How does a financial advisor wind up working with a small cadre of ultrahigh net worth individuals? Take the first tiny step.
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For Jack Mullen, a managing director and private wealth advisor at Merrill, that was literally an internship in the mailroom.
“It was not a linear path,” said Mullen, whose career has included stops at Morgan Stanley and UBS. “From there, I worked in a division that primarily focused on 401(k) rollovers. We were working with individuals who had worked at big companies for a long time and were looking for retirement planning, and it was great. I learned a lot, but I knew that’s not really where I wanted to be long term.”
Mullen’s dream was to work with entrepreneurs and business founders, so he found his way into private wealth and banking. For the last 11 years, he’s been a senior leader of the CKWM Group, which as part of Merrill Private Wealth Management has seen its client base double and assets under management triple.
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The group runs what Mullen calls a “virtual family office model,” which brings advisors, estate planning attorneys, certified public accountants and other professionals together to offer high-touch services to ultrahigh net worth families.
“We tell our clients on day one, ‘We are in the stay-rich business, not the get-rich business,'” Mullen said. “They create a lot of wealth creating these amazing companies, and our job is to quarterback the financial decisions they’re making, make sure they’re making the right decisions along the way.”
And that’s not always easy for clients whose lives have diverged from the mainstream of even other fairly wealthy investors. Mullen sat down with Financial Planning to discuss those challenges, how he built his niche and the advice he’d give others looking to do the same.
This conversation has been lightly edited for clarity and length.
Financial Planning: Ultrahigh net worth clients are a goal for many advisors. How do you find new clients in this niche?
Jack Mullen: It’s evolved over time.
When it started, it was cold everything — cold email, cold-calling, cold outreach — and that’s how the first few clients came in. I was calling on liquidity events and M&A around the country, and finding new opportunities that way. I showered these clients with love and did a really good job for them. And then one by one, it built.
My partners and I all built our practice the same way. I was fortunate enough to join an established brand. They built something amazing before I got here, so I had something to sell. And I’ve learned everything you can possibly learn from my business partners. They’ve been amazing to me.
It’s thankfully not any of that anymore. Today it’s referrals, it’s word of mouth. It’s doing a really good job of covering your clients, and they introduce you to their friends. And thankfully, clients have been really good about introducing us to new opportunities.
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FP: What kind of challenges do the clients in this niche pose?
JM: I would answer this two different ways.
First, typically when we’re engaging with a client, it’s right around a big monetization event — a client sold a company. Truthfully, it doesn’t matter if you sold for $5 million or several hundred million dollars, clients are met with an enormous amount of fear. That sounds bizarre, right? But someone who just made out a nine-figure exit doesn’t know what they can afford to spend.
There’s not many people who go through this, but it’s definitely a bizarre feeling to come into. So what we do is we give our clients a plan — financial planning is the core of what we do. We give them confidence in what they’re doing, and we’re building a plan that’s sustainable, that’s going to work through economic cycles, and ideally, it puts them in a situation where they never have to dip into principal.
The second thing happens a little bit later on. Someone who has been wealthy for a long time, who has kids, needs legacy planning. I’m not talking about typical planning. We put together unique trusts and estate structures for our clients. But how do you raise kids that are going to go out and contribute to society? How are you not going to let money interfere with ambitions? Because it can certainly do that.
What we bring is perspective to these families. We can tell them exactly what other families have done that’s worked well, what hasn’t worked well and what’s gone wrong. We can invite them into the office, have them come in and ask really probing questions about who’s going to be involved in the business and who isn’t. Probably the coolest part about my job is those meetings, inviting the whole family and having an open floor to talk about exactly how this family is going to go about some of the big issues they’re facing and guiding them through that.
FP: What are some of the challenges that these clients have that make them stand out from other clients you might have or that fall outside of the UHNW niche?
JM: If you sold an enormous business, that’s a great financial outcome for you and your family, and hopefully for generations to come. But you can’t exactly talk to everyone about that, right? Things like, “Hey, we’re going to be flying private to Aspen and taking our kids there,” and go to someone else and maybe not feel judged in that. There’s not that many people you can go to to talk about really unique things like that.
What we bring is actually a community aspect to that. We oftentimes will get our clients together to have these open conversations: “Hey, we’re going to put our kids on a jet to fly from Miami to Aspen, would you want to share the plane?” Things like that, in a nonjudgmental way. When you’re in that tax bracket, it’s not a huge bucket of people, so we’re bringing thoughtful advice and thoughtful ways that other families are handling situations like that.
These are some issues that we’ve had. One of your kids is going to join the family company. The other isn’t. Should they be compensated differently through their trust? There’s a variety of different ways to go about that. But you have to have that deep relationship with your client. That’s an important part of our practice, spending a lot of time with our clients. If you’re not in your client’s kitchen, breaking bread, talking through these issues with them often, you’re not going to get to the point where you are even allowed to be a part of that conversation.
FP: The amount of time you must need to spend on these clients is greater than for clients with less-complicated planning needs, I’d imagine. Can you tell me about what that’s like?
JM: Yes, but we’re really intentional about who we bring into our practice. We have one of the best ratios of wealth management professional to client. There’s 14 professionals on the team, and we have 125 families that we work with. That’s a number that we pay a lot of close attention to, and it’s important because we can’t do what we are doing for 1,000 families or even 500 families.
So we’ve been very methodical and thoughtful about who we bring into our practice and who we are offering our services to, because you’re absolutely right that we do spend a lot of time with our families. And this isn’t a broad offering. This is very bespoke and white glove for the families that we serve.
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FP: If someone came to you and asked how to build a successful niche, whether it’s one like yours or anything else, what would you tell them?
JM: So first, I didn’t do it alone. I work with my current partners, who’ve been together for 11 years. They had already built something really amazing before I got here. I joined an established practice and obviously leveraged that to go out and attract new clients.
But I think for someone in their first year into wealth management, or maybe even considering wealth management, it’s very intentional from day one to think about who your target market is, who your audience is, because you can’t be all things to all people. It’s finding out who you are, who you think your message is going to resonate with, who do you think is going to be attracted to what you’re offering? Target specifically that market.
Partner with other advisors in the office and get a different perspective — people who have been doing this longer than you. I know I certainly did that. I worked with a lot of different advisors, even before joining private wealth and trying to get different perspectives in different ways of doing things. You learn through osmosis. Just being around other successful advisors, you’re going to learn different ways of doing things, different perspectives, how other successful people handle things, and then [they] eventually will come to you.
There’s not one path that’s going to work. It’s not just networking or just calling or just relying on CEOs, but if you’re doing all of those things in tandem, you’re going to find success.
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