Wealth Managers Embrace A New Best Practice for Client Success

A growing number of wealth management firms that focus on high net worth individuals are embracing the notion that clients expect more than just good investment management...
By: Eric Schirding
May 25, 2011 - PRLog -- A growing number of wealth management firms that focus on high net worth individuals are embracing the notion that clients expect more than just good investment management – proactive firms are seeking collaborative relationships with other professionals – relationships that ultimately aid the firm to deliver multi-level world class services to their clients. Dana Coates, CEO & President of the Western Division of United Agencies, Inc. is recognized as a trusted advisor and as a highly talented, competent resource, as such he and his firm are utilized by a number of financial advisory firms to augment the services they provide to their high-net-worth clientele.

The asset base that wealth management firms manage exist only as the result of someone’s effort – whether it’s old money or new money, somebody built the asset base that you are managing.

What if, for no fault of you or your firm, a huge chunk of those assets were lost, over night, as the result of an unexpected, uncontrollable and uninsured liability to your client? Clearly, such a loss would impact your client, but it would also impact you and perhaps many others.

Today, Directors and Officers and several other seemingly obscure types of losses are zapping assets at a disturbing and alarming rate. Those of us in the casualty insurance and risk management industry have been holding our breath with cautious optimism that this trend had changed, following the dot com era – but recent financial events and litigation are showing us that history is repeating itself.

Both Corporate America and affiliated wealthy executives need to make certain all their risk management – risk transfer ducks are in a row. However, for many, it’s already too late to do anything about their risk of loss.

Here are five dangerous excuses we hear wealth investment firms use for not encouraging their clients to seek a “property & casualty risk management review” from a Trusted Choice® Insurance Professional.

First, we are concerned that if we refer even a first class casualty insurance representative to review our client’s casualty insurance portfolio, the insurance representative might do something that is offensive to our client and such an incident could alienate us from our client.

This creates a lack of trust and causes the client to wonder if we are competent. It seems as though there are so many “self-serving” insurance people out there, we just feel as though, as good an idea as this service may actually be, we just don’t want to risk the relationship to someone that has a lot less invested in the deal. Let’s face it, we don’t want to be embarrassed by some guy trying to sell our multi-million dollar client a homeowner’s policy or a policy for their boathouse.

This can be a very real concern but the successful investment firms have adopted effective methods to address the risk, while seeing to it that their valued clients receive independent reviews followed by any needed adjustments so that they are confident and do, in fact, have a sound and thoughtfully prepared private casualty insurance portfolio.

Second, reviewing my client’s personal or business insurance “isn’t really an area I’m expected to focus upon or in which I have much experience, expertise or comfort.”

You’re right – property & casualty risk management is very different from the focused area of financial and investment management in which most investment counsel are proficient. Your clients rely on you to provide them, by enlarge, with investment advice, period.

This sometimes may involve life insurance, long term care insurance, annuities and other similar vehicles that assist your client to meet the goals upon which you and they have agreed.

But who are they relying upon to help them deflect direct risk through public liability and property damage, or in the case of professionals, error’s and omission’s liability. And what about your high profile clients who also serve on non-profit or public boards as directors, officers or trustees?

Often overlooked by some in the wealth management profession, are the very real direct financial risks associated with an improperly structured private property & casualty risk management strategy.

Third, my client tells me that their” Farmer’s, AAA, Allstate, State Farm, GEICO, 21st Century, or AIG agent handles all their personal insurance”, they don’t need another insurance salesman knocking on their door.

All investment counsel is the same, correct? One mutual fund meets all the needs of your valued client?

This is not the case.  The education you’ve received, formally and in the trenches, as well as the professional designations you’ve earned and retained through experience and continuing education represent some of the tools which you call on to do what you do.

On top of these, as if these were not enough, the very life experiences during which you’ve rolled up your sleeves and become directly involved in troubleshooting your clients’ special needs contribute to making you uniquely qualified to deliver the special skills and services that you alone deliver to your valued clients. Superimpose on all of the foregoing the fact that the need for flexibility and fast movement, while maintaining the integrity of the risk protection strategy of the wealthy, is exponentially different than that of main street America.

As in your industry, the property and casualty insurance industry has its share of the Average Joe order takers and price bidders. But your clients expect and deserve better, and it’s important that you direct them to the kinds of advisors that will operate with the same care and consideration by which you operate and at the same level of professionalism.

Fourth, if I refer in some “risk manager” or an “insurance person”, they could act in a manner that might result in actual legal liability to my wealth management firm.

Selecting the right property and casualty risk manager with whom to partner on complex projects is as important a process as selecting the right doctor, lawyer, wealth manager or banker.

You start off by meeting them and getting to know how they carry themselves but you also need to be certain that they have good history and are practical in how they conduct themselves.

Like your firm, a competent property and casualty expert is going to have at least $10 million in professional liability protection and knowing in advance that they have qualified and paid for such coverage means that, besides having the right disposition to interact with you and your client base, they also have become established sufficiently and are operating with all of the proper safety nets in place.

Fifth, I don’t know or trust, any property and casualty risk managers who specialize in serving the people with the kind of wealth that I handle for my clients.

If you have read this far you now know that you have at least one such resource. Let’s meet and see if there’s a natural connection.

Dana Coates is a licensed property and casualty insurance broker and has practiced what he does for over 30 years. Originally, a home office underwriter with the Aetna Casualty & Surety Insurance Company in Hartford Connecticut, Coates went on to become a fire protection engineer and later an independent fire and casualty broker. He considers himself to be a “problem solver.” Coates’ company’s believes in “Outside the box, inside the lines” – this is to signify that problem solving, as it relates to risk management and insurance, is very much a creative process but those creative solutions must fit inside the black and white space created by the wording of insurance contracts. Coates goes about “speaking insurance” in a most unique fashion and is a sought after resource by both corporate and individual high net worth clients.

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As a leader in the area of wealth management risk management, Dana Coates and his team at United Agencies bring a unique approach to wealth manager risk management, they help to prevent unexpected problems (for investors), from happening in the first place. United Western Insurance Brokers is a risk management and insurance brokerage located in Pasadena, CA Lic#0252636
Source:Eric Schirding
Posted By:***@unitedagencies.com Email Verified
Tags:Wealth Manager, Stock Broker, Risk, Profit, Investment, Loss, Banker, Manager, Financial
Industry:Banking, Accounting, Financial
Location:Pasadena - California - United States
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