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Recently I had to ask a client, “Remember when I told you that there would come a time when your financial life got to the level of complexity that we needed to bring in a CPA?”
“Mmmhmm,” responded the client – who had always self-prepared their tax return.
“Congratulations,” I told her. “We are there.”
Our firm began working with this client as soon as she graduated from medical school. In the early days, it was cash flow management. Next, it was preparing for a dual-income household with no kids. Then, a few short years later, there was dual income and kids. As her life blossomed before us, so did her career.
Meanwhile, as an associate, I transitioned into partnership tracks and later into acquisitions, mergers, and buyouts. Initially focused on maxing out a 401(k) plan, I soon shifted to diversifying my portfolio and incorporating real estate investments. Life became increasingly complex as my net worth grew.
Serving a HNW audience
As financial advisors, we all aspire to serve high-net-worth (HNW) clients who require complex financial strategies and comprehensive wealth management. Still, for our firm, that was never our target avatar. Rather, it just happened naturally.
We once told one of our financial advisors the difference between an HNW and an “average client” (normally meaning between $1 million and $3 million in net worth was simple: nothing. Either way, they’re entrusting you with their entire life’s savings, so you better get it right.
As life becomes more complex, financial planning demands more than just a basic understanding of financial planning. It requires an unwavering commitment to continuous learning, building a strong team of experts, and staying ahead in an ever-evolving industry. This is especially crucial as you navigate the “Complexity Curve,” a concept highlighting the increasing complexity of financial lives as net worth rises.
The Complexity Curve: A unique challenge for advisors
The term “Complexity Curve” refers to the growing intricacies that come with managing the wealth of high-net-worth individuals. As their assets grow, so do the complexities of their financial portfolios. This includes everything from business ownership and large qualified plans to complex estate planning issues. Simultaneously, their personal lives often become more complicated, with factors such as marriages, grandchildren, and other family dynamics adding layers of complexity.
For advisors aiming to serve this clientele effectively, moving up the Complexity Curve is essential. But this isn’t something you can achieve alone — it requires building a team of collaborators with specialized knowledge across various disciplines. This team-based approach allows you to provide truly holistic and tailored solutions to your clients.
Building your dream team: The key to comprehensive wealth management
One of the biggest challenges advisors face is assembling a team that can handle the multifaceted needs of clients. These clients expect a level of expertise and support that goes beyond what a solo advisor can offer. To meet these expectations, you need to surround yourself with professionals who excel in areas like tax planning, estate planning, legal services, and wealth management.
This is where the power of collaboration comes into play. By partnering with subject matter experts, you can ensure that your clients receive the best possible advice and solutions. Whether it’s working with a top-notch CPA, a seasoned estate planning attorney, or an asset protection specialist, having the right team in place is crucial for success.
Staying ahead: The importance of continuous learning
In the world of “instant information,” staying current is not just a necessity — it’s a competitive advantage. The financial landscape is constantly evolving, with new regulations, products, and strategies always emerging. To serve clients effectively, you must be committed to continuous learning and professional development.
This is where events like the Retirement Tax Services Summit, taking place in September 2024, come into play. Attending industry conferences, summits, and workshops is an excellent way to stay updated on the latest trends and best practices. It also provides an opportunity to network with other professionals and learn from their experiences.
At the Retirement Tax Services Summit, you’ll gain insights into advanced tax planning strategies, wealth management techniques, and industry developments. These events are designed to help you move up the Complexity Curve by providing you with the knowledge and tools you need to serve your clients more effectively.
Taking action: How to move up the Complexity Curve
So, how can you start moving up the Complexity Curve and positioning yourself as a trusted advisor to clients? Here are some actionable steps:
- Clarify your vision. Start by defining where you want to be in the next year, three years, and five years. Having a clear vision will help you stay focused on your goals and avoid distractions.
- Build your team. Surround yourself with a team of experts who can complement your skills and provide the specialized knowledge your clients need. This includes collaborating with CPAs, attorneys, and other professionals.
- Commit to continuous learning. Set aside time each week for professional development. Whether it’s reading industry publications, attending webinars, or participating in study groups, make learning a priority.
- Expand your reach. Identify potential clients and referral sources, such as CPAs, law firms, and other professionals who work with individuals. Build relationships with these partners to expand your network and attract more clients.
- Attend industry events. Make it a point to attend conferences and summits that focus on the challenges and opportunities in serving clients.
Serving clients is both a challenge and an opportunity. By moving up the Complexity Curve, building a strong team, and staying committed to continuous learning, you can position yourself as a trusted advisor who can navigate the complexities of wealth management with confidence.
Jamie Shilanski is a Registered Financial Consultant® for Shilanski & Associates, Inc. As an RFC® she helps clients understand the various options and nuances of financial services so they can make informed decisions. In this discipline, she customizes a financial plan that fits their unique set of circumstances.
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