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How the Needs of UHNW Clients are Changing

By Crucial Clips     May 2, 2018
The following text is a transcript of a portion of a speaker's presentation made at an industry conference or during an interview. This transcript solely represents the view of the individual who spoke, and not the view of Financial Advisor IQ or any other group.
Source: FA-IQ, Mar. 22, 2018 

RITA RAAGAS DE RAMOS, SPECIAL PROJECTS MANAGER, FINANCIAL ADVISOR IQ: Hi. I'm Rita Raagas De Ramos from Financial Advisor IQ, and with me today is Richard Kelton, founder and partner at The Kelton Financial Group, which is part of the Northwestern Mutual Wealth Management Network.

Your firm serves a broad spectrum of high-net-worth clients. Could you tell us a little bit more about the profile of your clients?

RICHARD KELTON, PARTNER, THE KELTON FINANCIAL GROUP (NORTHWESTERN MUTUAL): Our clients are pretty geographically diverse. We have clients in over 30 states, a couple of countries. We have some clients that are on expat status. And our clients are mostly corporate executives.

We started originally with a corporation locally at home, and then when some of those clients got relocated to other parts of the country, we maintained our relationship with them.

RITA RAAGAS DE RAMOS: Do you require a minimum investment amount for you to take a new client?

RICHARD KELTON: We don't require a minimum investment account. In fact, now we're starting to do some legacy planning with the clients' children and stuff. We usually household them back to the client's residence to make sure they can get their fees reasonable and taken care of.

RITA RAAGAS DE RAMOS: What would you say are the greatest needs of your clients at the moment, and how would you compare that from a few years ago when you were just starting as an advisor?

RICHARD KELTON: So our clients are doing a lot more sophisticated things now. They're worried about their children's education in the beginning and protecting their families. And then they start to build their net worth, and they start to think about retirement, how that disbursement of their accounts are going to be, in what order they should be, and then ultimately their legacy planning, estate planning, things like that. The cases just become slightly more complicated.

RITA RAAGAS DE RAMOS: And how does your firm step into the picture and help them with these concerns that they have?

RICHARD KELTON: So basically we work on a referral basis. We get introduced to clients by our other clients. We have a quick introductory call with them, talk to them about what we can do and how we think we can help them. We send them a checklist of information that would be helpful for us to review.

Then we do an in-depth call with the client -- hopefully, both clients, the client and the spouse -- ask them questions about their goals and objectives, their quantitative and qualitative information. We prepare an analysis that goes over all of the things that we think we can help them with, get some feedback from them at another meeting, and then ultimately make recommendations.

RITA RAAGAS DE RAMOS: You mentioned that they're very concerned about passing on the wealth to the next generation. And I believe that you do a lot of legacy planning with them and estate planning. So how exactly do you help them out in this area?

RICHARD KELTON: So there's a couple things. Our clients want to make sure they have a proper will, durable power of attorney, health care proxy. A lot of our clients are doing more advanced estate planning with trusts, either a qualified personal residence trust or a marital trust.

What we try and help our clients do is make sure that they spent their whole lives growing their assets, and make sure that when they pass them down to their children or to a foundation or a charity, that they do it as tax-efficiently as possible.

RITA RAAGAS DE RAMOS: So how involved is the rest of their family in this process? Do you include them in at the onset?

RICHARD KELTON: So we usually don't. That would be fantastic if they would do that. We usually start with one spouse. If we can get both spouses on the phone, that's fantastic. And then we eventually try and get their children involved as they become older, finish college, and start to have interest in what's going on.

And then ultimately, at the very end, if we can get it, we do have a family meeting with everybody, explain this is what the first generation is doing, this is what they want the second generation to do. And we try and build out the plan with them.

RITA RAAGAS DE RAMOS: So what is the most challenging -- I think you might have already touched on it, but what is the most challenging part of this, with working with a multi-generational family?

RICHARD KELTON: So not everybody has the same goals. Some clients want to save all their money and make sure they're careful with it. Some clients want to spend their money and don't really care about the legacy part of it.

So getting everybody on the same page -- the husband, the wife, the children, if there's anybody else involved that's not a direct -- in their family, a cousin or a nephew, things like that. With everybody having a varying goal, sometimes, it's challenging to make sure everybody's on the same page of what the benefactors want.