A survey by research firm Spectrem Group found the number of mass affluent, millionaire and ultra-high-net-worth households has reached a record high. "As the ranks of the affluent grow, it presents opportunities for advisors to show their value to those who heretofore may not have felt they had enough assets to warrant an advisor," says Spectrem's Catherine McBreen.
Register now for Annual Conference Experience—ACE Nashville, May 6-9
Earn up to 32.5 hours of continuing education credit by attending pre-conference and conference sessions at the Annual Conference Experience—ACE Nashville, May 6-9, at Music City Center. Register now and choose from six different tracks—investment management, wealth management, advanced business strategies, retirement management, institutional consulting or the art of wholesaling.
Do your clients think you're exceptional?
You may consider yourself an exceptional advisor, but do your clients? According to a recent AbsoluteEngagement and Institute survey on what high-net-worth clients value in advisors, advanced education through certification, professionalism, guidance and ethics top the list. How do you convey those attributes? Watch for an important announcement at the Annual Conference Experience—ACE Nashville to help you do so.
Explore quantitative tightening's impact, May 30
How will the Federal Reserve's measured approach to reduce its $4.5 trillion balance sheet impact your clients? Learn what to anticipate and the steps you can take to position your clients' portfolios at Focus on Quantitative Tightening, an online program.
Discover how to use ETFs effectively in your clients' portfolios, July 12
A Preqin survey found hedge fund managers reporting that they are providing concessions to investors with regard to fees, with 86% of respondents saying they have adopted high-water marks for one or more of their funds. The survey also found 57% responding that the industry is likely to undergo changes this year because of investors' fee-related demands.
Private placement life insurance is a type of variable-rate life insurance, typically available only to people with substantial investable assets, with benefits such as lower premiums, lower commissions and more investment choices, writes Harvey Bezozi, a certified financial planner. "When properly set up, a PPLI policy can provide both tax-free wealth growth and solid estate protection for your clients' heirs," he adds.
Property/casualty insurance coverage is an "overlooked gap in financial planning" in the US, but even though more than three-quarters of affluent adults want their financial advisors to assist with P/C coverage, only 28% of advisors provide such services, a Chubb study finds. "With 85 percent of successful families reporting heavy reliance on their advisor to help them navigate all financial matters, client retention can dwindle if they feel they're not receiving adequate support," Chubb says in the study.
According to a study published in the Journal of the American Medical Association, a "negative wealth shock" can raise mortality risk by 50%. Researchers defined this as seeing three-quarters of net assets lost within a two-year period.
A timeline based on responses from affluent investors illustrates how long it might take an advisor to turn a wealthy prospect into a client. "Even though affluent prospects don't like salespeople, the timeline isn't as long as you might think," writes Matt Oechsli, who notes the research showed 70% of prospects who became clients did so after one or two in-person meetings.
Some advisory firms are focused on serving high-net-worth clients, but overlooking the next generation of individuals could be costly to the long-term health of your business, writes Gail Graham of Graham Strategy. Serving younger clients who have great earning potential and making their accounts profitable is a challenge the industry can meet, she writes.
"Nonmonied" spouses, or those who come away from a divorce often with a large sum of money but with little financial expertise, present an opportunity for advisors. The draw of niche markets such as this is the long-term potential, says April Rudin of The Rudin Group, adding, "in situations like this, you're not looking for quantity, you're looking for quality of clients."
Advisors can look to George Kinder's "The Seven Stages of Money Maturity," for three contemplative questions to ask clients when discussing legacy planning, advises columnist Dave Grant. Addressing mortality can make for emotional conversations but may unlock legacy-building opportunities, he notes.
The Financial Industry Regulatory Authority has updated its anti-money-laundering template for broker-dealers, and it includes rules, instructions, helpful websites and other resources. The US Treasury Department's Financial Crimes Enforcement Network had released guidance on the Customer Due Diligence Requirements for Financial Institutions rule, and FINRA's update reflects that.
Amid multiple actions against financial advisors based on Rule 12b-1 of the Investment Company Act of 1940, the Securities and Exchange Commission has offered leniency to advisors who self-report violations and return money to clients. Advisors must notify the SEC of violations by June 12.
Character -- the willingness to accept responsibility for one's own life -- is the source from which self-respect springs.
Joan Didion, writer
About Investments & Wealth Institute
Established in 1985, the Investments & Wealth Institute, formerly known as IMCA, is a professional association,
advanced education provider, and standards body for financial advisors, investment consultants, and wealth
managers who embrace excellence and ethics. Through its publications, events, assessment-based certificate programs,
and advanced certifications, the Institute delivers premier-quality, practical education to advanced practitioners
in more than 38 countries.
The Certified Investment Management Analyst® (CIMA®) certification is the peak international,
technical portfolio construction program for investment consultants, analysts, financial advisors
and wealth management professionals. The CIMA program is distinctive as one of only a few global
certifications in financial services to meet international accreditation and quality standards (ANSI/ISO 17024)
for personnel certification programs. The Certified Private Wealth Advisor® (CPWA®) certification is
an advanced professional certification for advisors who serve high-net-worth clients. It’s designed for
seasoned professionals who seek the latest, most advanced knowledge and techniques to address the sophisticated
needs of clients with a minimum net worth of $5 million. Unlike credentials that focus specifically on
investing or financial planning, the CPWA program takes a holistic and multidisciplinary approach.
The Investments & Wealth Institute™, IMCA®, Investment Management Consultants Association®,
CIMA®, Certified Investment Management Analyst®, CIMC®, Certified Investment Management Consultant ℠, CPWA®,
Certified Private Wealth Advisor®, RMA ℠, and Retirement Management Advisor ℠ are trademarks of
Investment Management Consultants Association Inc. doing business as The Investments & Wealth Institute.
The Investments & Wealth Institute does not discriminate in educational opportunities or any other characteristic protected by law.
Contact the Investments & Wealth Institute
Phone: (303) 770-3377
Fax: (303) 770-1812
5619 DTC Parkway Suite 500
Greenwood Village, CO 80111