The wealthy in the U.S. have been riding a steadily and swiftly rising star. While the high-net-worth segment of the population–usually defined as those having $1 million or more in liquid assets–is growing at a faster rate than the overall population, the number of those in the ultra-high-net-worth market–with more than $5 million in liquid assets–is growing even more rapidly. According to a report issued in 2006 by the Spectrem Group consulting firm, the UHNW segment has nearly doubled in size over the past three years to about 930,000 families by year-end 2005.
Now The Hartford has created a specialized team specifically to address the insurance needs of this highly desirable demographic group, by providing life insurance planning and underwriting that serves their unique needs. The new group, labeled as the Private Wealth Management initiative, made its debut in mid-2006. Its team members are private wealth management consultants, underwriters, and service people, according to Patti Hausherr, director of special markets for The Hartford’s individual life division. She also spearheads this UHNW initiative.
While The Hartford has “always focused on serving the life insurance needs of the top two percent of America’s wealthiest families,” says Hausherr, “now we’re creating special services for families in the uppermost layer of this group.”
The Hartford began its new unit in response to the fact that many of the broker/dealer firms and banks it works with–and by extension, their advisors–have also been focusing on the ultra-high-net-worth market. The PWM team’s efforts are supported by the company’s Estate and Business Planning Department.
UHNW clients are not the only ones whose needs are met by the Private Wealth Management team. The staff of six provides a battery of services to the financial planners and other financial professionals who serve this elevated client base. Services offered include face-to-face meetings with underwriters experienced with large cases; underwriting services specifically tailored to these professionals and this client class; communication materials appropriate for the planner; advance notices of premiums due; and financial reports for policy reviews.
The UHNW gain assistance with estate planning, wealth transfer, charitable giving, and business planning. Says Hausherr, “Most families in this market have two primary concerns: preserving assets and transferring assets.” This unit, she adds, “is well equipped to handle both.” Hausherr says that the average net worth of the clients served by the unit in 2006 was $64 million.
“Each broker and each client is unique,” she says, and the single common thread is that each client’s case is begun with comprehensive planning. While this class of client chooses different products according to differing financial goals, risk tolerance, and portfolio composition, says Hausherr, many families choose variable universal life products.
The Hartford plans to increase the size of the PWM team from six to 10 consultants in 2007. The consultants work with brokers, planners, banks, and independent agents, as well as trust companies, CPAs, and attorneys with access to HNW clients.