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One version of this article was first published in the CNBC with Robert Frank in the Wealth Newsletter, which is a weekly guide for high network investors and the user. Sign up To get a future edition, straight in your inbox.
A leading consulting group of the Wealth Management Industry has launched a list of a crowd of wealth, which is expected to reduce the confusion and marketing hype.
The Ultra High Networth Institute, a non -profit that focuses on improving services for wealthy families and investors, has recently unveiled its “The Goodsus” – which is a list of more than 80 terms commonly used in the wealth management business. The list, which will be permanently updated and extended based on the input of wealthy investors and advisers, aims to explain the new language of wealth management and create accepted standards for communication with clients.
“There are a lot of garbage terms, many marketing terms have been thrown away,” said Jim Grub Mann, founder of content and curriculum chair and family Wealth Consulting at the Ultra High Network Worth Institute. “Many of these motivations are to fight some of the BS in the field.”
A reliable wealth is the need for Wikipedia after the explosion of tricks, false labels and misleading hype in the business of handling the rich.
According to Seroli Associates, in 2024, households worth 5 million or more controlled an estimated $ 49 trillion financial wealth, which is more than half of the country. In the upper part of the ladder, assets are increasing rapidly, competition for highly wealthy investors and family offices has increased in private banks, wire houses, registered investment advisers, private equity firms and boutiques. With this development, a fried brand language barrage has come.
The terms such as “Family Office Services,” Holistic Advances “and” Assets under Advice “are used blindly, making it more difficult for clients to visit the undisputed industry for non -financial experts.
One of the most invasive violations is the “Multi Family Office”. Traditionally, a multi -family office is a single family office that has been extended to serve a small number of outside families or family members. Today, dozens of RIAs, boutique managers and even major consulting firms call themselves multi -faceted offices, which eliminate provocation and basipic services through a real family office.
“Some industry observers believe that the term has no foundation and should never be used.” “Most professionals only acknowledge that the term has received a growing identity in the last thirty years, even if there is insufficient authenticity or consistency in its use.”
In order to comply with the definition of the Theracesis, the multi -family offices require four specific attributes, some from some customers (at least 10 complicated, multi -faceted families at least $ 30 million) specific services, service supply (no dispute in interest disputes and experience).
Another controversial term is “assets under advice”. Firms often toss around the terms of the assets so that they should manage the amount of clients. Look Some firms use “AUM) under assets, while others say” assets under advice “and others” tout under the administration under the administration (AUADMIN). ” The clients rarely know the difference.
The Thermores gives the most specific definitions of each, which focuses on the assets that serve as firms that act as a fiduciary (another debated term). It says clients should especially ask the administrators of the wealth of how they break the assets under the administration and how to break the assets under advice.
According to Welzus, “some firms also include the AUM's calculation, which makes it clear that they are doing so, while other AUMs and the AUA report separately.” “If these quantities are being evaluated to solve this problem, the firms should be asked to tell how to calculate their AUA.”
Grubman said the idea of wealth began with an unexpected issue at the Ultra High Network Worth Institute. The institute was founded in 2019 by Steve Prostano, a long -standing consultation with wealthy families and private business owners, who found that clients need neutral help in understanding and visiting the industry. The institute, which counts dozens of wealth firms, consulting firms and leaders on its boards, also aims to promote the best methods and standards in the industry.
Two years ago, the Institute started developing in recent years, looking at the cleaning changes in the industry, called the Integrated Family Wealth Management Initiative and how it could serve the clients better. The group's debates gave rise to a problem: they often could not agree on some words.
Grubman said, “We will use a term and someone will say 'Um, actually I think this is.' “And someone else will say 'I remember it was praised 15 years ago.” It was amazing that the differences between the people, even the words like the Family Enterprise. “
The Institute's Library Manager, Grubman and Tara Kehoo began to compile internal dictionary and crowds with group members. Over time, the list increased and they decided to create a public version to help the clients and firms.
They considered it to be called Wheelpadia, but this name was taken so they arrived at the welfare and added a dinosaur Shubnkar. Grubman said the Institute welcomes the recommended terms and definitions of other wealth management experts and clients in hopes of increasing its use. Keho said engagement has been high – new users have spent more than seven minutes on an average of seven minutes on the recently launching site.
“They are clicking from the term to the term and is really using the resources,” Keho said.
The site does not want to be a comprehensive leader for all the conditions for wealth management. There is no description of the property planning world, or flip or scans, or investment in SMAS and PPVAs, or several other products that rotate the heads of wealthy investors. Grubman said the institute did not want to include products or conditions that investors could easily find on the web. For the terms of this type of product, the Website includes links to several online investment leaders, including Charles Schwab Investing Dictionary and Investopidia and SEC Dictionary.
“We searched for the conditions that were important in the field, or where other definitions were very high,” Grubman said. For example, walking through the definition of assets under consultation on the SEC website is a nightmare. So we wanted to create this for clients. “
Since the business of advising wealthy families rapidly reduces industries – from confidence and property planners to accountants, real estate advisors, donor advisers, aviation and fleet specialists, and even to doctors and other experts – there can be a bridge between wealth.
Even the wealth has a definite term for the “Ultra High Network”, which is used with very little context in the luxury and banking world.
The most common definition of “high -pure value” is a client with a million $ 5 million and $ 30 million, says Wahthsurus. “Ultra high net worth” usually means 30 million or more. However, he warned that “with a significant expansion of inflation and global wealth since 2000, more firms have been considering the modern UHNW level to 100 million.”
