Team players

When developing teams to serve UHNW clients, defined as those with at least $5 million in investible assets, there are several options. These include in-house teams, more typical of larger firms; hybrid teams, in which some experts are in-house and others are external; and external experts, who often extend to a client’s pre-existing relationships, such as lawyers and accountants. There are, however, no fixed rules about how these teams are formed – and there are almost as many variations in the details as there are financial advisors who serve UHNW clients.

For example, Chris Newall, vice president, director and portfolio manager with Toronto-based RBC Dominion Securities Inc., works alongside two top-level investment advisors. Together, the three work with a team of almost 20 people, including support staff. Newall’s own practice includes three associate advisors and a project manager who report to him. Like the two other senior advisors, Newall and his associates can call upon the in-house expertise of two traders and two administrative staff.

Advisors such as Newall also can draw on their firms’ wealth experts for help with tax-related, legal and business matters to develop customized plans for UHNW clients. These functions can include reviewing estates, selling a business or cross-border issues for clients who have assets in both Canada and the U.S.

For example, to help a family who were considering selling their business, Newall first drew up a financial plan, together with internal tax, legal and financial planning experts who are part of an internal group called RBC Wealth Management Services. Newall then brought in an RBC business specialist who worked with the client directly to prepare the business for sale. Newall, as the primary advisor, remained in close contact with the client and all members of the RBC team.

“The [RBC] business evaluator formed a close relationship with [the client family] and ended up meeting with them two or three times outside of business hours at their home,” says Newall. “I was present for some of those meetings. Not all, but I certainly was present for the overarching strategy, as it would impact decisions that would be made [regarding the financial plan] and ongoing investment management.”

In some cases, seeking advice outside these in-house divisions may be best for your clients. For example, although an in-house expert may point out that a client’s will needs revision, an external lawyer needs to prepare that document.

While you may be able to recommend a lawyer or accountant for such tasks, many UHNW clients have existing relationships with such professionals and prefer to deal with them. Indeed, you may find that these existing relationships provide avenues for you to connect with potential clients.

“[Our clients] had some people that they lean on regularly and we tend to get to know those people very well, and we’re part of the [client’s] team,” says Rory O’Connor, senior vice president and portfolio manager with Toronto-based Richardson GMP Ltd. in Vancouver.

How often you need to work with other professionals can vary, depending on the time of year and your client’s needs. For example, some advisors may work with estate planning lawyers only occasionally, such as when a will needs to be updated; other advisors may find themselves talking with tax experts throughout the year.

Typically, you would discuss matters with these experts over the phone, particularly if it’s a small issue. That helps to keep costs down. “The client doesn’t want to get billed for us interacting with their accountant, so we try to keep the interactions short and sweet,” says O’Connor.

In some cases, however, a matter may necessitate having everyone around the same table. O’Connor typically holds a meeting with his largest clients, their accountants and, on occasion, their lawyers once a year. These meetings generally follow the calendar yearend or the client’s corporation’s yearend if the client is a business owner. Says O’Connor: “It’s kind of an annual general meeting for the client.”

Apart from accountants and lawyers, outside experts may include other specialists. O’Connor, for example, sometimes refers clients to mortgage brokers whose credit expertise goes beyond simple borrowing practices and who are familiar with asset-based lending. Wealthier clients may need these referrals because they need access to lending models based on their wealth rather than conventional income streams.

“The client might be exceptionally wealthy, but doesn’t have a conventional T4 income and a day job,” says O’Connor. “So, [that requires] a different lending process.”

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