Establish insurance standards for the management of heritage offices

 Establish insurance standards for the management of heritage offices
 

 
"If you've seen a wealth management office, you've seen a wealth management office." This is a statement that rings true for members of a wealth management office or its partners. Each family is unique, and the services provided by a wealth management office are generally tailored to the specific needs of each family.

Tax and asset management reports, day-to-day monitoring of asset acquisition, risk management information, financial and legal advice are some of the main services that are offered by a wealth management office. Another important service that many wealth management offices provide to family members is an established set of insurance standards that provide a clear governance framework to support decision making.

Research Analysis Offers Perspectives

Some wealth management offices research data to establish insurance standards for family members. Marsh Personal Services in the United States conducted an in-depth benchmarking study of wealth management offices in 2018 that identified trends and concerns related to personal insurance programs at wealth management offices. The results show that 56% of large wealth management offices use insurance standards to implement their overall risk management program. These standards are established and customized by the wealth management offices together with families to set clear expectations for the management of the insurance program. They are then recorded in a clear and concise summary that is usually given to family members, wealth management office staff and the insurance broker.

Family standards often include the following clauses:

All family members must take out liability insurance for an established minimum amount.
All homes must be protected against damage from surface water.
All homes valued above a stated value must be covered by insurance with an established deductible.
All family members should have minimum protection covering works of art and jewelry.
All family members should obtain estimates before submitting a property damage claim.
Involving family members builds commitment

The insurance program standards established for the group allow family members to vote on minimum requirements and are a simple way to educate new family members about the insurance program. As an example, suppose a family wants to set up different levels of supplemental liability insurance based on assets, net worth, and future earnings. In this case, the first generation will carry liability insurance for at least $ 50 million, the second generation at least $ 25 million, and the third generation at $ 15 million. Insurance can also be taken out if the family considers it important that every household is protected against equipment breakage and surface water damage. From these standards, families can create uniqueness and consistency, while maximizing value.

Establishing minimum standards is a good starting point for giving the insurance program a structure and a framework. This strategy helps ensure that the family or families under your care have confidence in the approach taken to preserve the family heritage for generations to come.

 

This document and any recommendations, analysis data or advice offered by Marsh (collectively, the "Marsh Analysis") do not constitute advice about a personal situation and should not be used as a basis for such advice. The information contained herein is based on sources we believe to be reliable, but we make no representations or warranties as to its accuracy. Marsh has no obligation to update Marsh's analysis and assumes no liability to you or any third party arising out of this post and any matter referred to herein. Statements regarding actuarial, tax, accounting or legal matters are based solely on our experience as insurance brokers and loss prevention consultants and should not be construed as such advice,