(Phoenix Business Journal) Wealth management has evolved beyond picking investments for portfolios. High-net-worth clients want help with needs as diverse as estate planning, portfolio management, and trust administration.
As the new managing director for BMO Wealth Management in Arizona, Jason Miller leads a multidisciplinary team of investment professionals and support staff in managing a total of more than $2 billion in assets for 800 high-net-worth households across the state. Miller recently reflected upon how wealth management has changed while sharing knowledge and insights from his 15 years in the industry.
Can you describe the reach of BMO Wealth Management in the Arizona market?
We have offices in the greater Phoenix area as well as Tucson. We serve clients across the state.
Some of our clients have second homes here, and some have relocated here. Our private wealth practice is entirely high-net-worth individuals, many of whom are business owners.
What are the reasons a business owner or high-wealth individual turns to work with a wealth management group?
In an increasingly complex world, it’s hard for one person to be well versed in all the different areas of wealth management. Our clients are looking for a strategic partner to help them think through various considerations. So, we bring a team-based approach.
For example, we help business owners think through their personal wealth strategies as well as their business strategies. We help them step back and consider things that they may not think about on a daily basis because they’re not part of their operations but that can still have a long-term impact.
A good price for their business viewed in a vacuum isn’t necessarily the whole picture that an owner would need to consider. Let’s say we do an analysis and find that they will need a $20 million pool of assets to sustain them and accomplish all of their goals after they sell the business.
We will help them understand that they can make tradeoffs in their retirement or that there are things they can work on in their business over the next few years to increase its value. They can work on the business side, the personal side, or both. But it’s important to have that holistic analysis done.
What are the products most clients typically seek with a wealth management firm, and what are the products you wish clients knew more about?
The value is understanding the strategy of how people should be invested, rather than specific products. That’s the future of the industry: advice-centric.
If someone is coming to you with an investment product first, that should be a red flag. It should be a discussion about goals, values, and needs first. Then eventually you will get to the implementation.
From a wealth management perspective, how does the selling of a business or passing the business to another generation differ from someone in their 60s compared with someone in their early 40s?
Age can be one of the important variables that impacts someone’s goals. But we try not to assume that everyone wants to retire in the typical sense.
We ask clients, “What does a post-transition life look like in your mind?” Or, “What do you want to do after you sell your business? How do you want to spend your time?”
A lot of times we see that the owner wants to stay engaged in the business they’re selling in some fashion or to do something else in the field or to do something else entirely. We want to talk about what’s next for them and what are their goals.
The wealth management industry has transformed in the past 10 years with growth in robo-advisers, for example. What do clients risk overlooking if they compare just the fee between a robo-adviser and a full-service wealth management group?
It’s a huge mistake for investors to look at any one variable in isolation, whether it be cost, taxes or historical returns, for example. Full-service providers are positioned to be able to offer people of more significant means more than just that core portfolio construction process that you would typically get with a robo-adviser. That product and process have been commoditized.
So, it’s a mistake to just look at the portfolio and the cost of the portfolio because so much of the value added by a full-service wealth management group is outside of that.
For business owners in the area, how can they take advantage of your wealth management services?
We’re as selective about the clients we work with as they are in the providers they choose. We’re looking for clients with shared values that we could work with for the long-term.
The best way is for them to meet the people who deliver the advice. They will help them take a step back to look at, “Where am I? What do I really want to accomplish? And what do I need to do to make sure those two things are connected appropriately?”