What the wealthy really want from advisers

The rich are very different from you and me, Ernest Hemingway wrote in a short story. They have more money. One of the other ways that they are different is that they expect a higher level of personal service from their financial advisers than the typical client, and a sizable minority apparently feels that they aren't getting it, according to recent surveys. In another survey of rich investors that ranked wealth managers, the top-rated firm said that their score has a lot to do with services that they provide that go way beyond just managing wealth. These range from tax and legal issues to advice on the merits of various schools that their children might attend or helping them sort through the difficult decision of whether to rent or buy a personal jet. In a recent survey of 1,100 investor members and 140 adviser members of the Institute for Private Investors on their general satisfaction with the advice that they receive, 63% of investors described themselves as “fully satisfied” with their adviser relationships, and 17% said that they disapproved of their adviser's performance. In an apparent disconnect, 95% of the advisers in the group said that their firm's clients are fully satisfied. About three-quarters of investors said that their adviser is responsive to their requests, and 66% said that their adviser has a “deep understanding of the family's goals,” while just 63% said that their adviser spends sufficient time with them. And 68% of investors agreed that their adviser has open, transparent and fair fees. Twenty percent of the respondents have under $50 million in total assets, 44% have between $50 million and $200 million, and 36% have more than $200 million. The wealthy are spreading their money around. In the IPI survey, 69% of investors indicated that they rely on a primary advisor for overall advice. Although 50% said that they rely on one firm, 19% indicated that they use more than one firm in the role of primary adviser, a growing trend, according to IPI. In a separate survey of investors with a minimum net worth of $5 million, conducted this year by another wealth group, the Luxury Institute, investors were asked to grade wealth management firms with which they were familiar on four factors: quality, exclusivity, social status and self-enhancement. They were asked whether they thought each firm was worth a premium price, whether they would recommend the firm to others and which company they would be most likely to use in the future. The top-four-scoring firms overall were Atlantic Trust Private Wealth Management, Glenmede Trust, Rockefeller Wealth Management and Bernstein Global Wealth Management. Jack Markwalter, chairman and chief executive of fee-only Atlantic Trust, which has $17.5 billion in assets under management, said that a high level of service is one reason for its high score. The firm's boutique nature, its comprehensive services which include a variety of professionals and its strong investment performance all help it win client approval, he said. Being owned by Invesco Ltd., a global investment company, also helps, Mr. Markwalter said. “Some firms manage money, some do tax or estate planning, but very few firms tie it all together with the right philosophy of being a fiduciary,” he said in an interview. One of Atlantic Trust's special touches is an individualized family wealth planning manual that it prepares for each of its clients that summarizes its entire financial story, from family tree and total assets to the location of all the keys for the family's safety deposit boxes and the documents that can be found in each. Martin Swanson, vice president of the Luxury Institute, said that one trend he sees in the latest survey is that the respondents' preference seems to be tilting more toward large firms than it has in past years, when smaller wealth managers drew top marks.