Advisor Roles
A well-constructed team of advisors leverages the expertise and experience of each team member for the benefit of the owner.
This chart summarizes some of the most common types of financial service providers wealth owners rely on for integrated solutions. Many of these firms offer services beyond the role that is identified here, but it is helpful to understand their primary area of expertise.
| Type of Advisor | Primary Role | Regulator or Source of Accreditation | How Clients Are Charged |
|---|---|---|---|
|
Product/Service Providers |
|||
| Banker |
Business valuation
Cash management
Loans
Lines of credit
Liquidity planning
|
Federal and state banking regulators (OCC, FRB, FDIC, OTS, NCUA) | Fee for service |
| Investment Broker | Securities trading and settlement | Financial Industry Regulatory Authority (FINRA) | Commission or fee for service |
| Insurance Agent |
Advice and underwriting for property, casualty, life, liability insurance policies
Use of insurance in estate planning
|
State regulatory agencies | Commission |
| Investment Manager |
Investment research
Portfolio Construction
Performance reporting
|
U.S. Securities and Exchange Commission (SEC) | Percentage of assets under management (AUM) |
|
Professional Advisors |
|||
| Accountant |
Financial reporting
Tax planning
Tax return preparation
|
American Institute of Certified Public Accountants (AICPA) | Fee for service |
| Attorney |
Contract negotiation
Estate and tax planning
Legal documentation (trusts, wills,
pre-nuptial agreements)
|
American Bar Association (ABA) | Fee for service |
| Financial Planner |
Budgeting and cashflow management
Integrated planning including investments, estate, tax, and insurance
|
Certified Financial Planner (CFP)
Board of Standards
|
Commission or fee for service |
| Investment Consultant |
Goals-based strategies
Asset allocation
Investment policy development
Manager due diligence
Performance measurement and monitoring
|
Investment consultants that take discretion must be registered (RIA) with the SEC | Percentage of AUA or fee for service |
|
Fiduciaries |
|||
| Custodian |
Consolidated financial reporting
Dividend and income collection
Securities safekeeping
Trade processing and reconciliation
|
Federal and state banking regulators, SEC for investment products | Fee for service |
| Trust Company |
Beneficiary training and communication
Fiduciary oversight of integrated planning process, including investment management
Trust accounting and administration
Trust distributions
|
Federal and state banking regulators | Fee for service |
| Multi-Family Office/ Integrated Wealth Advisor | Coordinator of all wealth management services in conjunction with trusted family advisors | Depending on structure – federal and state banking regulators or SEC for investments | Fee for service, often percentage of AUM |
| Single Family Office | Dedicated resource/gatekeeper created to manage risks and oversee owner’s family and financial needs | Depending on structure – federal and state banking regulators or SEC for investments | Fee for service, often percentage of AUM |
The last option, the dedicated single family office, offers wealth owners the most customization and control of the process, with limited conflicts of interest. However, many wealth owners are looking to multi-family offices and other wealth advisory firms for the benefits of the family office without the overhead, expense and complexities of running another business. As the number of MFOs has grown, and all sorts of advisors are claiming to offer integrated services, owners are challenged to distinguish the best from the rest.