Michael Cole, president, Ascent Private Capital Management, San Francisco
The assumption:
That money, resources and possessions buy happiness.
Money might make some things easier, but it also complicates life--particularly relationships and decision-making.
How to avoid it:
"Listen, and listen between the lines for what the client is saying," Mr. Cole recommends. And don't jump too quickly to offer a product or service.
John Voltaggio, managing director, wealth management, Northern Trust, New York
The assumption:
The client wants to leave as much as they can to their children and grandchildren and want to treat all of them equally.
In fact, many want to impose limits, or otherwise structure any inheritance so an heir is motivated to work and be productive. And they don't see all heirs the same. "Many clients don't feel that each of their children can handle the challenges of wealth," he says.
How to avoid it:
Gain a full understanding of the client's feelings about their wealth and each of the people who will inherit it. Then structure a plan accordingly. Communication is the key.
Cassidy Burns, principal, Riverbridge Partners, Minneapolis
The assumption:
When someone has accumulated or inherited enough to be truly wealthy, they don't want instruction in basic financial planning and budgeting.
How to avoid it:
Always offer to help clients with budgeting, and tracking that budget. They may not need the disciplined approach to ensure they have enough money to live on, but "they'll have an increased sense of well-being if they have an awareness of how their money is spent," Mrs. Burns says.
Katherine Dean, managing director of wealth planning, Wells Fargo Private Bank, San Francisco
The assumption:
A new client, particularly one who owns businesses or other big assets, wants to see how well prepared the adviser is. So the adviser presents a fully formed plan, right off the bat.
"Those who get stuck on a predetermined 'pitch' often end up losing a client," she says.
How to avoid it:
Listen to what the client has to say. Then repeat it back to them. Use this information to really prepare the plan. "No matter how long an adviser has been in the business, they should always be honing their listening skills," she says.
Nathan Dungan, owner, Share Save Spend, Minneapolis
The assumption:
The adviser's role is purely to help preserve and maximize the client's wealth, for instance by minimizing the impact of taxes on the estate.
How to avoid it:
Engage clients in discussions about the qualitative--not just the quantitative--aspects of money. Determine what role they want it to play in their lives, and in the lives of future generations. Then plan accordingly.
Todd Morgan, senior managing director, Bel Air Investment Advisors, Los Angeles
The assumption:
The very wealthy can afford a lot of risk, and their portfolio should reflect that.
Advisers need to remember that clients with lots of money are often most concerned with preserving it. "It's important they don't interfere with the sleep-well quotient of the client," he says.
How to avoid it:
In determining an investment mix, "rule on the side of caution." Being too conservative is better than taking too much risk, even if the client has the wealth to handle it.
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