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Where Do The Affluent Go For Wealth Advice?

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The wealthy and the affluent live a lavish lifestyle and have more than enough savings to live comfortably. Things such as saving for their child’s college tuition or saving for a retirement fund may not be a cause of concern for them. However, they face their own unique set of challenges and complexities that cannot be solved with regular financial planning. They require expert financial advice from a different kind of financial advisor known as wealth managers.

Wealth managers are individuals who offer investment advisory services to affluent clients. These advisors combine holistic financial planning with other financial services such as estate planning, tax planning, investment management, legal guidance, retirement planning, and more.

It may not be possible for an individual to cater to all matters of will, estate, taxes, legacy, business, etc. A competent advisor must have expertise in all the aforesaid areas as well as be able to present a holistic view of each. In other words, an affluent person would require someone who is able to handle their daily finances as well as provide expert financial advice and guidance on long-term financial planning. If you are looking for expert financial guidance on how to grow and manage your wealth, consult with a professional wealth advisor who can advise you on the same.

Let us read a little more in detail about what an affluent individual looks for in a wealth advisor:

1. Reasonable fee and remuneration

Though the rich can afford expensive services, it would not be untrue to state that they'd also prefer individuals that offer them the best service an advisor can offer at a reasonable rate. For that reason, selling costly company ideas and schemes may turn HNWIs away.

2. Building a trustworthy relationship

How financial advisors engage with their affluent clients plays a crucial role in how long their services would be employed. The wealthy would like their wealth advisor to be committed to them in every sense. The advisors need to establish a successful personal relationship based on mutual trust. According to a recent report on wealth, those with more than $10 million in investable liquid assets placed a higher value on customer service than historical success. Affluent clients are more likely to sign with wealth managers and management businesses that show them importance and place them above general preference, according to the study.

3. Make investments based on the risk appetite of the client

Contrary to popular belief, not every wealthy individual is a risk-taker. Only 20% of the affluent class are willing to take little risks in order to boost their growth. 80% of the rich clients want their managers to demonstrate the investment process, and 78% want proof that the advice meets their risk profile. The affluent understandably want to know that their money is safe in the hands of financial advisors.

Wealth advisors who are rash and risk-takers may not be preferred by the wealthy. Rather, advisors who sit with their clients, understand their needs and risk preferences in detail would have a significant advantage over others.


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4. Providing accurate and timely data

Many affluent individuals like to stay up to date with the markets and current political happenings. Thus,they are on the lookout for accurate market data. In fact, according to a recent study, 38% of affluent people surveyed said they rely on wealth advisors' content quality. In light of the same, the HNWIs may like to engage with individuals that can give them up-to-date and valid information regularly. That isn't to say that affluent clients expect their wealth advisors to keep them updated on everything. But when it comes to 'need-to-know' information, a worthy professional wealth advisor will keep their clients well-informed.

5. Always on the hunt for new opportunities

The rich are constantly looking for updated technology, integrated communication tools, and good information from their advisor. In fact, they'd prefer to be the first few to have access to new investment vehicles, opportunities, and more before it hits the market.

6. Proven track record of working with large sums of money

This one should come as no surprise. Every client would want to know the competence of the advisor they engage with. The affluent may not trust advisors who have little to no experience with millions of their dollars. A proven track record and performance goes a long way towards building trust with the client. 

Why are professional wealth advisors gaining traction?

The world of investing is complex and constantly changing. Without expertise, the financial planning of any individual can get derailed. It gets more complicated if you hold enormous wealth and have no proper knowledge on issues like taxes, estate planning, wills, trusts, and more. While wealth management firms offer a wide range of services, they also have unique advantages. And hence, their services are becoming increasingly popular, particularly among the affluent.

Firstly, professional wealth services are holistic. It encompasses nearly all areas of an individual's wealth. As a result, the individual need not consider different consultants for various services.

Secondly, these advisors work in accordance with the client's specific objectives. The advisor must be aware of the client's expectations. For example, after retirement, you may want to travel across the world or may want to save for your children to study abroad. In such instances, the advisor will determine how much should be invested today depending on the amount of time left and the costs that will be incurred, thus allowing the client to be well prepared in advance. 

Why is traditional investment advice not enough for affluent investors?

Affluent investors are frequently intertwined within a larger and more complex investment and financial planning world. Furthermore, because the bulk of these investors are already retired, advisors must rethink how they serve them. In such scenarios, traditional investment advice may not be enough or quite relevant for them. A good advisor must look beyond traditional planning to stay relevant.

An advisor should be seen as someone who's reliable as well as someone who can offer complete guidance on most pertinent matters of finance. Also, the advisor should keep himself updated on the latest developments happening in and around retirement planning, stocks, estate, taxes, and more. He must also keep an eye on the ever-changing rules and regulations of the Internal Revenue Service or IRS.

Moreover, inflation, market volatility, rising healthcare expenses, and longevity risk create a need for professional guidance and planning. Also, dynamic situations may involve advisors to abandon the traditional investment rules. For example, family disputes, debt, businesses, etc., may require the advisor to think above and beyond. 

What is the best way to find a wealth advisor?

Accessing your financial needs and personal wealth can help you determine which professional wealth advisor, i.e., an assessment of your financial status can help you choose between a private wealth advisor and a financial advisor. In such circumstances, you may need to reassess your needs, financial goals, and other nuances to pick the most appropriate option for you.

There are primarily two options available to you. You can either go for a private wealth advisor or hire an investment firm to take care of your needs. Should you choose to go for an investment firm, it necessitates careful examination of the firm's track record and qualifications. Large institutions may consider having all their wealth and financial planning handled by one agency. Similarly, affluent individuals may want qualified investment advisory firms handling their portfolios. However, if you wish to have a more personal experience, you can hire an independent wealth advisor who will offer a more critical eye and personal touch to you and your needs. 

To conclude

An individual may be worth hundreds of millions, yet may lack expertise in wealth management. The general investment advice or advisor may not prove sufficient for the wealthy and for HNWIs.

Affluent individuals have different needs and hence require expertise that may sometimes be beyond the scope of traditional advisors. When looking for professional wealth advisors, you can go for someone who can assess their risk capacity, work against inflation, analyze business, market, and finally provide holistic and market-relevant financial advice. Ensure that you do exhaustive research before employing the services of a financial advisor.

Use the free advisor match tool to match with an experienced and certified wealth advisor who will be able to guide and advise you effectively on matters of wealth management and to employ strategies on minimizing your taxability, securing your estate, and boosting your retirement corpus. Give us basic details about yourself, and the free match service will connect you with 1-3 professional financial fiduciaries that may be suited to help you.


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The blog articles on this website are provided for general educational and informational purposes only, and no content included is intended to be used as financial or legal advice.
A professional financial advisor should be consulted prior to making any investment decisions. Each person's financial situation is unique, and your advisor would be able to provide you with the financial information and advice related to your financial situation.