Ask someone to generate a new idea and you may tell them to put on their ‘thinking cap’. If we are impressed by them, we may ‘take our hat off’ to them. Or, if we want them to keep their idea a secret, we may ask them to ‘keep it under hat’. The age-old idioms of wearing different hats in different circumstances provide a metaphorical transformation – an opportunity to play different roles.

In our industry wealth managers aspire to deliver holistic solutions to the affluent. The successful wealth manager must not only be the client’s technical expert, but also their counsellor, life architect, navigator, and educator – wearing different hats for each situation that arises.

Working alongside The OneLife Company, Scorpio Partnership surveyed over 600 HNW Europeans to determine the needs of today’s super-wealthy and subsequently identify what the most pertinent hats are for the modern day advisor.

1. The Counsellor

Large sums of wealth can reveal feelings of worry, fear, pride, ambition and happiness. The Counsellor’s Hat provides a framework through which advisors can facilitate a range of difficult and emotionally-charged conversations with clients.

For the advisor, skilfully combining professional know-how and empathy to establish a connection with the customer leads to more open dialogue and a better understanding of their circumstances. For the customer, an advisor who can explain financial nuances, while tactfully consulting on a spectrum of sensitive topics builds trust and longer term loyalty.

HNW clients do not want to simply sit back and watch their money being managed. They desire to be actively involved in a collaborative process with their wealth advisors, talking through issues – even the more technical ones such as tax optimisation (Figure 1). Where 30% say they fully dedicate this particular area to their advisors, half of our survey’s respondents state that whilst they seek advice from experts, they still want to remain involved.

Figure 1: HNWs seek collaborative relationships with wealth advisors


2. The Teacher

European HNWs are thirsty for knowledge; they want to take advantage of their advisor’s skills and expertise in a bid to improve their own understanding of financial technicalities. The Teacher’s Hat helps advisors take their client on an educational journey.

When learning to manage their wealth, over half of European HNWs over the age of 55 state that their wealth manager is their primary education source; while younger clients prefer less structured education from their advisors, such as discussions with spouses, via school curriculums, formal education programmes, and the financial press or newspapers.

Wearing the ‘Teacher’s Hat’ requires advisors to adapt their delivery depending on their audience and the sources of information preferred by the client.

3. The Architect

The Architect’s Hat helps advisors offer a support structure to clients when planning and building their futures. Every plan is bespoke and its construction is based off the client’s current circumstances as well as future aspirations.

Some planning is encouraged in advance, such as for anticipated life events. Millennials emerge as the organised front-runners in the inheritance planning race, for example, despite being furthest away from retirement. Indeed, as many as 56% say they’ve started setting up their wealth transfer plans – compared to 41% of 35-54 year olds, and 47% of over 55s.

Of course, not all events can be foreseen and HNWs know that there’ll also be factors outside of their control, affecting future wealth creation. Of these, weak economic growth is considered to be the greatest upcoming challenge (37%), followed by low interest rates (21%) and asset protection (15%).

But just like an architect drafts several blueprints accounting for all types of unpredictable events, a wealth manager needs to think outside of the box and anticipate the potential external complications that may affect clients’ future financial situations. In wearing this hat, advisers can ensure they safeguard future wealth plans.

4. The Navigator

The Navigator’s Hat can help advisors understand their increasingly international clientele.

Approximately one in three (35%) European HNWs are looking to relocate to another country in the next five years. This number rises to two in three (66%) among the under 35s suggesting a shift in requirements will undoubtedly follow suite as millennials grow older and set up their lives around the world.

The complexities of a global, fast-paced world mean that wealth managers can no longer rely solely on understanding their own jurisdiction’s tax laws, regulations and upcoming trends. Their knowledge needs to metamorphose and expand to help their most international HNW families feel secure, prepared and equipped with portable and efficient solutions.

5. The Technician

The Technician’s Hat is indisputably critical, especially as HNWs rely on their advisors to achieve higher returns on investments than they could potentially execute themselves.

The most successful advisors are those who have deep levels of expertise on a range of wealth management issues. They possess a firm desire to continue expanding and developing that knowledge so they can consistently be a few steps ahead of their clients, proactively communicating what they feel should be their next move (Figure 2).

Figure 2: HNWs’ reasons for working with wealth managers


Ultimately, clients crave advisors that can adopt a blended kaleidoscopic approach. And staying relevant in an ever-evolving and competitive market requires advisors to play several different roles – with the help of five very specific hats.

Interested in learning more about the essential hats a modern wealth manager must wear? Download OneLife’s latest report, ‘The Many Hats of The Modern Wealth Manager’.

Thought for the week:

“A person carries off the hat. Hats are about emotion. It is all about how it makes you feel.” – Philip Treacy

News from the world of wealth:

Wealth management in 2017: Oh, the Humanity! – CFA Institute Blog

Key considerations for preparing a family legacy plan – WealthManagement

The bitter taste of de-globalisation – V3

Forbes 2017 Billionaires List: Meet the richest people on the planet – Forbes

The only way is up: Demand for Investment Services is Expected to Climb – Private Banker International

LAURA_CAVACIUTI_2016Author: Laura Cavaciuti, Analyst at Scorpio Partnership

Education: Laura holds a Bachelor’s degree in Sociology from the University of Bristol where she also founded the university’s Women in Leadership society.

Role with us: Laura is engaged in qualitative research projects, marketing and market insight projects.

And at the weekends: Laura can be found wandering around the city, trying to get to know London. Her objective: tracking down the best street markets, where she hunts for ingredients to pursue her determined belief that gourmet cooking is in her DNA (after all, she is Italian). However, this has not always proven to be the case.

Cover photo from JFGornet, used under creative commons license.

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