20% of my time these days dealing with tax and accounting matters; instead I use that knowledge as a prism through which to offer judgement and common sense.

There needs to be empathy, above all a human connection; so the job is not for anyone who wants barriers between people and the work they do for them. In the world of private client, people are the work. It requires being tough when necessary, and imaginative always.

There are instances when a beneficiary is transformed adversely from a capable adult after inheriting their wealth. On those occasions it is important to take a lead, to offer often-despairing family and trustees a way forward. One option, for example, is to put in place a solution that matches from a trust fund money earned outside it. It can help to ensure that people continue to lead balanced lives if this is otherwise threatened.

The job routinely involves not just resolving such human crises, but helping fractious members of a family reach agreement. Wealth can be blown apart by disagreement, or lost because the skills of those who generated it are not passed on, or are unvalued by heirs. There is some truth to the saying ‘from togs to clogs in three generations’, so the job of trusted adviser requires more than a deep understanding of wealth management or tax planning. Time must be given to the strengths and weaknesses of personalities, their ambitions and values, because at its heart a private client practitioner is offering a made-to-measure service, not one that is off the shelf.

Flexibility

To earn trust, the adviser also needs the adapting qualities of a chameleon. Sometimes these qualities are even sartorial. I once found myself giving some complicated professional advice to a family at their home wearing a sombrero they kindly and unselfconsciously offered to shield me from an awkward sun during a trustees’ meeting held outdoors in the fine weather.

I wondered at the time how many other accountants were doing the same that hot day. If anyone was, they were probably in a private client practice, which is all about working with people and is certainly a place to expect the unexpected.

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