Being rich offers little protection against making costly financial mistakes. For this week’s Barron’s Advisor Big Q, we asked financial advisors to identify errors that very wealthy individuals tend to make. One mentioned clients who overly concentrate stockholdings in the companies they work for. Another said she’s seen estate plans include spousal lifetime access trusts (SLATs) that don’t dissolve in the event of a divorce (ouch!). And there are, of course, many flavors of mistakes rich people make in passing on their wealth to their children.
In other most-read wealth management articles this week:
Early retirement’s allure. Financial advisors are fielding more calls these days from clients looking to retire sooner than anticipated. Accelerating the timetable takes careful planning and progressing through steps that include finding a devil’s advocate, crunching the numbers, and considering part-time work. Sometimes clients have trouble believing they will really be OK to retire early, but financial advisors say that people who stick to their financial plans can turn their dreams into reality.
Fleissig’s path. Englewood, N.J.-based multifamily office Pathstone is one of Barron’s top RIAs. CEO Matt Fleissig told us how the firm operates with an unbundled fee model in which clients pay only for the family office services they use. Starting with $1.4 billion in 2010, Pathstone has grown to $25 billion of assets under management and $100 billion when assets under advisement and administration are considered. Fleissig sees plenty of opportunity for more growth ahead.
Hightower’s new deal. Wealth management aggregator Hightower is acquiring Resource Consulting Group, an Orlando, Fla.-based firm with around $2.5 billion in assets. It provides fee-based planning services to high-net-worth and ultrahigh-net-worth households around the country. The deal marks the 11th acquisition this year for Hightower.
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Fightin’ words. An annuity trade group is firing back at President Joe Biden for his comments about the industry as the administration rolled out a proposal to extend fiduciary responsibilities to more retirement advisors. Wayne Chopus, the Insured Retirement Institute’s head, said Biden failed to explain why the fiduciary proposal was necessary, and instead “demonized and joked about the insured retirement industry.” Indeed, the rollout of the Department of Labor’s fiduciary proposal last week included several criticisms. For example, Biden said, “Right now, millions of Americans, especially seniors, are being targeted by financial advice and insurance brokers selling bad annuities that work for the broker and not for the client.”
Thanks, but no thanks.
is working to rid itself of some wealth management assets it obtained when it merged with Credit Suisse earlier this year. It has moved $5 billion of invested assets from Credit Suisse’s wealth management division to what it is calling its noncore and legacy division, or NCL. It has also reclassified $30 billion of Credit Suisse accounts “related to nonstrategic relationships.” UBS declined to comment on why it is winding down those assets, but the CEO has said the bank would conduct a “360 degree investigation” into the holdings of its former rival.
Also this week, we caught up with Virgil Kahl, a top-ranked woman advisor and president of $1.1 billion-asset Spring Ridge Financial Group, in Wyomissing, Pa. In our weekly Barron’s Advisor Q&A, Kahl told us how she went from being an accountant to an advisor—and why she thinks more accountants should make that leap. She also explained what she’s advising wealthy clients to do ahead of likely tax hikes. And she laid out the reasons why her practice isn’t a work-from-home type of office.
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Enjoy your weekend.
Write to Amey Stone at email@example.com