Decades ago, financial planners began articulating the importance of building a team of advisers for clients — consisting of an attorney, tax professional, investment manager, banker and perhaps insurance adviser — all working together in the best interests of a mutual client.
Historically, the concept has been rejected by both the professional advisers and the clients they serve. Advisers considered the collaboration unimportant. Estate attorneys did their job — they prepared wills and trusts and, handing the plan to the client, would advise them to "call if anything changes." Tax advisers were better — they would see their clients once a year, albeit usually only to collect tax information or to sign returns in April. Clients, themselves, were not enamored with the idea because this "collaboration" inevitably resulted in a bill from the attorney and tax adviser for their time.
Bank wealth management divisions, however, recognized the strength of having a multidisciplinary team to work with wealthy bank customers and saw it as a way to better serve their best customers. The added benefit to banks was, and continues to be, that they "capture a larger share of the customer wallet" by incentivizing their advisers to sell insurance, investments and other bank products to the wealthiest customers. Some banks consider themselves a one-stop shopping experience.
In the last few years, many professional advisers have come to embrace the idea of teaming up with their client's other consultants to better serve clients.
So, if you are a wealthy investor, what is the best solution? Should you let yourself be wooed by a mega-bank that has vast resources, a global presence and front-row tickets to the local golf tournament? Or would you be best served by a personal financial planner, a local money manager and your longstanding attorney and CPA?
Well, it depends. First, ask yourself some questions. Do you have a money manager whom you like and have been with for many years? Chances are that if you go to a bank wealth division, your manager will be replaced by the bank's investment managers. If you have unique family assets or investments that you want preserved for future generations, banks are governed by strict regulations that may disallow them from preserving these assets. Finally, if your family needs high-touch, personal services after you are gone, it may be advisable to find a local, professional adviser or trustee.
All that said, banks offer strength in numbers. They are a corporation with succession plans — if your bank officer retires, there is another to fill the spot. Banks have risk management and compliance procedures that are heavily scrutinized. Also, if a banker absconds with your funds, the bank will make you whole.
With a local team, each member is watching out for you and likewise watching your other team members. If a member needs to be replaced, another can be found. Like everything, make decisions after thorough and thoughtful analysis of your options.
Liza Horvath has over 30 years' experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust management company.
This is not intended to be legal or tax advice. Questions? Email email@example.com or call 646-5262.