Steve Gresham Financial Industry Author

It is the focus on risk, not the potential for investment rewards, that wealthy individual investors are most concerned about, according to Stephen Gresham, speaking today in London to an audience of international financial services industry executives attending the second annual meeting of the international Money Management Institute.

“Get ready for a change in what’s going on in the world, because the management of risk is what will draw people to financial advice,” said Mr. Gresham, a founding member of the organization that was developed as an extension of the Money Management Institute in Washington.

Mr. Gresham kicked off the two-day conference by emphasizing the need to focus on the clients and not to get too caught up in products and services.

Using demographics from the United States as an example, he cited the four greatest vulnerabilities of wealthy individuals: legal action; retirement and healthcare expenses; property loss or damage; and estate taxes.

“Most people are risk oriented, not return oriented,” he said, challenging what is often considered traditional thinking in the investment advice industry.

“The fact is, people in the high-net-worth world have more stuff and they are therefore subject to more challenges and responsibilities to protect it,” he added.

Mr. Gresham drove his point home to the eclectic audience of executives from at least a dozen countries by citing the findings of a survey of wealthy clients and their respective financial advisers.

The fear of losing their wealth was a major concern to 87% of clients, but only 14% of their advisers considered it a major client concern.

Estate taxes were also more important to clients than their advisers had perceived, with 49% of clients ranking it as a high concern and just 8% of advisers.

The threat of being sued was posted by 47% of clients and just 8% of advisers.

One category where both advisers and clients were on the same page, according to the research, was when it came to the importance of have adequate medical insurance. That topic was ranked highly by 77% of clients and 79% of their advisers.

“The message here is get a better overall risk and return profile for the life of your client,” he said.

“That takes developing a balance sheet approach so there is much more attention paid to the elimination of risk.”

Research Magazine >>
Unconventional Wisdom
by Ellen Uzelac

"Quick. What’s the chief quality of top advisors to the affluent? Skill? Ability? Style? It’s probably not what you think.

Following a two-year research-based “random walk” around the financial advice industry, “Advisor For Life” author Steve Gresham concludes that the most successful advisors share a single distinguishing characteristic: consistency.

“It’s the exact same story that’s true of success in every other profession, including sports. It’s not about ability. It’s about the consistency of that ability. It’s about the consistency of the result,” says Gresham , 46. “It’s Fed Ex arriving by 10:30 anywhere in the world on a more predictable basis than everybody else. If you can’t put it together on a consistent basis, it doesn’t happen.” ... More >>