PRIVATE WEALTH
needs more capabilities , whether it ’ s offering alternatives , or estate or tax planning , or options strategies for closely held positions , or bond strategies .”
Orvieto said Dakota manages all of its assets in house with proprietary strategies , giving its advisors a “ pretty nice list they can choose from across the board .” In addition , the firm is continuing to add new skills and niches , acquiring firms when it needs to add capabilities .
“ One office has a specialty in 401 ( k ) s and one has a specialty in clients with options in California , different kinds of niches ,” he said . “ And as we get bigger and bigger , a lot of those niches get pulled out to our other offices and become stronger .”
Steward Partners brought on its own broker-dealer a few years ago , and with
that hired a CIO and head of product , Gonyo said . “ For our clients to be able to go direct and have those customized solutions , it ’ s critical . It ’ s something you have to do .”
Like the other firms , Steward uses acquisitions to fill gaps , and sometimes in unexpected ways .
“ This past year we acquired a firm very strategically [ with ] over $ 20 million in revenue and $ 3 billion in assets ,” he said . “ But what was interesting about that is the average age of the advisor was somewhere between 38 and 42 .”
Lending Lends A Hand
Volkonitskaya said lending is increasingly part of the service package these firms need to be able to offer to very wealthy clients , and a lot of advisors who are joining firms are bringing portfolios of various kinds of lending with them , not just portfolios of assets .
“ I would say all come with lending ,” Gonyo said . “ The advisors that we ’ re recruiting are typically in the top 20 % of the market , and the lending piece is really important .”
Steward , he said , has a planning solutions group with lawyers , accountants and a technical coordinator who work alongside advisors when servicing clients . The team recently helped onboard a client with $ 160 million to whom lending was important .
Cresset also has an internal team that works with outside banking and lending providers , Rogozinski said . The team tracks more than 400 public and private financial institutions to help clients with whatever kind of lending they need , including personal loans , mortgage restructurings and small business loans of up to $ 50 million . “ That team really focuses on
“ As we get bigger and bigger , a lot of those niches get pulled out to our other offices and become stronger .”
— Brett Orvieto Dakota Wealth Management
families that are in the ultra-high-networth space , because there ’ s not a lot of value you can add with a $ 500,000 mortgage , but there ’ s a lot of value you can add with a $ 20 million mortgage ,” he said .
Orvieto said Dakota also deals with lending , but in a different way , and not just because the firm ’ s typical client has between $ 2 million and $ 15 million in AUM . Dakota ’ s advisors are often trying to help their clients scale back on the lending they already have , he said .
“ When they come to us , they often come from a place that wasn ’ t treating them very well . Why do they have five lines of credit ? The answer is because the [ previous advisory ] got paid to sell credit ,” he said . “ In a lot of cases , we ’ ve had people with more debt than they needed , and we simplify .”
Estate And Gift Tax Reset
In 2024 , ultra-wealthy clients are also interested in lifetime estate and gift tax exemptions . Individuals are currently al- lowed to gift as much as $ 13.61 million without facing estate or gift taxes on that amount ( the number is $ 27 million for couples ). But those big exemptions are expected to sunset on January 1 , 2026 , and revert to the previous amount of $ 7 million for individuals ( and $ 14 million for couples ).
“ This has been a call to action for our advisors to reach out to their clients ,” Orvieto said , adding that the ultra-wealthy can be notoriously slow at turning over important documents . “ It ’ s one of the things that people drag their feet on . I have a list of five or six clients that I call and tell them to get a will . And then on the next call I tell them to get a will .”
The urgency is coming from the estate planning attorneys he works with . And to make the urgency stick with clients , he says he brings up the dreaded topic of surge pricing .
“ If you come to me in 2024 , I ’ ll be able to treat you nice and all will be good . But if you come to me in September 2025 , you ’ re going to pay four , five , six times because we ’ re going to be having extra people working on it because everyone wants to do it at the same time ,” he said . “ You want to be ahead of the game . You want to be there now getting your solution before it ’ s mass panic as everyone wakes up and tries to solve for it .”
Gonyo agreed there ’ s no reason to wait , saying that nothing ’ s going to be done in time if advisors talk to their clients about it in October 2025 . “ Not only would we get surge pricing and a rush job which will lead to errors , but there ’ s a good chance it just wouldn ’ t be done in time .”
Still A People Business
Regardless of the breadth or depth of services these elite firms are offering , the most important effort a firm can make is to attract and keep advisors with stellar people skills who are the right fit , the panelists agreed .
“ All the other kinds of bells and whistles and things like that are great , but if your client doesn ’ t like to talk to your advisor , then none of that matters ,” Orvieto said .
48 | FINANCIAL ADVISOR MAGAZINE | JULY / AUGUST 2024 WWW . FA-MAG . COM