Wealth Management Elite
Everybody says they offer wealth management these days. But do they? Not really, says research and consulting group CEG Worldwide. Wealth managers use a truly consultative approach, and a lot of advisors are actually what CEG likes to call investment generalists. In a recent report, CEG Worldwide and Dow Jones surveyed over 2,000 advisors from wirehouses, independent b/ds, and RIAs to uncover some of the best practices of top wealth managers. The resulting report, titled Best Practices of Elite Advisors: The Wealth Management Edge, found some interesting things: For one, wealth managers say they don't really do financial or estate planning. Huh? Peter Kurey, executive director of Strategy at Dow Jones Enterprise Media Group, explains: While investment generalists are offering financial planning as a product, wealth managers consider it a comprehensive and consultative practice. Basically, investment generalists will sit a client down for say, two hours, write out a plan, charge him a fee and send him on his way. Kurey also points out that wealth managers typically outsource services such as estate planning to third-party experts. In the table at left are the services that each advisor type, as defined by CEG, provides. Oh, and by the way, it pays to be a wealth manager: True wealth managers control an average of $645 million of assets, while investment generalists manage $308 million; wealth managers enjoy an average net income of $881,000, compared to $279,000 for generalists.
| Services Provided | Wealth Managers | Investment Generalists |
|---|---|---|
| Life Insurance | 94.9% | 58.9% |
| 401(k) or other retirement plans | 91.2 | 72.1 |
| Derivatives | 73.2 | 40.4 |
| Executive Benefits | 44.9 | 17.9 |
| Recruiting Planning | 37.0 | 74.0 |
| Financial Planning | 8.7 | 49.3 |
| Estate Planning | 5.1 | 36.0 |
| Life Planning | 0.0 | 16.1 |
| Source: Dow Jones/CEG Worldwide | ||
