For Carla C. Wigen, President of Trust Services at LNW, effective wealth management is built on conversations that matter, not just numbers. That means keeping the dialogue open with clients and their families at all times, so their evolving needs and aspirations are what drive financial plans and strategies – instead of the other way around. To her work, Carla brings more than two decades of wealth management experience and insights. We sat down with Carla to talk about what it means to serve clients really well.
Carla, how has the general composition of personal wealth changed in the 21st century?
Carla: Just as the U.S. economy has changed dramatically in the past 20 years, so have the components of personal wealth. There tends to be more variety in the sources of wealth but also more concentration. People might have most of their net worth tied up in the business they own, or real estate, or stock options, or intellectual property. Each situation requires different strategies in using those assets to accomplish what the owners want.
Also, more people now own assets in multiple states and even outside the U.S. So you have to navigate the different tax laws and regulations on income, asset sales and estates. Finally, I think there is greater interest now in impact investing and philanthropy.
How can families succeed in sustaining multigenerational wealth?
Carla: There are many different types of structures that can be put in place for the benefit of current and future generations. We can work with LLCs (Limited Liability Companies) to transfer wealth. Or we can also accomplish multiple goals using a trust, given the big variety in trust structures.
The challenge is knowing what would work best given the assets, goals, values and personalities unique to each family. You can structurally arrange to transfer wealth, but it won’t work if the foundation is not in place for that to actually happen. By foundation, I mean taking fully into account what the family values, what its goals are, the different personalities, and the dynamics among family members.
LNW has a long history as advisor to families over many generations. So there is a lot of institutional knowledge here about what works well (and not so well) in particular situations.
Most important as we strategize about multigenerational wealth is communication and advising the younger generations so that they are financially responsible. This is another thing we work on and strategize about. Having a young person as a co-trustee, for example, is one approach that might work well for a particular family.
How can younger high-net-worth individuals or families get started on building multigenerational wealth?
Carla: Many younger professionals in their 30s and 40s, especially those who have had some early success, are now in their prime earning years. My advice to them would be to step back and allow yourself some time to think longer term: What big plans do you have for the future? How do you want to share the wealth you are building with your family? How much is enough, and what happens when you get there?
The other thing is to see your assets in their entirety, including even your own skills and abilities, and put a plan in place that has built-in diversification, risk management, and the structures and strategies you need to fund your various goals. It is tempting – and easy — to think that you are keeping all your options open by not committing to any planning. But in fact the opposite is true.
Without wealth planning, you are more likely to veer toward whatever your personal financial biases may be. Perhaps you’re overspending and will look back with regret. Or maybe you’re being too conservative. Having a wealth plan in place lets you use all the tools available to calibrate your financial situation in context of what you value and want to do. Even if your goals change, the result is more options and fewer regrets later in life.
What questions would you want clients to ask a wealth management firm?
Carla: There are certain basic things clients should always ask: How are my advisors paid and do they receive incentives to recommend some financial products over others? Is the firm a fiduciary, required by law to give advice that is in the client’s best interest? What is the total fee charged and what does this include?
Beyond that, clients should feel very comfortable asking any and all questions about their assets, finances and portfolios. It is these questions that open up conversations and allow us to provide clients with peace of mind, which I think is the ultimate goal of wealth management.
Why did you join LNW?
Carla: It is one of the rare, fully integrated wealth management firms in the country that understands how families operate and what families need. LNW has been managing trusts and investments for high-net-worth and ultra-high-net-worth families since 1967. We bring together integrated teams of in-house experts to work on every aspect of our clients’ finances and align that work with clients’ needs, goals and aspirations. I believe this is not all that common in our industry and there is great value in that for our clients.
Even before I joined LNW, I had known, worked with, and been impressed by many of the people at LNW for years. For example, Kristi Mathisen [LNW Managing Director of Tax and Financial Planning]; her depth of knowledge is astounding.
Creating wealth usually comes from a single-minded pursuit, but managing wealth requires widespread expertise. It is quite difficult to excel at all the different aspects of managing wealth and also integrate them. I think LNW does that.
Finally, and most importantly for me, LNW clients. They are exceptional and dynamic in different ways so helping them achieve what is important to them is both interesting and fulfilling. It is a partnership that gets stronger over time. Wherever they are, they know they can reach out to us for help on matters big and small.
How does your background shape your views on wealth management?
Carla: To this day, I remember how my father, a soybean farmer in Ripley, Tennessee responded when I was a child and said something like “Oh that person is so weird.” He said: “Everyone is weird in their own way, including YOU.” What I’ve taken away from that is that not every idea or financial strategy is best for every person. Each individual has their own ideas of how they want to use their resources. The key is working through what it is that people really desire in regard to their wealth and helping put together the strategy that will best help them get there.
In my earlier years, I was a serious softball player, and that’s when I first learned about the dynamics of teamwork and succeeding as a team. More recently, I’ve experienced the rewards of discipline and focus while training for and running ultra-marathons. Not only do I get such joy from being on the trails, but trail running has taught me to keep things in perspective and think long term.
How has the wealth management industry changed since you started your career?
Carla: Thanks to technology, we are able to update clients often and in detail about how their wealth plan is performing, how sustainable their spending is, how on track they are to fund all their goals within ranges of probability. The same with risk management; we can run simulations that show how portfolios are likely to perform in all sorts of market scenarios. There are also many more investment options for high-net-worth clients, especially in the private markets and alternative assets. And the opportunities are global.
What hasn’t changed? The need for strategic investing and planning that is based on each client’s unique combination of assets and aspirations.
How do you enjoy most about working at LNW?
Carla: As a CPA, I have an obvious love of numbers, but what really gives me energy is conversations with people and being part of a team. The great thing about working at LNW is that there’s a great deal of teamwork, and the teamwork is collegial. This allows for open exploration and sometimes tough conservations, where expert opinions might be at odds. But this is how we arrive at solutions for clients that work really well over time, not just temporary fixes that might have to be undone, perhaps at great cost.
What is your work goal at LNW?
Carla: One thing really: I want LNW to be top-of-mind for anyone with significant wealth. I’m excited to be part of the great work LNW continues to do for clients and their families as their lives evolve. I want as many people as possible to experience that and to have those key conversations with us about their life and aspirations, which form the basis of our work.
