A recent article in The Boston Globe described a situation in which some wealthy clients have turned to law firms for wealth management and financial advise. Some may see this as competition for Investment Managers, but I don’t buy it. Read on to see why…

---

Should Law Firms be seen as a Friend or Foe to Investment Managers?

According to a recent The Boston Globe article, “…a growing number of wealthy New Englanders are having their investments managed by law firms instead of traditional brokers or financial institutions.” The article goes on to state there is a level of distrust of some very large Financial Services institutions and that while no official stats exist, across a number of law firms, the assets under management total over $6 billion.

In some cases, it will make sense for a client to utilize a law firm for limited aspects of their wealth management. However, what law firms cannot provide are the differentiated offerings of investment managers which would prevent law firms from ever really capturing a large share of high net worth clients. Offerings such as sophisticated asset allocation models, wealth forecasting and multi-generational inheritance strategies take many years of experience and significant technology investment to create and maintain.

Since the core competencies of a law firm is not to invest in such experience and technology, I believe that the Investment Management industry should continue to partner with law firms for a good source of high net worth client referrals.