Comprehensive wealth protection is in high demand by the ultra-affluent. They are looking for ways to ensure everything valuable to them is safe and secure. The demand for this expertise is motivating more wealth managers and other professionals, from accountants to attorneys, to deliver an integrated solution composed of asset protection planning and family security.
“Wealth protection is the coordinated combination of asset protection planning and family security,” said Evan Jehle, partner at FFO Business Management & Family Office. “We’re finding the wealthy are very interested in this integrated service. Those wealth managers and financial advisors who can deliver it can put themselves at a competitive advantage to their peers.”
Operationally, the wealth protection process is composed of six phases. However, the methodology should not be perceived as a strictly observed, incontrovertible process but rather as a broad conceptual model:
• Phase 1 – The At Risk Assessment: This is where the wealth manager evaluates the basic protection concerns and needs of the wealthy. A proven approach to gathering the relevant information is an assessment approach referred to as the Whole Client Model. What is core here is for the professionals to develop a deep understanding of what matters to the wealthy including their fears and concerns.
• Phase 2 – Evaluate Alternative Solutions: Whether it is asset protection or family security, a variety of different threats are common, and a large number of solutions can combat them. Moreover, there are ways of getting similar results by taking different actions. During this phase wealth managers will most likely consult with chosen specialists.
• Phase 3 – Select Solutions: Here the wealth manager and the specialists narrow down the gamut of wealth protection solutions, taking into account there are probably going to be a multitude of variations to a workable number. Then in close conjunction with the wealthy, the most viable ones for the particular situation are selected.
• Phase 4 – The Action Plan: At this time, the selected wealth protection solutions are customized or refined to the wealthy individual or family’s unique situation. This is when the “game plan” is made very clear. It is essential that the wealthy totally understand what they are choosing to do with all the advantages and disadvantages clearly delineated.
• Phase 5 – Implementation: This is the most straightforward part of the wealth protection process. This does not mean implementation is easy. It always calls for a tremendous amount of work.
• Phase 6 – Follow-Through: Even after the wealth manager has implemented the plan, it is necessary to constantly update the solutions. From situations changing in a wealthy individual’s world to developments in what is state-of-the-art in the asset protection and security fields, there will regularly be a call for tweaking to overhauling the action plan.
The ability for wealth managers to provide comprehensive and integrated wealth protection solutions is becoming very important to the affluent all up and down the wealth spectrum. This situation is only likely to intensify in the foreseeable future.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.
