Read Resources. Click to access BrokerCheck. Professionals with a digital profile have paid a promotional fee. Eligibility criteria — required: 1. Credentialed as a registered investment adviser or a registered investment adviser representative; 2. Actively licensed as a registered investment adviser or as a principal of a registered investment adviser firm for a minimum of 5 years; 3. Favorable regulatory and complaint history review As defined by Five Star Professional, the wealth manager has not; A.
Been subject to a regulatory action that resulted in a license being suspended or revoked, or payment of a fine; B. Individually contributed to a financial settlement of a customer complaint; D.
Filed for personal bankruptcy within the past 11 years; E. Been terminated from a financial services firm within the past 11 years; F. Been convicted of a felony ; 4.
Fulfilled their firm review based on internal standards; 5. When this person became of driving age there was a car to drive. There was nothing barebones about it. For this person, a car was a vehicle to be enjoyed, a vehicle to give a wonderful ride to wherever you were going. There was no focus on toys in the car. It was not viewed as something luxurious or wonderful to be in.
In this case, the husband bought the new car and brought it home. He believed he had put a lot of thought into the features his wife would enjoy. But the wife had grown up with very basic cars and she was resentful of the car that came home. The different view of money values came out clearly in the way they were raised in their approach to cars and there was this horrible disconnect. But it launched a wonderful conversation that went great from there.
Knowledge Wharton: I remember this story from the book. The husband bought a more modest car than he might have because he was deferring to his wife, but it still caused some conflict. Miller: What I have found is that if we can help open that conversation where they realize there is such thing as a money value and that they look at money differently, then we can help adjudicate disagreements over time.
Knowledge Wharton: If some members in a family value security while others value independence or success, what implications would this have for the kind of assets in which they should invest?
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Miller: A person who cares about protection tends to be a conservative investor while someone who sees opportunity and success generally looks for more aggressive investments and enjoys tracking them. It is not always easy to combine these two approaches. In some cases, while the couple shares their wealth, we also make them have some separate accounts in their individual names. We tilt these separate accounts in favor of their individual approach. Knowledge Wharton: When it comes to choosing advisors, affluent investors sometimes judge them based on how often they beat the market.
What do you think of that approach? Miller: We firmly believe that is not the right approach. Your overall goals are 20, 30 years out and are about sustaining a lifestyle, creating a legacy for a family, and perhaps creating some type of philanthropic legacy. We work with clients and identify the major goals, and through a series of analysis put a number to it. What is the goal of this portfolio to grow year-in and year-out to have confidence that we can meet a number of short and long-term goals, whatever they might be.
If we can track quarter-after-quarter, year-after-year, that the portfolio is hitting the goal we know will get us to the endpoint, how we perform relative to the market becomes irrelevant. Knowledge Wharton: Your book recommends that wealthy families should focus on the three L goals. Can you explain what these are and why they matter? These are goals that are up and beyond your everyday life and current lifestyle and can apply at any age.
They may be significant trips; they may be vacation homes; they may be things that are going to make a difference in your lifestyle. So that is the second L — lifestyle. You may have legacy goals early or later in life.
Some of the legacy goals are financial but many of them are emotional. How and when do I start gifting to my children and my grandchildren, and how do I do it in a way that I can continue to maintain good financial values for them like their incentives to save.
How can I support the families they are building without taking away the path that is important to them to follow with their children. These are the questions we find ourselves working with more often than the easier question of how much money do I want to leave and to whom. Knowledge Wharton: How should investors align their investments with these goals? Could you give an example where this worked and where it did not?
Miller: Sure. This is a very measurable, long-term legacy goal. It could be 20, 30, 40 years off. Investments to reach that goal could be long-term in nature.
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They could also have a little more risk to them because there is so much time before they need to be achieved. Leisure goals by nature are generally short-term. So those are at the other end of the spectrum. We need to protect those funds. We need to think about how we are going to invest those funds to make them available. What I do sometimes see, and this is more with our second generation of clients, is that they fail to share their leisure goals with us.
While we are investing for them for the long-term, on very short notice they tell us that they have come up with an investment opportunity in an apartment building or that they are buying a second home somewhere. So then there is a quick liquidity need that has not been worked into the portfolio. We can always meet that need, but it definitely ends up with suboptimal performance. Knowledge Wharton: Speaking about legacy, how can investors unclutter their approach to philanthropy?
Miller: That often gets cluttered the same way a portfolio does. Early in life there may have been a short list of things you wanted to support. You may have supported them once a year with a check. But then that list keeps growing.
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It is very generous, it is a very wonderful, but it can get cluttered. It can also take away from the ability to decide which of these causes are more important to you and where you want to commit more. You may want to give more with your time, with your leadership, with your planning abilities. Those are some of the things we talk about in terms of thinking about philanthropy more strategically.
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Knowledge Wharton: The primary focus in your book is for wealthy investors and families. Are there any lessons that are useful for people lower down the economic ladder? Miller: Absolutely. The gist of the book is that the reason we lose the sense being in control is because things get way more complicated than they need to be. It is all about simplifying. No matter how much wealth we have, we can keep working on simplifying it. We can reach our goals with a simple, straight-line approach. The battle started when a relatively unknown Chinese activist investor, the Baoneng Group, quietly began to buy up shares of[…].
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