Advisors looking to serve the high-net-worth and the ultra-high-net-worth need to be in tune with their financial goals, which change as they grow their wealth.
That’s among the findings of a special report from the fourth annual Advisor Authority Study commissioned by Nationwide Advisory Solutions, formerly Jefferson National, which also says that while both groups seek to have a financial advisor to feel more confident in their financial future (HNW 39%, UHNW 38%), objectives evolve as the former grows sufficient wealth to become the latter.
In fact, while the HNW look for advisors to focus on financial planning (15%), because they lack confidence in managing their own assets (11%) and don’t have time to do it themselves (11%), the UHNW are more concerned with leaving a financial legacy (12%) and need assistance in managing their taxes (9%).
Both groups of affluent investors look for criteria in common when choosing a financial advisor. Advisor experience is a big one (50% HNW and 38% UHNW), followed by personalized advice for a holistic financial picture (31% HNW and 20% UHNW) and a fiduciary standard that puts clients’ best interest first (29% HNW and 24% UHNW).
And these more affluent investors are more likely to believe a single federal fiduciary standard should prevail across the financial industry (74% HNW and 80% UHNW, compared with 68% of investors overall). In addition, the study indicates that tech is important to the UHNW, who are more likely to cite increased use of social media (18%), mobile technology (16%) and robo advisors (12%) as factors for choosing an advisor.
And considering that the HNW and UHNW are only a tad more optimistic (the former, at 65%) or a tad less optimistic (the latter, at 58%) than investors overall (62%), it stands to reason that protecting assets is a big factor for all investors, particularly for the HNW.
In fact, RIAs and fee-based advisors focused on tax planning and tax-efficient investing could not only help build more wealth for more affluent clients, they could be in line themselves for more growth.