Summary
- High-net-worth individuals and families are those who have liquid, investable assets of at least $1 million and usually have unique wealth management needs.
- You may be looking for a wealth management firm that offers both breadth and depth of services. This may include custom investment portfolios, tax planning, financial planning, insurance and risk mitigation, estate and intergenerational planning, trust services, and more.
- Unbiased can connect you to a financial advisor to answer all your questions about wealth management.
What is high-net-worth wealth management?
High-net-worth wealth management is specialized, comprehensive wealth management services for individuals with investable assets of $1 million or more. It may involve complex investments, tax planning, intergenerational wealth planning, trust services, insurance, estate planning, and more. You see higher stakes, but greater opportunities.
The expectation for high-net-worth wealth management is higher, with a deeper level of expertise and personalization required to serve clients. There’s also a higher degree of integration and customization among the branches of wealth planning for high-net-worth individuals.
What are the benefits of using a high-net-worth wealth management firm?
With higher stakes and greater opportunities, high-net-worth individuals see the following key benefits by working with a high-net-worth wealth management firm.
Holistic financial planning
High-net-worth families need integrated, holistic financial planning to ensure each piece of the financial plan is working together for their current lifestyle and long-term goals. Investments are coordinated with tax planning, estate planning, cash needs, and risk. An integrated approach can uncover opportunities to improve performance, optimize tax and investment opportunities, and align financial decisions with values.
Advanced tax optimization
Tax planning works best when integrated with other aspects of your financial life. The structure should support long-term wealth preservation and be implemented year-round.
Customized investment portfolios
Investments such as private equity, hedge funds, and alternative investments tend to be more complex and need careful monitoring. Some high-net-worth wealth management firms have access to investments that other firms don’t.
Estate and legacy planning support
A high-net-worth firm can help you plan for passing on wealth. It can structure and implement estate planning strategies to pass on wealth most efficiently. It might advise you on trusts, annual gifting, donor-advised funds, charitable foundations, wills, healthcare, and more.
Personalized services
High net worth wealth management often comes with a large degree of dedicated, personalized service. Your point of contact may be the same person who knows you, your goals, and your financial plan.
What’s the difference between high-net-worth firms, advisors, and family offices?
You have choices when it comes to managing your wealth. This is a breakdown of some of the main differences between high-net-worth firms, advisors, and family offices.
High-net-worth firms | Financial advisors | Family offices | |
|---|---|---|---|
Control | Hand over control to advisors within the firm. | May be able to hand over control to a financial advisor or maintain control and make investment moves yourself. | Complete control over investments in-house managed by an advisor you hire. |
Cost | High. Typically charge an AUM fee. | May charge an AUM fee, which will likely be similar to a high-net-worth firm, or work as a fee-only advisor | Very high. Payroll and expenses often exceed $1 million per year. |
Services | Comprehensive | Will likely need to find other experts for the different facets of your financial picture. | Fully personalized and directed by the family. |
Privacy | Information should be kept private, but may be shared with other experts within the office with your permission. | Information should be kept private, but is held at a firm outside your control. | Complete privacy since your information isn’t sent to an outside firm. |
Expertise | A firm may have a number of experts to help assist in your wealth management. | A financial advisor may have expertise in several areas, but can also recommend services from other professionals. | A family office can employ the experts they need most and outsource the others. |
Investment management | Personalized investment strategy to meet your goals; both public and private investments; access to alternative investments. | The portfolio typically follows standard recommendations. | Highly personalized investment portfolio construction and management. |
Business owner services | Succession planning, exit strategies, retirement planning, and coordination of personal and business lives. | Will likely need to look for these services from other experts. | Fully coordinated personal and business life. |
What should you look for when choosing a high-net-worth wealth management firm?
What should you look for when choosing a high-net-worth wealth management firm? Deep expertise, transparency, experience, and integration might be at the top of your list.
Experience with complex wealth management and intergenerational planning
High-net-worth individuals need a multifaceted approach to managing complex finances. They may have highly concentrated stock positions, business interests, tax issues, private investments, intergenerational wealth needs, and more.
You might want to look for advisors who offer services for trust funds, liquidity events, exit planning, retirement planning, business succession, and other complex wealth management issues you need for your unique situation.
Fiduciary standard and transparency
Look for a wealth management firm that’s required to be held to a fiduciary standard and act in your best interests. Especially at a higher wealth level, you don’t want to get locked into an investment that earns your advisor excessive commissions.
Your wealth management firm should be independently owned and not associated with specific investment products or funds. This way, the firm can make recommendations based on your interests alone.
You’re also looking for transparency with fees. Know what you’re paying your wealth management firm and how it compares with the industry average.
Tax and estate planning services
If you want better preservation of your wealth, you may want to look at tax and estate planning services. A tax professional can save you money now and give advice that can ensure more of your money goes to your heirs instead of to taxes. Likewise, estate planning can also help you move your wealth to better legal structures for a more efficient wealth transfer.
Coordination and integrated services
The different facets of your wealth management team must work together. Taxes, investing, estate planning, and many other facets of wealth go hand in hand. Coordination of all the different teams is a job in itself.
Reputation
A firm’s reputation demonstrates its ability to serve other individuals with similar wealth profiles. It’s a great sign if they have great performance, client retention, and high-quality services. Being able to trust your financial advisor will put your mind at ease.
Bottom line
Wherever you are in the process of choosing a wealth management firm, professional financial advice can help. Financial advisors can answer questions and fill in the gaps where you need help the most. Unbiased can connect you to an advisor today.