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Wealth Planning: Financial Advisory Is Evolving
Managing one’s wealth is not always solely a financial problem, but often requires an
intervention capable of resolving a series of personal or family, business, and fiscal issues. A wealth specialist is a professional capable of assisting the entire family unit, and not just the
individual, with their entire wealth, from an increasingly transgenerational perspective. This is
the challenge a private banker will need to face to evolve from offering financial advisory
services to comprehensive wealth advisory.
Will Business Cards Automatically Be Replaced with the New Title “Wealth Specialist”?
In light of the impacts of MiFID II and technological evolution, there are critical elements to this
challenge, especially in client perception. It should be highlighted that the role of the private banker has already changed over the last 10 years, moving from a model focused on financial advisory in a strict sense (i.e., portfolio management consistent with specific objectives) to a model that positions the private banker as a “pivotal” interlocutor, able to be the point of
reference for expressing needs and constraints, ultimately becoming a true ambassador to the
professionals the client needs.
A Transition Worthy of a “Desert Crossing“
The evolution from financial advisory to wealth advisory is not easy, and indeed it has
represented a demanding transition for some advisors who have moved in this direction. This is
because it required and still requires a significant investment of time and money to achieve
adequate training (also depending on the affiliated companies and age), as well as an
indispensable and effective internal organization of their office (teamwork among colleagues,
secretariat, junior assistants) that frees up valuable time to dedicate to high-margin revenue
activities aimed at finding tailored solutions for the wealth issues of HNW clients, and
connecting with external partners such as accountants, lawyers, notaries, etc.
This “desert crossing” has also had other effects: distances are growing between advisors who
look ahead and equip themselves for the new role, and those who are slowed down in their
journey. Furthermore, making the path towards becoming a “wealth specialist” even more
arduous, but also inevitable, has been the advent of technological innovation, fintech,
robo-advisory (call it what you will), but the new challenge for the future will also be to contend
with artificial intelligence.
The (Wealth) Advisor of the Future
At this point, therefore, the emotional intelligence of the advisor, equipped to grasp even the
deepest needs related to clients’ entire family wealth, will be the element that makes the
difference. The best advisors will make a difference because they will be able to provide
personalized, suitable, and flexible solutions that an algorithm or a program could never
elaborate: these are soft skills fortunately belonging to the human world.
For example, in proposing a solution for wealth protection and planning, the trust represents
one of the legal instruments useful for protecting assets or rights, to be allocated to one
or more beneficiaries, capable of crafting a truly unique “tailor-made suit.” The most significant effect is that of asset segregation, usually dear to entrepreneurs and
professionals. However, debunking the myth of it being a costly structure, the use of trusts is
increasingly materializing both in the protection of vulnerable individuals (see “After Us” Law)
and in succession planning (in the latter case, forms of income or capital disbursement to
beneficiaries can be hypothesized over long time horizons, difficult to achieve through other
instruments). In cases of donor concerns or hesitations about prematurely divesting their assets,
effective solutions such as a testamentary trust or a dormant trust exist.
Financial Advisory and Jurisprudence
Doctrine and jurisprudence have extensively dealt with a particular form of trust, the
self-declared trust, which involves the coincidence between trustee and settlor (donor). This
specific case has often been subject to challenges by the financial administration, even to the
point of threatening the nullity of the constitutive act. With judgment of 26.10.2016,
no. 21614 the Court of Cassation again addressed this matter, and it appears particularly relevant as it
sanctions its legitimacy and establishes new principles that revise previous jurisprudential and
financial administration guidelines. The judgment establishes, with reference to the taxation due,
that proportional taxes for transfers of goods and rights do not apply to the self-declared trust,
but rather fixed taxes.
Financial Advisory and Tax Authorities
The affirmation of this principle is particularly relevant in both fiscal and civil law fields, as it
explicitly contradicts a series of robust jurisprudential interpretations, some of which had even
denied the legitimacy of the self-declared trust itself. In all probability, this jurisprudence
unfavorable to the institution was motivated by specific concrete cases where the trust had been
resorted to perhaps too nonchalantly: consider the case of a heavily indebted individual who
tries to shield their assets from creditors through dispositive acts in favor of a trust of which they
themselves might have been the trustee, with the consequent possible revocatory actions and in
certain cases of nullity that resulted. This last example confirms the importance of teamwork
among professionals: solutions often arise from open discussion, accompanying clients and
their family units in organically, not partially, analyzing their wealth needs in good time.
The objective of wealth advisory is therefore to optimize choices from all points of view, to make
decisions and not to postpone them. If you agree with this vision, please contact me. If you agree with this vision, contact me.
Wealth Planning: Financial Advisory Is Evolving
Managing one’s wealth is not always solely a financial problem, but often requires an
intervention capable of resolving a series of personal or family, business, and fiscal issues. A wealth specialist is a professional capable of assisting the entire family unit, and not just the
individual, with their entire wealth, from an increasingly transgenerational perspective. This is
the challenge a private banker will need to face to evolve from offering financial advisory
services to comprehensive wealth advisory.
Will Business Cards Automatically Be Replaced with the New Title “Wealth Specialist”?
In light of the impacts of MiFID II and technological evolution, there are critical elements to this
challenge, especially in client perception. It should be highlighted that the role of the private banker has already changed over the last 10 years, moving from a model focused on financial advisory in a strict sense (i.e., portfolio management consistent with specific objectives) to a model that positions the private banker as a “pivotal” interlocutor, able to be the point of
reference for expressing needs and constraints, ultimately becoming a true ambassador to the
professionals the client needs.
A Transition Worthy of a “Desert Crossing“
The evolution from financial advisory to wealth advisory is not easy, and indeed it has
represented a demanding transition for some advisors who have moved in this direction. This is
because it required and still requires a significant investment of time and money to achieve
adequate training (also depending on the affiliated companies and age), as well as an
indispensable and effective internal organization of their office (teamwork among colleagues,
secretariat, junior assistants) that frees up valuable time to dedicate to high-margin revenue
activities aimed at finding tailored solutions for the wealth issues of HNW clients, and
connecting with external partners such as accountants, lawyers, notaries, etc.
This “desert crossing” has also had other effects: distances are growing between advisors who
look ahead and equip themselves for the new role, and those who are slowed down in their
journey. Furthermore, making the path towards becoming a “wealth specialist” even more
arduous, but also inevitable, has been the advent of technological innovation, fintech,
robo-advisory (call it what you will), but the new challenge for the future will also be to contend
with artificial intelligence.
The (Wealth) Advisor of the Future
At this point, therefore, the emotional intelligence of the advisor, equipped to grasp even the
deepest needs related to clients’ entire family wealth, will be the element that makes the
difference. The best advisors will make a difference because they will be able to provide
personalized, suitable, and flexible solutions that an algorithm or a program could never
elaborate: these are soft skills fortunately belonging to the human world.
For example, in proposing a solution for wealth protection and planning, the trust represents
one of the legal instruments useful for protecting assets or rights, to be allocated to one
or more beneficiaries, capable of crafting a truly unique “tailor-made suit.” The most significant effect is that of asset segregation, usually dear to entrepreneurs and
professionals. However, debunking the myth of it being a costly structure, the use of trusts is
increasingly materializing both in the protection of vulnerable individuals (see “After Us” Law)
and in succession planning (in the latter case, forms of income or capital disbursement to
beneficiaries can be hypothesized over long time horizons, difficult to achieve through other
instruments). In cases of donor concerns or hesitations about prematurely divesting their assets,
effective solutions such as a testamentary trust or a dormant trust exist.
Financial Advisory and Jurisprudence
Doctrine and jurisprudence have extensively dealt with a particular form of trust, the
self-declared trust, which involves the coincidence between trustee and settlor (donor). This
specific case has often been subject to challenges by the financial administration, even to the
point of threatening the nullity of the constitutive act. With judgment of 26.10.2016,
no. 21614 the Court of Cassation again addressed this matter, and it appears particularly relevant as it
sanctions its legitimacy and establishes new principles that revise previous jurisprudential and
financial administration guidelines. The judgment establishes, with reference to the taxation due,
that proportional taxes for transfers of goods and rights do not apply to the self-declared trust,
but rather fixed taxes.
Financial Advisory and Tax Authorities
The affirmation of this principle is particularly relevant in both fiscal and civil law fields, as it
explicitly contradicts a series of robust jurisprudential interpretations, some of which had even
denied the legitimacy of the self-declared trust itself. In all probability, this jurisprudence
unfavorable to the institution was motivated by specific concrete cases where the trust had been
resorted to perhaps too nonchalantly: consider the case of a heavily indebted individual who
tries to shield their assets from creditors through dispositive acts in favor of a trust of which they
themselves might have been the trustee, with the consequent possible revocatory actions and in
certain cases of nullity that resulted. This last example confirms the importance of teamwork
among professionals: solutions often arise from open discussion, accompanying clients and
their family units in organically, not partially, analyzing their wealth needs in good time.
The objective of wealth advisory is therefore to optimize choices from all points of view, to make
decisions and not to postpone them. If you agree with this vision, please contact me. If you agree with this vision, contact me.
