PRIVATE WEALTH

John J . Bowen Jr .

Legacy planning services represent a major way to attract and serve the ultra-wealthy .

E ALL KNOW A BIG TREND IN THE FINANCIAL advisory world today is moving upmarket and serving the fast-growing universe of increasingly wealthy clients . Chances are , that ’ s one of your key goals if you ’ re reading this .

But when it comes to moving really upmarket and serving the ultra-wealthy — clients with $ 25 million or more of net worth , excluding their personal residence — advisors tend to get a little nervous . They think they don ’ t have what it takes to effectively work with this rarefied group .

I think those advisors are wrong , and that most of them can climb the wealth ladder and effectively attract , serve and retain the ultra-wealthy . Yes , it requires a concerted effort — but it can take far less time than you might think , if you know what you ’ re doing .

What The Ultra-Wealthy Want

CEG Insights ’ research into the ultra-wealthy reveals their key concerns and expectations when it comes to working with financial advisors . Consider just a few of the findings :

57.1 %

Extremely Important

How important is it for financial advisors , accountants , attorneys and other professionals to communicate with one another to help a client ’ s financial situation ?

23.2 %

Somewhat Important

8.7 %

Neither Important Nor Unimportant

N = 165 Investors . Source : © 2023 CEG Insights . All rights reserved .

0.4 %

Somewhat Unimportant

10.6 %

Not At All Important

1 . The ultra-wealthy want to collaborate with you . These clients aren ’ t going to fully delegate wealth management decisions to you . Overall , 82.1 % want to be actively involved in day-to-day investment management . Among ultra-wealthy millennials — who make up more than 40 % of this cohort , by the way — this desire is nearly universal ( 94.8 % want it ). What ’ s more , 79 % of ultra-wealthy investors overall say that they enjoy investing and do not want to give it up . To serve the ultra-wealthy , you need to be prepared to work with them and solicit their opinions , not simply tell them what to do based on your views .

2 . They want their financial lives coordinated . Given their sizable net worth , it ’ s not surprising that ultra-wealthy investors work with a diverse range of professional advisors — most commonly accountants , RIAs , full-service brokers , attorneys and others . The use of multiple advisors obviously dilutes the proportion of assets with any one firm . For example , ultra-wealthy investors working with a single advisor place an average of 85 % of their assets with that advisor ; they manage the remaining assets themselves . When investors work with two firms , however , the primary firm manages an average of 65.6 % of their assets and the secondary firm one quarter of the assets .

Despite the “ advisor diversification ,” our research indicates that the ultra-wealthy

SEPTEMBER 2024 | FINANCIAL ADVISOR MAGAZINE | 27