Is your adviser on your side?

In my book – “When you are Super Rich who can you Trust’ (currently out of print, but a new batch should be in soon) I have a chapter on choosing and reviewing advisers.

There are various types of advisers, maybe you can recognise one or two:

·      The Jargon Bore

This is the sort of person who is up to date with the latest press releases, cases, budget announcements, legislation and all the professional classifications. The Jargon Bore writes long letters full of the latest extracts and quotes, which takes many hours to craft, proves his superiority but contains no practical advice or real understanding of his/her client’s concerns. Most Jargon Bores will not explain what the jargon means, because this would undermine their power. Less confident clients are attracted to Jargon Bores, because they assume they are intellectually superior, but forget that they are the client, paying for long letters of advice which mean nothing to them. My advice to any client is, if you do not understand what you are being told to do and why – don’t do it!

·      The Problem Finder

The Problem Finder is a special sort of adviser. Whereas professionals are paid to identify the risks, the problem finder goes well beyond realistic warnings. They like nothing better to indulge in the ‘what if’.  ‘What if your daughter were to be a surrogate mother?; what if your grandchild were to be cloned?; and what if your son were to be a sperm donor – how would this affect who could inherit?' Clients can forget they are paying their professionals to find solutions not endless problems. Most problems can be resolved with a simple practical solution which costs very little to implement and to operate, but to the Problem Finder a simple solution – does not ‘butter his parsnips’!

·      The Nit Picker

Every professional likes to have pride in his or her work – the lawyer loves good grammar, neat numbering and proper spelling. Taking care over defined terms and the inclusion of an ‘and’ or an ‘or’, or the use of capital letters for a defined term and not a small one is not nit picking, this level of detail can make a fundamental difference to the meaning in a common law document. However, when negotiating a document – the nit-picker takes minutiae to silly extremes. You will find nit-pickers holding up the execution of a document because the indemnity clause is not in their standard form, even though word for word, the indemnity clause in the document they have been given says the same thing. It is not uncommon for deals to fall apart because of a nit-picker, losing the client many hundreds of thousands of pounds.

·      The Jack of all Trades

Does the professional have any experience in the specialist area being considered? I am a common law trust specialist, so when I was asked to enfranchise our block, as a layman, I knew enough to steer the tenants in the right direction, but refused to take on the work professionally since I would be dangerous on the details. The professional world is now so complex that the Jack of all Trades, will make mistakes. I have seen numerous examples when clients have decided to save the costs of the specialist for a cheaper Jack of all Trades, only to find themselves embroiled in years of litigation trying to unpick the mess their preferred Jack made!

·      The ‘Default Position’ Professional

There are some things that can be changed and some things which cannot – wisdom is knowing the difference. Many professionals prefer a ‘quiet life’, unless a solution is tried and tested and recommended by their ruling professional body, they will not consider it. They tell their client, ‘times have changed, you have to accept it’, ‘it is the way of the world’, ‘this is the way we have always done it’ or ‘we don’t do that sort of thing’. The Default position Professional is not always to blame, in many organisations professionals are prohibited from thinking out of the box – looking out for the best interests of the client, because of ‘compliance’. So often clients are missing out on opportunities to escape from danger or save hundreds of thousands of pounds, because they have an adviser who is banned from thinking what is in the best interests of their client - they must first think what will make the most money for themselves and their organisation.

Billionaires are in no different position to anyone else; they, like so many other UHNWIs, cannot tell if their adviser is sound or simple. They are not trust specialists so need to find someone who is. Never before has this need been greater – the strategy of out of sight and out of mind relied on by many for decades is over thanks to the introduction of CRS.

At GFOS we make available to our clients our years of expertise and knowledge of dealing with trust structures of billionaires around the globe. Our trust review does not just extend to the ownership structure, but how it is worded, administered and managed. This gives us – and you - valuable insights into whether you are working with an adviser who is sound or simple, or simply needs to be set in the right direction.

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Caroline’s Book ‘Who can you trust when you are Super Rich?’ can be preordered from Svetlana  and her book ‘Winning Business from Private Clients’ can be bought direct from the website.