An article in yesterday’s Wall Street Journal examined the new client service model being used by financial firms—what Jim Cahn, CIO of Wealth Enhancement Group in Plymouth, MN refers to as a “roundtable approach.”
The article argues that many high earners have financial planning and lifestyle needs that can’t be met by any one adviser. Some financial firms are addressing this issue by organizing their advisers, support staff, and outside consultants into strategic teams, giving clients the benefit of working with a broad range of experts.
This reminded me of a post that I wrote in 2012 on the benefit of using a comprehensive settlement planning firm vs. a structure broker in the context of personal injury/workers’ compensation settlements. I suggested thinking of it in terms of a family office—affluent families rarely just rely on a financial advisor. They may also want to talk to tax analysts, CPAs, portfolio/investment managers, wealth planners, trust officers, and legal advisors.
Here are some of the differences between using a structure broker vs. a settlement planning firm:
Structured settlement broker
- IF the plaintiff wants a structured settlement, the structured settlement broker can:
- Participate in the mediation process
- Determine ongoing medical costs that the injured party will need covered
- Negotiate the payment schedule and makes the arrangements for the payout
- Note: If on the defense side, the broker has no obligation to act in the best interests of the plaintiff
The structured settlement broker provides a valuable service, much like a financial adviser provides a valuable service to someone who wants to invest their money. There are limits to that expertise, though, and the plaintiff would likely have to look elsewhere for additional advice.
On the other hand, a settlement planning firm typically has at least one structured settlement broker on staff, but also offers a range of other services. Here are some of the key experts you may find at a settlement planning firm:
Settlement planning firm
- Structured settlement broker(s)
- Trust experts (interview trustees and trust companies, assist client in establishing the trust)
- Government benefits experts (facilitate Medicare Set-Asides; identify strategies for protecting government benefits such as Medicaid/SSI)
- Wealth management experts (offer investment advice; assist in establishment and monitoring of investments)
Individuals who want the best service should seek out firms who offer diverse areas of expertise. The firms who assemble teams to meet their clients’ needs aren’t doing it because it’s the most lucrative approach to business—because the business is shared, it’s not necessarily the right format for a sole practitioner who wants their own book of business. Instead, the companies who employ this approach are those that seek to provide the best, most comprehensive customer service.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).