A NEW APPROACH TO OFFERING
WEALTH MANAGEMENT SERVICES

Since the wealth management concept was invented, there have been many changes in the way it has been offered.

When accountants and lawyers entered the arena, they initially partnered with brokerage and insurance firms, offering products for commissions often under exclusive relationships. It wasn't long before these advisers changed their emphasis from making transactions to providing counsel on a variety of financial matters.

We believe that accountants and lawyers should offer wealth management services using a model that is very ethical, safe and profitable. What we are about to present is one description of a model that is comfortable to offer, simple to execute and desired by your clients. This model offers the benefits to you of providing such services without the undue risks, upfront costs, exclusive alliances or excessive time to administer.

Here is a brief description of the new model:

• Adviser identifies a client or prospect interested in exploring wealth management.

• A financial plan governing the protection, building and distribution of wealth is then drafted by the client in conjunction with the adviser.

• The adviser and client then determine the list of priorities and the professionals to be chosen to implement the plan.

• The client and lead adviser meet periodically with the other advisers to review the progress of completing the plan, to discuss new ideas and to change the plan and/or participants, as needed.

• The adviser is paid by the client either on an hourly basis, a percentage of the assets under management or a percentage of the client's net worth.

Reasons this model has merit:

• It is fee-based. The adviser receives no transaction or commission fees. This makes a clear distinction between the adviser and transaction-based brokers.

• There is no exclusive relationship. The adviser remains totally objective and free from any perceived influences. This allows the adviser to make independent, objective judgments in selecting the most suitable solution for the client's best interests. It also allows the client and adviser to review a variety of options, rather just one specific family of offerings.

• It does not require hiring in-house experts if the adviser's role is limited to planning, researching, monitoring and reporting. This should save money.

• It expands your role as a trusted adviser. It allows you to charge for this value- added service in addition to what you are already receiving. It may also lead to further engagements or trusteeship should you be interested.

• Additional licensure and regulatory issues may be avoided if you refrain from giving investment advice and do not receive compensation from the service providers. You should verify this with the appropriate regulatory authorities. The further you go beyond the planning and oversight roles we recommend, the greater chance you will need to be registered.

The benefits to your client can be substantial:

• Increases their chances of becoming financially secure. By creating a financial plan and having you, their trusted adviser, lead the effort, your clients will have a better chance of achieving their financial goals.

• Saves them time and money. Our model recommends that all advisers meet periodically with your client at least annually to review the plan and the progress of its implementation. Such a structured approach can save time by eliminating the duplication of effort and save money by reducing possible errors, taxes and missed opportunities.

• Client has more free time. One of the benefits of having wealth is the freedom from having to constantly worry about it. This suggested model has the power to relieve clients of having to constantly do these chores themselves.

The benefits to Advisers are also substantial:

• Keeps old clients. The more services you provide to your clients the greater chance you have of retaining them.

• Attracts new clients. This service can differentiate you and your firm from your competitors.

• Adds revenue. It is possible to multiply the amount of revenue you can earn, especially if you charge your fee as a percentage of the assets under management.

• Keeps competitors away. If you are not fully serving your clients, other financial service providers might be able to do it. These competitors now include Merrill Lynch, Citicorp, American Express, MONY, private banks, other CPAs and attorneys.

• Allows you to meet with your best clients more frequently. This allows you to get to know them better, meet other key people in their lives and provide more services.

These services should be offered to only those clients that can pay you adequately for your experience and judgment. The opportunity for you to get into this highly desirable business is knocking loudly. This new model erases many of the negatives connected with previous programs. It allows you to remain totally on the side of your client as an independent and objective adviser.

August 2004