Private client advisers: It's all about relationships

05/06/2018 Adrian Wilson, head of private clients, BKL,

The skills required to be a private client adviser are changing, with an emphasis now on understanding the human capital involved.

This means that the role requires emotional intelligence, not just financial acumen, to deliver the service expected, with intergenerational issues often central to the challenges as people are living longer and more active lives.

One consequence of this is that barely 20 percent of my time is spent on what might fall within a general definition of personal tax. The rest is occupied managing relationships, both with and on behalf of clients; and, increasingly, understanding complex tax law especially as it impacts on estate planning. 

The role still means working for people who are almost by definition, extraordinary. No two clients are the same, either; and they expect a bespoke service, not an off-the-shelf one.

The differences from an advisory perspective start with the way money has been acquired. Those who inherit landed estates, for example, often regard themselves as custodians. Above all, they want to pass on their inheritance intact to the next generation.

They represent a sense of stewardship and responsibility that has largely not changed. A self-made billionaire, by contrast, may take a more pragmatic view about making money ‘work’, and they will often have considerable personal wealth management expertise themselves.

The role of trusted adviser therefore requires both an ability to adapt, particularly to differing expectations, and to anticipate; to be imaginative but also conservative. A constant is that people are at its heart. They expect to be understood accordingly: as individuals who want absorption in their affairs and an anticipation of issues based on a deep understanding of what they want to achieve. This means that tasks can require a mental flexibility to solve.

There is also now a willingness to recognise and a desire to ease what can sometimes be the burden of inheritance. For example, we will put in tailored systems designed to mentor heirs to a fortune, effectively creating a financial creche; somewhere safe to learn and make mistakes. A generation ago beneficiaries were often left to ‘sink or swim’ with their entire inheritance. That is rare today.

For example, it can be stressful for parents to have a young child inherit a substantial sum from a family trust. I regularly give tutorials to teenagers about basic budgeting, but also about understanding how their wealth may impact on other people around them.

There needs to be empathy, a human connection, to be successful; so the job is not for those who want barriers between people and the work they do for them. In the world of private client, people are the work. It also requires being tough when necessary. There are instances when a beneficiary is transformed adversely from a capable adult after inheriting their wealth into a spendthrift. On those occasions it is important to take a lead, to offer a way forward that is pragmatic and respectful and effective. 

The job also involves helping members of a family, all with different ambitions and personalities, to reach agreement over a change. Wealth is often surprisingly fragile, and jointly held can be blown apart by disagreement. It can also be lost because the skills of those who generated it are not passed on or are unvalued by heirs.

There is some truth to the saying ‘from togs to clogs in three generations’, so being a trusted adviser requires not just a complete understanding of wealth management or tax planning, but of human nature. A generation ago that was less obvious and private client advisers could often take a template of services and actions to a prospective client. Not anymore.

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