Ultra-Wealthy Families Make Big Money Mistakes Too

Because families in this situation often outsource bill paying and investment management to various trusted advisors, these clients can benefit from tech-backed coordination that helps ensure that each party is proactively (and accurately) notified about recurring responsibilities.

These families also find their levels of liquidity shifting over time in a way that can make paying bills a surprisingly complex process, and it is important to ensure that clients won’t need to liquidate what are meant to be long-term investments in order to cover short-term expenses.

“Above that is another level where the truly complex families are served,” Eyler says. “These are families with a huge amount of wealth tied up across all different sorts of trusts, business entities, ownership groups, etc. The key in this segment is both staying on top of bills and investments but also providing that overall, consolidated financial picture.”

Adding Value in Surprising Places

In Eyler’s experience, it is not uncommon for clients across these segments to share horror stories about long-running mistakes made by an advisor that resulted in outcomes such as houses being put up for sale due to tax delinquency or power being shut off because no one knew who was paying the utility bills.

“In our world, there is a lot of value in what we do because we aren’t just regurgitating information,” Eyler explains. “We are actually looking at the client’s information, and our analytics can check for key things, like has a certain payee changed since the last go around? Has the amount of a recurring bill changed in an unexpected way?”

One time, the firm was able to help a family spot a damaging water leak in their home, because the utility bill had shot up without any other explanation. In another instance, the company noticed that fraud was potentially being committed because the client’s cellphone bill changed unexpectedly and there were unknown lines being added to the account.

“And for those super-complex families that I mentioned, we are actually looking through the trust documents and working with the trustees to make sure everything is going according to plan,” Eyler says. “In other cases, these families get our reports and they are shocked to see how much they are actually spending on things like clothing or dining on a monthly or annual basis.”

Different Means of Adoption

According to Eyler, there are many potential pathways for advisors to incorporate this type of thinking.

“There are some investment advisors who have embedded our process fully into theirs,” Eyler points out. “This group is providing, in my opinion, the best value to their clients, because it is an ongoing, proactive and holistic approach. In other cases, advisors elect to go with more of a third-party handoff approach, if you will.”

This latter approach tends to be useful when advisors are working for a big firm, for example a major bank, that puts significant compliance-based restrictions on communications and data-sharing capabilities.

“Then there are some other RIAs who take a different approach entirely, and they work very closely with us,” Eyler says. “They are in fact the ones who are paying directly for our services, though they may pass the cost through to the client. But in those cases, it is actually the advisor who is our client, and we work very closely with them. We’re happy to take different approaches.”

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