Inside the Elite Advisory Practice

Dec 2017 by Hannah Grove

INSIDE THE ELITE ADVISORY PRACTICE - CoverElite advisors — professionals with annual incomes consistently exceeding $1 million — are more likely to offer holistic wealth management services to their high-net-worth clients than other advisors according to research from iCapital Network.


Elite advisors — professionals with annual incomes consistently exceeding $1 million — are more likely to offer holistic wealth management services to their high-net-worth clients than other advisors according to research from iCapital Network. The research was conducted with more than 800 advisory professionals and examined the use of more than 40 different activities, services and techniques that spanned from the early stages of business development through client onboarding and ongoing relationship management.

Every advisor surveyed provides investment management services — a fact that helped to establish a baseline for how the large majority of advisors operate today on behalf of their clients and may indicate that investment advisory by itself is no longer a differentiating factor, but rather a requirement to compete.

By contrast, top earners have purposefully extended their capabilities to include a more robust range of investment offerings, as well as advanced planning and lifestyle support in order to provide more comprehensive solutions to their affluent clientele.


Figure-01-Provide-Hedge-Funds-By-Annual Income Figure-02-Provide-Private-Equity-By-Annual Income

On the investment front, private equity and hedge funds are more likely to be offered by elite advisors than their less successful counterparts. As evidence, 100 percent of advisors with million dollar incomes provide hedge funds as compared to just 20 percent of the total population surveyed (Figure 1). Similarly, about eight in 10 elite advisors offer private equity as compared to just 11 percent of the broad population (Figure 2).

As practitioners strategically evolve their platform of investment capabilities, this is a meaningful correlation to consider — albeit not causative. Many hedge funds provide risk mitigation benefits, while private equity offers the potential for enhanced returns. Both strategies are widely used by institutional investors and family offices, and enable elite advisors to offer sophisticated investment solutions to their wealthy clients in keeping with those employed by the largest and most knowledgeable investors.


Beyond investment management, elite advisors have carefully developed their outsourcing networks to include a variety of experts so they can offer bespoke wealth management support to their affluent clients and introduce key estate planning, asset protection, tax mitigation, philanthropic and lifestyle services that complement their core investment advisory offering (Figure 3).

And while advanced planning is offered with greater consistency by a broad cross-section of advisors, it’s worth noting that all top earners treat it as a central part of their value proposition and they further distinguish themselves with other specialties that meet the unique concerns of wealth holders. Case in point, 95 percent of elite advisors can connect their clients with concierge healthcare and 100 percent offer access to private security services, demonstrating awareness that personal concerns about wellness and safety are top priorities for the high-net-worth market.

Figure-03-Access-to-Specialists-By-Annual Income

These types of services are viewed by some as a distinct departure from strict financial planning, but they serve to complement a core offering of investment management and provide a well-rounded suite of services that address the top-of-mind needs of wealthy clients.

The higher the assets in question, the more likely it is that truly customized services will be required. Importantly, many successful advisors are refashioning themselves as generalists and choosing to focus on coordinating the specialists who can help them deliver on a variety of complex strategies, rather than focusing exclusively on a single in-house approach which can be inefficient and costly to modify. Operating in this way can be especially effective in designing and deploying holistic solutions, ensuring that the full range of products and services are working together toward the same goals while eliminating any redundancies in portfolio exposures and fees that can occur without professional oversight.

Elite advisors represented just 5% of all advisors surveyed, indicating that this level of success is rare within the industry and, most likely, difficult to achieve without concerted effort and access to the right combination of partners and intellectual capital. As wealth creation continues apace in the US and around the globe, there is a greater need for these types of broad-based practitioners who can deliver a complete wealth management experience and much bigger opportunities for those who can.

This article originally appeared in Family Wealth Report.


This material is provided for informational purposes only and is not intended as, and may not be relied on in any manner as legal, tax or investment advice, a recommendation, or as an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any fund or security offered by iCapital. Past performance is not indicative of future results. Alternative investments such as those described are complex, speculative investment vehicles and are not suitable for all investors. An investment in an alternative investment entails a high degree of risk and no assurance can be given that any alternative investment fund’s investment objectives will be achieved or that investors will receive a return of their capital. The information contained herein is subject to change and is also incomplete. This industry information and its importance is an opinion only and should not be relied upon as the only important information available. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Securities may be offered through iCapital Securities, LLC, a registered broker dealer, member of FINRA and SIPC and subsidiary of Institutional Capital Network, Inc. All rights reserved.