Celebrity, charity, diversity: Insights from a ‘financial architect’

Rick Nott’s godfather would gift stocks for birthdays and Christmas and his stories about listed companies enthralled the young man who would focus his career on working with wealth.

Earlier this year, Nott moved from LourdMurray after seven years to the $1.7 billion Angeles Wealth Management where he is managing director of its Santa Monica office and a self-styled ‘financial architect’.

“By employing diligent and flexible strategic financial modeling, we can help guide investors through financial shocks and ensure financial resilience in any circumstance,” Nott said. “While I am a CFA charterholder, I will always be a planner first because I believe that is what really moves the needle.”

As one of only 2% of Black or African American CFPs, his story is atypical, and he has been sharing his insights of helping ultra-high-net-worth individuals and families look after their fortunes with InvestmentNews.  

So apart from the influence of his godfather’s love of equities, and given the lack of role models in the industry – and his own family circle (they mostly worked in non-profits), what inspired Nott to become an advisor?

“My school friends came from very successful families (attorneys, doctors and entrepreneurs), so I became intrigued by their relative circumstances and the unique way that assets, family values and culture were passed down,” he said. “It was very different from my situation, as money was not something that was openly discussed in our home.”

Nott did an economics degree and learned a lot about how the financial world worked, but there was stark lesson ahead as he entered the labor market in the middle of the Global Financial Crisis in 2008.

“That was when I learned how economics worked in the real world,” he said. “Fortunately, my unique technology and finance skill set opened some doors, and I was eventually responsible for trade execution for advisors across the country in my role at United Capital Financial Advisors.”

It was during this time that he became interested in behavioral economics and how those investors who create a strategy for their money have better outcomes than those who focus solely on markets.

“A strategy designed in advance will incorporate investments, tax and legacy planning into a unified financial model,” he explained. “It doesn't make downturns any easier, but when you have a gameplan for the tough times, you tend to make less panicked decisions that you'll later regret. This is what ultimately got me hooked on the wealth management business.”

HIGH-PROFILE CLIENTS

Nott’s career has introduced him to UHNW clients from entertainment and sports, but what unique challenges do wealthy people with high profiles have, especially when this can often mean suddenly coming into big money?

“Most people aren’t aware of the true cost of their lifestyle today, or what it might cost them in future in terms of lost opportunity. Having a high profile doesn't ensure that you will do better financially, it just means that the same mistakes that people make every day may have a few extra zeros- which could land them in the news, as we’ve all seen,” he said. “The attention that comes with being a high-profile athlete or entertainer doesn't make life any easier. It comes with a great deal of public and private expectations and a constant barrage of "financial opportunities".

CHANGING PRIORITIES

Nott says he is noticing some changes in the wealth landscape for UNHW clients.

Firstly, a reduction in publicly listed companies with many choosing to stay private for longer. Although private market opportunities are growing, it is often only large institutions that can seize them. He and the team at Angeles Wealth Management believe wealthy individuals should have the same access as institutional investors.

Secondly, charity is a key trend in the space.

“I can't recall a time where so many wealthy individuals have decided that philanthropy should be a major part of their planning and legacy,” Nott said. “Charitable giving, through the use of Donor Advised Funds or foundations, are one of the few ways that families can effectively pass on values from one generation to the next. I recently read that the charitable arms of Fidelity and Schwab both reported record grants in 2023 at over $16B combined! Even better, we've been having many more conversations with UHNW clients about how they can involve the next generation and pass on a legacy of values.”

He has also seen a growing desire for wealthy families to engage with the next generation. With the Great Wealth Transfer underway, he says the next generation of wealth creators and inheritors are more educated and more demanding of truly holistic financial advice than prior generations.

This means advisors need to be moving towards a more holistic advisory approach, and Nott says he believes doing this in his own practice means he is giving the most comprehensive advice of his career. That holistic approach should include the client’s family.

“If it's only money that is transferred, you're doing your heirs a disservice. We help encourage the wealthy in creating a family mission statement and facilitating regular family meetings, all with the purpose of addressing this very problem,” he said.

IMPROVING DIVERSITY

While he did not say so in this interview, Nott is undoubtedly a role model for advisors, and for those from minority backgrounds who may not think the wealth management industry is for them.

He says that perception is a key problem in driving greater diversity, with wealth advisory firms and advisors catering to their perceived view of the wealthy, and job seekers tending to have a specific view of what the wealth management world looks like.

“The good news is that the demographics of wealth have been expanding for years, which in turn expands the target market of our industry,” he said. “People want an experienced attorney that will fight for them or a skilled physician that will listen to their health concerns and needs. In a similar manner, a good wealth advisor understands you and cares about your financial well-being and the success of your legacy. The industry seems to be putting an increased emphasis on trustworthiness and competence, and less on alma mater or family history.”

Nott is also keen to see some other engrained elements of the wealth management industry change for the better.

“We still live in a world of medallion signature guarantees, physical paperwork, and high-fee and commission investment products, but there is a better way,” he shared. “As an advisor, I do what I love by helping families and individuals make better financial decisions and achieve better outcomes and want to continue doing so. My ultimate career goal is to change the way our industry serves clients by providing other advisors with the tools and guidance to deliver better, more compressive financial advice by leveraging technology and adopting an approach that focuses on what matters: client experience and outcomes.”