Bloomberg Podcasts · Investing The Great Wealth Transfer: Masters In Business

1. 1. Adam Frank, head of wealth planning at JPMorgan, argues the wealth management industry overemphasizes investment performance relative to benchmarks.
2. 2. Frank says the key question for clients is the purpose of their money, not whether they beat the S&P 500.
3. 3. At Bear Stearns, fee-based revenue grew from 3% to 37% of private client net revenue between 2001 and 2006 under Frank's leadership.
4. 4. During the 2008 financial crisis, Bear Stearns collapsed and was acquired by JPMorgan for $2 per share, a fraction of its former value.
5. 5. Frank emphasizes that diversification is crucial for preserving wealth, even though it didn't protect against losses in 2008 when all assets fell.
6. 6. The shift from accumulating wealth to preserving and spending it is a difficult mindset change, especially for business owners.
7. 7. Tax planning can be more valuable to clients than investment outperformance, as saving on taxes directly increases their wealth.
8. 8. The federal estate tax exemption is $30 million for couples, but many states have much lower thresholds, catching families off guard.
9. 9. JPMorgan has an athlete council with stars like Tom Brady and Sue Bird to advise on financial planning for athletes at all career stages.
10. 10. Frank advises advisors to build relationships with the next generation to prevent assets from leaving when wealth transfers.
11. 11. Inter vivos giving is growing as a trend, with families starting small by making annual exclusion gifts to gradually shift their mindset.
12. 12. Frank stresses that communication and family governance are essential to avoid inheritance disputes and costly litigation.