What UHNW Families Really Want From Their Advisors: A Conversation With Mel Lagomasino

Rosemary Denney: Welcome to the Wealth Marketing Podcast, where we explore the latest trends, challenges, and opportunities shaping the financial industry today. In each episode, we bring you insightful conversations with industry leaders sharing practical, actionable strategies to help advisors deepen relationships and meet growth goals. I hope you enjoy. Hello everyone, and welcome to a special edition of the Wealth Marketing Podcast. Recently, I had the privilege of interviewing Mel Lagomasino, CEO and managing partner of WE Family Offices and a true trailblazer in serving ultra-high-net-worth families. In our interview, we talk about what inspired her to be part of the founding of the Ultra High Net Worth Institute. Hope you enjoy this conversation as much as I did. All right, Mel. You have spent decades watching the wealth management industry evolve from largely product-driven towards a more client- and family-driven model. What do you think has fundamentally changed, and what do you think has not changed enough? Mel Lagomasino: I don't think it has fundamentally changed. I think most of the wealth management industry is still driven by product sales or by AUM fees. And so you still have, I think, a situation where there's an end game to the advice, whether it's getting AUM or it's selling products. And so I still think that while there's a little bit of a change, and I definitely think the rise of the RIA industry is an improvement over the traditional financial services model, there's still a long way to go. Rosemary Denney: How do you think an organization like the Ultra High Net Worth Institute factors into this sort of evolution and the change that needs to happen? Mel Lagomasino: Well, if we can step back, I think that the first thing to think about is that the institute is ultra-high-net-worth. So if we can have the conversation, make sure we're just focused on the ultra-high-net-worth, because I do think that that is a very different segment of families than just high-net-worth families. And I think that has to do with the fact that if it's an ultra-high-net-worth family, then the most likely outcome is that the wealth is not going to be consumed by the generation that is in charge now, and therefore, you have to plan multi-generationally, and that is a totally different exercise. And that's actually what gives rise to the institute, is that when you think about these families and when you're advising these families, you really have to have a very long-term view of how do you make sure that this financial success that the families have created will be sustainable over time and will actually be successfully transitioned into the next generation, and maybe the one after that. So it's a totally different headset, and that's why I think the institute actually, as we came together to create it, we said, “Where is the place that we can really start creating a professional capacity-building group around serving these families?” Which is very different from dealing with just high-net-worth families. And most companies out there that are working with these families really have an overwhelming amount of clients in just the regular high-net-worth space, which is fine, but there's not enough attention and expertise really driven into that ultra-high-net-worth space, which is a whole different space. Rosemary Denney: Can you tell me, from your decades and decades of working with ultra-high-net-worth families, what are the families looking for versus what they're finding in the marketplace? Mel Lagomasino: I think the families are asking for people that they can trust, that have the professional chops in terms of whether it's investments or planning or taxes or whatever, but actually can step back and not have any agenda in terms of the advice. If you have a product at the end of your advice, that's not trustworthy. If you're trying to get AUM because that's the way you collect your fees, that's not trustworthy. So I think that when you think about these families, they're looking for people who can advise them without any conflict or any end game as to what their answer is. And I think that's very difficult to find because I think that the way that most business models work for people in this space basically does have an agenda. And that's why you see a single family office. Why is a single family office put together? Because the families want somebody who's working for them, who doesn't have an agenda, who actually is able to advise them around all these incredibly complex financial decisions. All these families have lots of moving parts, and all of these decisions have to be taken into account with everything else that the family has. And therefore, I think it's very difficult to find people that you can trust that have absolutely no agenda. You either build it yourself, and you pay for those families in a single family office, or you try to hire people in some sort of a multifamily office setting that have no agenda in terms of what the answer is to whatever you're asking for in advice. I think they're still looking for that. I think that it's hard to find, and I think that actually the LLMs are helping with that. Rosemary Denney: The Ultra High Net Worth Institute has been working to define integrated wealth management as a distinct profession and to create a common framework across these disciplines. Why do you think that industry-wide effort is necessary, rather than leaving individual firms up to themselves to develop their own approaches? Mel Lagomasino: I think it's a totally different profession. I think most people grow up in the verticals. They grow up as investment people or tax people or planning people or governance people, et cetera, and that's where you get your first grounding. But I think to help these families, it really takes the ability to step one level above that and be a generalist in all the areas, but really be a specialist in figuring out how to help the families, how to really understand what they need, and then how do you apply all of this knowledge that you have around this to try to support them. So I think it's a different profession, and I think it's important that we learn it's a team, and by the way, it's a team sport. Because you're gonna need people who are more specialized in one of these verticals or another to get together around the family to be able to solve for the family. It's not a star system. It's not a one-trick pony. It's a total team sport. Rosemary Denney: Over decades, you've helped to build firms, develop advisors. What role do you think the institute can play in developing the next generation of advisors? Not just technically capable people and professionals, but people with the judgment and the curiosity and the emotional intelligence to advise complex families. Mel Lagomasino: Well, let's take them separately, right? I think the emotional intelligence, judgment, ability to connect with the families, empathy, you've either got that or you don't. I don't think that can be taught. I think by the time you come to the profession, you either have that or you don't. When I select people for our business, it's one of the things that I really look at. They either have it or they don't have it. So that you can't train. But what you can train, and I do think the role of the institute, is to actually help these people learn from case studies, by setting standards, by showing them new tools. I mean, technology is completely changing the game, and I think it'll be really interesting to see the role that the institute can play in terms of helping us understand how technology can help us be better advisors. And really speaking for us, because I really think we need a voice for our profession as we talk to different providers that can really help us be better advisors. Rosemary Denney: At WE, you have emphasized that the advisor's job is not to demonstrate how smart the advisor is, but to help the family become more confident and capable as an owner of wealth. How does this philosophy connect to the Ultra High Net Worth Institute's mission around family learning, preparation, and integrated advice? Mel Lagomasino: Yeah, that's completely connected, right? Our role is to help the clients feel confident, feel in control, make better decisions, and stay in control of their wealth. Because again, I think that there's a big multi-generational narrative here. If the client is not making decisions, he will start to lose competence, because how do we all learn? We learn from the decisions we make and whether or not they worked out or didn't work out. So if you abdicate that responsibility, if you give control over that to somebody else, you're gonna stop learning, and that is a disaster with these families. So the idea is keep them in control, keep building capacity at their level so that they can continue to make decisions. And by the way, they're gonna get, like the LLMs, they're gonna get smarter with every decision they make and see whether it went well, it didn't go well. Why yes, why not? They're learning. And then into that learning process, be able to bring in the next generation of leaders that are going to be able to continue learning and continue making good decisions. So it's totally connected to what we're trying to do in the institute. It's not about us. It's how do we enable the families to make great decisions, not only with the existing generation, but with the following generations, to make sure that this success that they have and this wealth that they've created can go from one generation to the next. Rosemary Denney: And then being able to train the next generation of advisors to think in that way, right? Mel Lagomasino: The same thing. It's the same. It actually mirrors, you know? It's not only the next generation of the families, but it's the next generation of advisors. And one of the best ways to do that is with case studies, and working together, and looking at all these brilliant people that actually have been fantastic advisors, whether they're attorneys or they're investment people or they're tax people, and be able to share all of that with the people that are in this profession. Help us all get smarter. I mean, every time I read something from the Ultra High Net Worth Institute, I learn something new that I didn't think about before. Or I sort of knew it before, but I didn't look at it quite that way. So I think this profession is a constantly evolving, constantly learning kind of situation. I think just like any real profession, whether it's medicine or law or— Rosemary Denney: Do you feel that experienced firms like WE and professionals like you have a responsibility to participate in organizations like the Ultra High Net Worth Institute in order to raise up that next generation of advisors? Mel Lagomasino: Absolutely. Absolutely. I think we have a responsibility because we're basically building a new profession. And it takes a village, and we need to be able to get all of these different professionals around the table to share best practices, to share case studies, to help us continue to build the profession. And so yes, I think we have a huge responsibility, and that's why we founded it. It was a big gap. Rosemary Denney: In one sentence, what makes the Ultra High Net Worth Institute different from any other professional organization? Mel Lagomasino: I think two things. One, that it's completely focused on the ultra-high-net-worth, and two, that it's all volunteers. It's all of us volunteering to be able to make this a real profession, a recognizable profession, a respectable profession, et cetera, and have a home for people like us. So it's all volunteers, and I think that's a really big deal. This is a labor of love. Rosemary Denney: Why did you choose to align yourself with the institute? In the very, very beginning, at its founding, what did you find so interesting about it, and why did you choose to participate in its founding? Mel Lagomasino: Well, there was a bunch of us that had been in the business for a long time, and we could feel that there was a gap. And we'd have meetings. Somebody would sponsor a conference, and we'd all get together. We'd be on panels together, et cetera. And the idea really arose: why don't we have an organization? Instead of doing this tactically, sort of periodically when somebody else is putting together a conference and we're sharing these ideas, why don't we get together and form an organization that's like a think tank and helps us all pool together all the knowledge and the history that we have, and help us all, not just us become better, but build the next generation of advisors and build the profession and give it the kind of standards, et cetera, that will make it a real bona fide profession. Rosemary Denney: What is the most significant benefit the Ultra High Net Worth Institute provides to its members, in your opinion? Mel Lagomasino: That they have a home where they can learn more about their profession. Look, Jay Hughes, who I'm sure everybody that would listen to this interview knows and who's a leading light, one time told me a story where we were having lunch together, and he said to me, “You know, Mel, you're a black duck.” And I said, “What do you mean I'm a black duck?” And he said, “Well, remember the story of the ugly duckling?” He said, “You're different. You're a little black duck with all the other little white ducks in the pond. You don't really fit the traditional definition.” The thing is that, as time passed, what happened was you grew up to be a swan, and we are all swans, and that's the story. The Ultra High Net Worth Institute is the home for swans. We're different than the people that are in all these organizations trying to sell product to clients, trying to figure out, “Okay, how do I get the highest compensation?” We're people that really believe that we can make a difference serving these families and giving them the best possible advice. Rosemary Denney: Well said. I do think it's really interesting how one of the founding principles at WE 13 years ago was to keep your clients involved, part of the process, to empower them to make amazing decisions for their lives. And that was really different back then. That was pretty profound messaging in the industry. And now look what's happened. Thirteen years later, it's trickled down to form an organization like the institute. Mel Lagomasino: Yeah. We've been saying the same thing for 15 years. Rosemary Denney: I know. I know. Mel Lagomasino: Patience. Rosemary Denney: All right, Mel. Well, thank you very much for taking the time. Mel Lagomasino: Anytime. Take care.