Family Wealth Report interviewed Marcelino Pendas, a Miami-based senior director and portfolio manager at BNY Mellon International Wealth Management, about working with Latin American clients.

Family Wealth Report recently explored some of the factors that make Latin America a unique wealth management market, including why more players are setting up shop in Miami. This article can be viewed here.

Roughly how much business at BNY Mellon Wealth Management comes from working with LatAm clients?  Has this change at all in recent years? 

We don’t disclose numbers but we can say it’s a sizeable percentage of our international wealth business. Business volume has been strong and commensurate with regional growth. In fact, to meet rising demand, in the past few years we established an international wealth management hub in Miami in part to serve the increasing number of clients from LatAm.

Within Latin America, which countries present the most compelling opportunities for business? 

There are a number of countries that we believe present good opportunities; those that are stable economically and present business potential. We also see more Latin American clients strengthening their roots in South Florida and New York.

What specific skills do advisors need when working with wealthy LatAm clients?

Latin American clients typically have complex planning needs, which require a broad and global suite of sophisticated capabilities that their advisors can deploy.  For example, a client who is a non-US resident from Peru, who has two children in the US and one in Europe, will have several legal and taxation requirements that vary from country to country. A good advisor must have access to colleagues who are experts and who can work with a client’s lawyers and accountants to address these needs.

Another example: Let’s say a client wants to move to the US. Our wealth strategists are very familiar with the steps the client needs to take and the associated financial implications on their broader financial picture before making that move. As an advisor we know to pull in that strategist to work with the client and his or her advisors to make sure this transition is done effectively.

In terms of personal qualities in an advisor, number one is to be a good listener and to ask the right questions. It’s also important that you are well-rounded and able to discuss a range of issues such as the current global economic environment, changing regulations and tax implications of investing in the US.

An advisor also needs to understand that structuring an estate plan is greatly affected by where that client resides. For example, some plans that may work for a client in Mexico may not be appropriate for a client in Brazil. You have to be familiar with different jurisdictional conditions to be able to serve a client appropriately.

What are the main challenges associated with serving this client segment?

The main challenges relate to the geographic nature and availability of clients. Given their wealth, they tend to have multiple homes, business commitments, they tend to frequently travel, and will have a strong focus on privacy and security. The combination of those factors makes it important for advisors to be able to access the clients from both a time availability and a location perspective.

How would you described the typical LatAm investor mindset and how might this compare to, say, a typical US investor? What are the main cultural nuances?

LatAm investors tend to be more global in thinking compared with US clients. Often because their companies are global and geopolitical events can have more immediate impact on their businesses. Also they often have children and family members in different countries around the world, so they pay closer attention to political and economic developments that could affect their family. They tend to be more conscious about political or economic instability and its impact on their wealth. Sometimes that can be a factor in a client’s desire to invest in the US. This further highlights why a LatAm client needs to work with advisors and firms that have really robust global capabilities.

Would you say that developments in the global regulatory/tax environment have impacted how BNY Mellon/the industry more broadly deals with LatAm clients? 

Regulation and tax laws are constantly evolving, and advisors need to continually keep LatAm clients informed about developments that can affect their wealth planning.  This is a fact of life for any international client, of course, but no less so for clients from Latin America.