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How to get the attention of wealthy prospects
<p>Given today’s competing demands for attention, it’s never been harder to get in front of affluent prospects. But here’s is one statistic that will get you in front of wealthy investors: Research shows that for affluent families, 70% of wealth is lost by the end of the second generation, and 90% is gone by the end of the third.</p> <p>Focusing on hot buttons</p> <p>To engage with prospects, you have to focus on their hot buttons. While leaving a legacy for their heirs is not typically a priority for investors with $1 million or $2 million, the higher up the wealth curve you go, the more likely that the wellbeing of kids and grandkids is a priority. That’s why, when talking with a wealthy prospect, it is worth saying something like, “For my clients with substantial assets, quite often leaving a legacy for children and grandchildren is an important consideration. Tell me, where does this rank among your priorities?”</p> <p>If this is a high priority for them, you could add: “A recent article pointed to research showing that for wealthy families, 70% of assets are gone by the end of the second generation, and 90% are lost by the end of the third generation. I’d be happy to send you that article, but the good news is that there are some things you can do to reduce the chances of that happening.” You can link to that article from Money Magazine: Why Rich Families Lose Wealth by the Second Generation.)</p> <p>The causes of wealth loss</p> <p>The Money Magazine article was based on a report by U.S. Trust, Insights on Wealth and Worth. This report was based on over 600 investors with investable assets over $3 million. A third of the investors had assets of $3 to $ 5 million, a third had assets between $5 million and $10 million and the final third had assets of over $10 million.</p> <p>Here are some of the findings with regard to leaving a legacy:</p> <p> 63% said it was important to leave an inheritance;<br />  ,;<br /> just 36% had fully disclosed their wealth to their children; andfmD<br /> Only 27% had told children how much they were likely to inherit.</p> <p>The statistics on loss of wealth across generations comes from The Williams Group, founded by former San Francisco Giants tackle Roy Williams. In conjunction with an academic at the Miami of Ohio School of Business, they studied over 3,000 families to understand why only one third had lost their wealth and family harmony into the next generation. Their key finding: The primary reason for this loss was not due to poor investment performance, taxes or dilution of wealth across numerous heirs; it was the failure to preserve assets across generations due to heirs’ lack of preparation and a breakdown of trust and communication.</p> <p>More about this research can be found in the 2013 Wall Street Journal article Lost Inheritance. (If you are not a Wall Street Journal subscriber, search for “Wall Street Journal Lost Inheritance” to read the article.)</p> <p>How to help clients talk about their wealth</p> <p>This is far from the first article on the challenges that affluent families have in talking about money. The #1 Hot-Button Topic for Wealthy Families discussed research from UBS Wealth Management conducted with both wealthy investors contemplating leaving an inheritance and heirs who had received an inheritance. Here’s an excerpt from that article:</p> <p>Among heirs who have received an inheritance, 34% wish their parents had done something differently and 74% plan to do something differ</p>
Raymond James buys Deutsche unit
<p>After months of speculation, Raymond James has agreed to buy the U.S. Private Client Services arm of Deutsche Asset &amp; Wealth Management.</p> <p>The Florida-based Raymond James has been expanding nationally, and the deal will add 200 advisors to its staff, reports the Tampa Bay Business Journal. The Deutsche team specializes in high-net-worth clients and some institutional investors, mainly in large metropolitan areas. They will operate under the brand Alex. Brown, and will be led by Haig Ariyan, from Deutsche.</p> <p>About 400 support staff will also be offered positions at Raymond James.<br /> Photo: Mark Moz</p>
What wealth advice would you give to Kobe Bryant for his retirement years?
<p>Kobe Bryant has announced that he will retire from the NBA at the end of this season. Over the years, he's earned a tidy bundle. Forbes writes:<br /> Bryant’s $680 million in total earnings is the most ever by a team athlete during their playing career. The only athletes to earn more are in individual sports and include Tiger Woods, Michael Schumacher and Floyd Mayweather.<br /> On Twitter, a couple of  tweeters suggested that Bryant invest in TIPS, the inflation-protected Treasury securities -- a conservative approach. Another suggested that Bryant ask LeBron James, another NBA great.</p> <p>We would suggest that Bryant follow in LeBron's steps -- in terms of seeking advice. For his investment tips, LeBron turned to the Oracle of Omaha, Warren Buffett.  Tell us in the comments field what you would recommend and compare your ideas to what Buffett has to say in this CNBC interview:</p>
Video: NexGen likely to change wealth advisors -- and that's an opportunity
More and more wealth managers are finally coming to terms with the seismic shifts in their business, says April Rudin, CEO, The Rudin Group. Back in 2008, most didn't want to talk about NexGen or how technology and social media were changing their business models. Speaking at a Financial Research Associates conference, Rudin says: Embrace the change. It's an opportunity.
SEC ready to allege Credit Suisse private bank misled investors
<p>More scrutiny on the banks, this time on their wealth management arms. It will be particularly unwelcome because several have announced plans to make catering for rich individuals a key part of their growth strategies, as margins fall in other divisions.</p> <p>The US Securities and Exchange Commission is preparing to accuse Credit Suisse of misleading investors by improperly inflating its reports of assets under management in its private bank, people familiar with the case said, writes the Financial Times. (paywall)<br /> Essentially the watchdog plans to allege that starting in 2012 Credit Suisse at times improperly counted client assets in the Americas as net new assets for the Swiss private bank. Investors watch net new assets closely because they are seen as a measure of how the division is performing.<br /> In  October, Credit Suisse CEO Tidjane Thiam said the bank would emphasise wealth management and growing its Asia business while shrinking investment banking, echoing moves by UBS among others, reported Fortune.<br /> Photo: Credit Suisse</p>
Why team bonuses hurt performance
Editors note: This story is excerpted from Advisor Perspectives. Every advisor wants support staff to operate at peak efficiency. One way to do to that is to hire bright, capable team members with a strong work ethic and to provide financial incentives to encourage strong performance, allowing staff to earn bonuses and participate in practice profitability as a means of
Wells Fargo CEO sees wealth management as the 'biggest opportunity'
Wells Fargo Chief Executive Officer John Stumpf says wealth management is "a huge opportunity" for the bank going forward. "The biggest opportunity is in wealth investment management -- not that the business isn’t great. It could be a whole lot bigger," Stumpf said at the Goldman Sachs Investors Conference in New York. "We have about 11% of operational deposits," Stumpf said. "But
Video: No more 'one-size-fits-all' for wealth management marketers
Customization is the key to success in our diverse, global wealth management world, says April Rudin. Speaking at a Financial Research Associates conference, the wealth marketing expert advises clients to find multiple "entry points" for investors and to even forget millennials vs boomers. Focus on the individual.
You won't find older rich folks elbowing you in aisle 3 on Thanksgiving
<p>Thanksgiving weekend shopping is a sport for the young and the affluent -- but not the super wealthy.  Spectrem Group reports from a survey it took of  the high net worth crowd that nine out of ten would not be shopping on Thanksgiving at all. Certain segments just can't resist a bargain:<br /> Analysis by net worth and age finds less wealthy and younger Affluent respondents are most likely tear themselves away from the Thanksgiving table to hit the malls. Respondents with less than $100,000 are slightly more likely than their wealthier counterparts to take advantage of Thanksgiving store hours (17 percent vs. 6 percent of those with between $500,000-$1 million and $1 million-$5 million each, and 9 percent of Ultra High Net Worth households with at least $5 million net worth).</p> <p>Younger Affluent respondents, too, are more likely than older respondents to shop on Thanksgiving (roughly 20 percent of the under 40 crowd and those ages 41-50 compared with 10 percent of Baby Boomers ages 51-60 and 4 percent of those ages 61 and up).<br /> Photo: Andy Wilson</p>
EFG on the hunt for more relationship managers
<p>Despite predictions by fintechies that robo-advisors will eventually dominate the wealth management industry, there is still big demand for human advice.</p> <p>Swiss private bank EFG International plans to hire seven more relationship managers (RM) in Asia by the end of the year, Albert Chiu, EFF Asia CEO told Asian Private Banker. (paywall) The priority is to find people with strong, extensive networks among China's new rich.</p> <p>"We continue to see a very strong pipeline of senior RM candidates, and are confident to grow our numbers of senior bankers in the region," said Chiu, who has a year-end target of 115 RMs.</p> <p>That's great news for individual bankers and their own personal wealth. A shortage of talent is a common complaint in the industry, so well-connected RMs can play a rather lucrative game of musical chairs.<br /> Photo: Vincent Wong<br /> &nbsp;</p>