We’re still figuring out what to make of this one. Your responses please?
Just received, an email from author and former private client lawyer Caroline Garnham, now at the Familybhive forum, who runs two organisations: The Virtual Family Office, a club for UHNW members with net wealth in excess of £5 million, and a training group called The Trusted Advisors Academy, “for advisers to the UHNW community who want to learn how to network offline and online effectively and efficiently, build trust and win business.”
Okay, it’s something of a novelty to hear such an impassioned plea for the welfare of Britain’s 100-odd billionaires, who Ms Garnham says are in danger of being used as a political soft target in the run-up to this year’s election. But has she got the tone right? And is her assessment of the opportunity for boutique adviser services correctly judged?
Is she, in short, barking or inspired? You decide. We’ll just let the email do the talking:
The New Year looks bleak for the UHNW community living in the UK.
Politicians, eager to win votes in the next election in May, are training their guns on the Super Rich as if they were sitting ducks. But they are not – they have options – they can fly away. They may not want to, but if the pain outweighs the gain, they will be off. The rich are not lame ducks; they are our golden geese. If they fly away there will be no more golden eggs. Increasingly our economy, advisors, the City and the poor are dependent on the wealthy few to fund the Treasury and deliver politicians’ promises.
Our 104 billionaires spend £16 billion a year in our country; they fill our shops, restaurants and theatres, engage our electricians, architects, and plumbers, pay VAT on their services and products. They employ staff to clean, captain, care and cook for them on which they pay NIC and PAYE, and for such companies which carry our business in the UK corporation tax.
The top 1% pay 28% of our income tax, and the top 0.1%, less than 30,000 people who would not fill Arsenal Football arena, pay a whopping 14.8% of our income tax.
Our Super Rich are not the problem, they are part of the solution and we need to wake up to this. If we do not we will all; advisors, the economy, the rich AND the poor, be worse, not better off.
…The UHNW community are however, not fools and they have sufficient financial flexibility to get up and go. We have already seen a shift in wealth management towards the multifamily office and the wealth management boutiques. The monolith institutions which have been caught with their proverbial pants down are now like steam liners; rudderless of ideas to steer back into clear water.
…In the decades leading up to the crash in 2008, the complacency of the Financial Services industry compounded the problems it now faces. It failed to train its employees in client care or how to win business. For those who were drawn to the profession eager to serve, the industry disappointed them. Many of the best have now left eager to provide client care in their own boutiques or multifamily offices.
….. Are these small personalised boutiques what UHNW individuals want? The real picture is somewhat more complex.
…. In 2014 I hosted a series of soirees in my home for UHNW individuals to find out what they really want. Surprisingly they want just three simple things:
- To learn what advisors do for their clients, but in a language they can understand, so they can make their own decisions as to who and what they want;
- To meet each other;
- To find advisors they can trust.
…. UHNW individuals feel they have been let down by the industry which serves them. Finding an advisor they can trust is like finding a lifeboat on a sinking ship. Of course, no passenger wants to leave a large and comfortable ocean liner, but when they feel they can no longer trust the ship they are on they will look to escape, regardless of comfort.
Gone are the days when advisors can win business merely because of their name and size. The collapse of Lehman Brothers is all too reminiscent of the Titanic. Name and size are no longer as important as transparency and trust. For advisors willing to embrace this new approach, small or large, the world of opportunity awaits.
Hence, Ms Garnham says, the need for organisations such as her “Trusted Advisors Academy”, which she says was formed “to help advisors through this transition into transparency and openness.”
“Caring for clients is understood by some of the smaller boutiques,” she says, “but is not rocket science. Transparency and honesty starts by being seen for what an advisor does for his or her clients. Not as a one off advert or brochure, easily forgotten but an ongoing communication which builds trust. To ignore what the UHNW community wants is to continue shooting in the dark, while the enlightened competition quietly snipes away at your clients.
The year may look bleak for the UHNW community, but with a new breed of advisor emerging, there may just be [a] silver lining.”
Caroline Garnham can be contacted at firstname.lastname@example.org