Are you ready to attract and retain high-net-worth (HNW) investors? With the growing number of ultra-wealthy individuals, the potential for financial advisors to accelerate the growth of their firms has never been greater. Understanding the unique needs and preferences of this exclusive client base is crucial for success. Let’s explore effective strategies to position your firm as the go-to choice for discerning HNW investors.
Understanding HNW Investors
For the purposes of this discussion, we’ll define HNW investors as individuals with at least $5 million in liquid financial assets—that is, cash on hand or assets that can be readily converted to cash. Ultra-HNW investors, a subset of this group, possess more than $25 million in liquid financial assets.
According to research from the Spectrem Group, as reported by The Advisor Coach, HNW investors share several common traits.
• The majority (94 percent) are college graduates, with an average age of 65.
• A significant portion (63 percent) are retired.
• When it comes to financial advice, 28 percent of HNW investors work with advisors for specific needs such as retirement planning, while 16 percent rely on advisors for all their investment needs.
HNW clients have distinct needs that set them apart from other investors. They typically require sophisticated investment management expertise that looks to incorporate alternative investments, structured products, and separately managed accounts to help achieve complex goals. Additionally, HNW investors frequently look for expanded services, like estate planning and philanthropic planning, preferring a “one-stop” relationship that can address multiple, holistic aspects of their financial lives.
So how do you attract and retain HNW investors? The key lies in a targeted approach that emphasizes relationship building, tailored solutions, and exceptional service. By implementing the following strategies, you can position yourself as the go-to advisor for this elite group.
1. Identify your target clients. And then, lean into your existing network! Referrals, an important part of any advisor’s growth strategy, may play an even greater role in winning HNW clients. Your existing client base and other strategic partnerships and centers of influence (COIs), such as attorneys and CPAs, are ideal contacts to reach out to. 2. Share your story. Once you get referrals, position your value-add, including what makes you the best choice for them. Gail Simons, CFP®, of The Highbridge Financial Group, starts the conversation by sharing why she chose the field and what she hopes to help her clients accomplish. Simons asks aspirational yet targeted questions and positions herself as the “go-to person” and “an indispensable source of advice.” Advisors likely know more about their clients than almost anyone but the clients’ doctors, so it’s vital to create that kind of rapport. 3. Present tailored solutions. Be ready to discuss the network of wealth management professionals you collaborate with, including estate planners, CPAs, life coaches, mortgage brokers, and contractors. And be prepared for other planning concerns, such as around business transitions and how to be fair and equitable to clients’ heirs. 4. Close the deal. Many HNW investors seem to prioritize value over cost, so focus on demonstrating the long-term benefits and personalized services you offer rather than just the price.
Nurturing High-Value Relationships
Once you’ve secured HNW clients, the focus should shift to deepening these relationships. Ongoing communication, personalized attention, and showing a clear understanding of their financial goals are essential to maintaining their trust and loyalty.
Adam Spiegelman, CFP®, Spiegelman Wealth Management, calls clients regularly and meets face-to-face at least once per year. He maintains regular communication through a weekly newsletter, arranges client lunches or dinners, and occasionally hosts open houses. He also adds a personal touch when acknowledging special occasions—like the time he sent a client’s son an OSU Beavers bottle opener for his college graduation. This thoughtful gesture sparked a conversation with the clients that led to a fruitful financial planning session.
Unlocking Your Growth Potential
The HNW landscape is booming, presenting a golden opportunity for savvy financial advisors. By mastering the art of serving these elite investors, firms can unlock unprecedented growth potential. Those who effectively attract and retain HNW investors won’t just safeguard their own success, they will also help shape financial legacies that resonate for decades to come.
This post originally appeared on Insights, a blog authored by subject-matter experts at Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.
