How to attract high net worth clients

What advisors need to know

• Advisor competition for wealthier clients is intensifying as U.S. investable assets become more concentrated among higher net worth individuals.
• The impending generational wealth transfer creates an opportunity for advisors who know how to attract the next generation of high net worth clients and a risk to those who don’t.
• To attract and retain high net worth clients, you need a personalized service model and a team with diverse areas of expertise who can build trusting relationships with clients of today and the next generation.

High net worth clients are essential to future business growth

Serving more clients is one way to grow the assets under management (AUM) of an advisory practice. However, you can increase your profitability more efficiently by upscaling your clientele. Advisor competition for high net worth and ultra high net worth clients is intensifying as wealth becomes increasingly concentrated within this small (but growing) market segment. Clients with a net worth more than $5 million control 47% of investible assets in the U.S. today.¹

Increasing concentration of wealth is driving intense advisor competition
Distribution of U.S. investible assets by client net worth, 2010 vs. 2022

If you currently serve high net worth clients, you likely worked hard to earn them (or to make them) and this is no time to become complacent. We are already in the early stages of an estimated $84 trillion generational wealth transfer and it is expected that more than 70% of adult children will leave their parents’ advisor when they receive their inheritance.² Adult children of high net worth families are currently receiving inheritances totaling more than $500 billion annually, and by 2032, that is likely to exceed $1 trillion per year.¹

If your business is not prepared for the next generation of high net worth clients, your revenue stability will be at risk as your older clients pass away. On the other hand, if you know how to effectively attract and retain the heirs of current high net worth clients, you will have an opportunity to accelerate your revenue growth as the great wealth transfer puts an enormous amount of money in motion over the coming decades. To compete for high net worth clients and grow your business for the long term, you will need a robust, personalized service model and a versatile team of experts that is able to engage and connect with both older clients and the next generation.

Advisors are evolving to attract high net worth clients

High net worth clients have complex financial needs and they expect advisors to provide personalized solutions. On average, practices that focus on high net worth clients offer 12 services¹ versus 7 across advisory practices broadly.³ Amid heightened competition for high net worth clients, the advisors who serve them have been seeking to enhance their value by expanding their service offerings. Today, high net worth advisors offer an average of two more services than they did five years ago, and 82% say they will add more services within the next five years.¹ 

Tax and estate planning have been the fastest-growing areas, driven largely by advisors’ anticipation that demand for these services will increase as high net worth families transfer wealth from one generation to the next. Providing estate services to aging Baby Boomers creates opportunities for advisors to position themselves as an essential partner throughout a client’s family lifecycle. Tax services have long been a high priority for wealthy clients and that focus is likely to sharpen as the estate and gift tax exemption limit is poised to be cut by half at the end of 2025.

Tax and estate planning are the fastest-growing service areas
% of high net worth practices offering planning services in 2023 vs 2017

Given the intricacies of their finances and high tax rates, high net worth clients value personalized services like charitable planning, intergenerational wealth planning and trust services, as well as unique tax-efficient strategies such as gifting through 529 plans for both education and retirement. Given the complexities of tax planning, it is the most outsourced service among high net worth practices (40%), although many large advisory firms have added in-house tax professionals.¹

High net worth advisors center their investment management services around optimizing after-tax returns. They provide clients with personalized portfolios that employ innovative strategies such as direct indexing, alternative investments, private markets and option overlays, as well as customized exposures for clients who wish to express their personal values.

As constructing individual portfolios for every client can be very time-consuming, high net worth advisors often use separately managed accounts (SMAs) to deliver personalized portfolios at scale. This approach allows advisors to spend more time interacting with clients and providing high-touch services that deepen loyalty and drive referrals. Financial industry analytics firm Cerulli predicts that as the high net worth client demographic continues to grow at a faster rate than lower wealth tiers, advisors will increasingly adopt SMAs to streamline their investment process.¹

Personalize your service model

If you want to attract high net worth or ultra high net worth clients (and retain the ones you have), you may need to adjust your menu of services. Start with your ideal client – the one you wish all of your clients were like. They are both profitable and a pleasure to work with. You likely have a few who fit the profile. Discuss your service offerings with each of these clients, preferably during family meetings as this allows you to hear from both your current clients as well as their spouses and children.

Present each family member with a list of the services you currently offer and ask them to individually rank the value of each service and rate how well you deliver them. When you regroup, discuss the rankings to better understand each client’s rationale. Next, review the ratings and seek deeper feedback by asking questions like “Why a 9 and not a 10? Or why a 10 and not a 9?” This can help you uncover ways to improve your services and identify what you are doing particularly well. Additionally, ask if there are services you have not been providing that would be valuable to them. Refer to a checklist of potential offerings to help guide this conversation.

Once you have collected feedback from several of your ideal clients and their families, reflect on the insights you gleaned. Do you need to improve your existing services? Do you need to add new ones? Revisit your service model with a focus on enhancing your value to the type of clients you most wish to serve. Consider discontinuing any services that your ideal clients ranked low in value so you can reallocate resources where they count the most.

Before adding a new service, carefully assess the market opportunity and the cost of providing the service so you can reasonably project its profitability. You may need to hire new team members or even acquire another firm to access the expertise you need to deliver the service effectively. If you already have the expertise, how will you reallocate your time in order to provide the new service? How will the additional service affect bandwidth within your team?

Consider how you can scale the new service or create capacity for it by streamlining or eliminating activities that are less valuable to your business growth. For example, in order to provide personalized portfolios to your high net worth clients, you might streamline your investment process for the rest of your clients by using models.

Advisory practices that offer personalization at scale have higher revenue stability and higher valuations for mergers and acquisitions, which will be critical should you wish to acquire another practice or sell yours at some point in the future.

Build a team with diverse expertise

High net worth clients expect their advisors to possess deep expertise. Thus, teams comprised of various specialists can be more effective in serving their clients’ unique needs. Among RIAs managing assets of $500 million or more, 68% have specialized teams, enabling these firms to offer more sophisticated, personalized services than RIAs of the same size that do not have specialists.

Teams with specialists can offer more personalized services
% of practices offering personalized services

High net worth advisory teams often apply a horizontal leadership model. Several advisors share equal partnership while each has a particular leadership role, such as CEO, CIO or Operations manager. This approach allows advisors to focus on clients while efficiently managing business responsibilities and delivering specialized expertise.

If you plan to expand your team, seek specialized expertise that aligns with the services your ideal clients value and consider how each role fits into the structure of your team. High net worth practices often employ junior advisors to serve lower-tier clients or the next generation of top-tier clients. This frees up time for senior advisors to focus on high-value clients and business growth. Additionally, consider the benefits of hiring next-generation talent: they bring fresh perspectives and innovative solutions, excel with technology and can forge authentic connections with younger investors.

Keep in mind that high net worth clients expect consistently high levels of personalized service. If your team lacks the expertise to address a client’s particular need, outsource the work to a trusted professional and oversee it on your client’s behalf. Select third-party professionals carefully as the quality of their services will reflect on you.

Involve your clients’ families

While your older high net worth clients are critical for your revenue stability today, the next generation is critical for the sustainability of your business in the future. There are a number of ways you can attract and build relationships with younger investors:

• Hire next-generation talent. Clients often feel more comfortable and understood when working with professionals of a similar age.
• Provide a digital platform. Young investors prefer professional advice alongside digital self-service tools.
• Offer values-aligned investments. Acknowledging a client’s personal convictions shows that you value them.
• Educate them. Empowering your younger clients with financial literacy helps them trust you.
• Communicate their way. Younger generations tend to prefer digital communication versus phone calls.
• Connect on social media. Your presence on social media demonstrates that you are in tune with a modern audience.

Proactively engaging with young investors is essential to growing your business and retaining assets for the long term. Advisors who wait until the generational wealth transfer accelerates to modernize their practice and connect with clients' adult children will be at risk of seeing their AUM gradually decrease as older clients pass away.

Establishing relationships with your clients' heirs early on increases the likelihood of their loyalty to your practice after the client passes away. 62% of high net worth advisors say the most effective way to do this is to simply ask clients and spouses to get their children involved.¹ Remember that upon the death of a client, control of their assets often transfers to a spouse before it goes to the children, so it’s vital to engage the whole family.

When you involve family members in the financial planning process, you have an opportunity to aid the continuation of your client’s legacy. A common reason for heirs leaving their parents’ advisor is their intention to spend their inheritance, which may conflict with your client’s wishes. This may be prevented if the client’s children understand the purpose of their future inheritance and its significance to their family.

Facilitate a family conversation by asking your client to share the story of their wealth, the sacrifices made to attain it, and how it has grown over time. Encourage your client to express how they feel about their wealth today and share their vision for how it will be used or continue to grow in the future. Many families do not discuss money openly and thus your guidance could meaningfully influence the continuation of your client’s legacy while deepening your personal connections with their family members.

Grow your business with high net worth clients

Assisting high net worth clients in growing, preserving, protecting, and transferring their wealth can be mutually beneficial for both your clients and your business.

The BlackRock Business Consulting team has helped thousands of advisors, teams and firms evolve their practice to attract the clients they wish to serve. Explore our online resources designed to help you attract and retain high net worth and ultra high net worth clients for enduring business growth.

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