Why did UMB decide to launch a Family Wealth offering?
We officially entered the family office space because we saw an opportunity to address several needs for both current clients and new prospects. We were already providing 70% to 80% of these services in Private Wealth Management, so we decided it was time to formalize the area and put some additional structure around the offering, including a dedicated team.
UMB Family Wealth delivers entrepreneurial investment strategies, sophisticated tax planning and generational wealth guidance to help families unite, grow and thrive. We are currently working with a strong base of clients and focused on intentional growth moving forward.
Where are you seeing opportunity with this offering?
Opportunity truly exists across our entire footprint. We have a significant number of current Private Wealth Management clients who we believe could benefit from this offering. That said, we are talking with them individually to share the opportunity as this is not an automatic transition, but rather a customized option for each to consider.
How does the investing approach differ for Family Wealth clients?
We are seeing a major shift for clients who fall into this category—they want more than just stocks and bonds. These clients tend to have more investment dollars at their disposal, which creates opportunity to pursue different types of investments. Families with significant capital and longer time horizons tend to prefer a large portion of their portfolio be allocated to private equity, direct investments and other alternatives. As such, we are extremely mindful and focused on providing these types of entrepreneurial and opportunistic investments to the families we work with.
How are you approaching these preferences?
To ensure we could provide the desired investment mix and flexibility for our clients, we opted for a registered investment advisor (RIA) structure. The biggest advantage the RIA structure allows us is additional flexibility in terms of how we approach private equity and direct investing.
How does the factor-based approach work?
Factor-based investing is the process of choosing securities based on specific attributes that aid in risk management and total portfolio construction. It’s focused on asset allocation versus stock picking. Factor-based investing can enhance diversification, generate above-market returns and manage risk.
This allows us to build more diversified portfolios for those who have more assets to invest, a certain risk tolerance, and the appropriate time horizon. While different than what we do in our traditional Private Wealth Management area, the approaches complement each other. Our RIA structure can aid our factor-based approach, but it is not always needed when we evaluate factor-based investing.
How has the model changed during the last few years?
There is a mindset shift and overall evolution occurring in the industry where the focus is now on a personal plan, rather than on investment returns. The portfolio is no longer the center of everything—planning is.
This has been an extremely positive and welcome change. This approach allows us to build more diversified portfolios, as well as put clients more at ease, since a plan accounts for both negative and positive market reactions over the lifetime.
Securities offered through UMB Family Wealth are:
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE
Interested in learning more about our UMB’s Family Wealth division? See what we mean when we say, Wealth with impact™.