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- Financial advisors are increasingly seeking to win business from ultra-high net worth clients.
- UHNW households often have at least $20 million in investable assets, and require services that extend far beyond investment management.
- Here’s how households can judge whether financial advisors are well-suited to work with the uber-rich.
PhotoAlto | Sigrid Olsson | Getty
Financial advisors increasingly want to add the super-rich to their client lists. Not only do ultra-high net worth households offer a level of cachet to financial advisors, but there’s also growing demand for advice from this client segment, according to experts.
There were about 442,000 households with $20 million or more in financial assets as of 2024, according to the latest data from Cerulli Associates, a consulting and market research firm. They represent about 0.3% of the U.S. population.
Those households collectively held $22.5 trillion of investable assets, accounting for nearly 25% of such wealth across all U.S. households — up substantially from a 10% share in 2010, according to Cerulli.
“High net worth is the holy grail in many ways” for financial advisors, said Vlad Golyk, a partner at McKinsey & Co., who leads the consulting firm’s wealth management practice in North America.
“The money is sticky, and there’s prestige as well,” he said.
However, not all financial advisors are well suited to work with ultra-high net worth households, experts said.
These clients — generally, those with investible assets totaling roughly $20 million to $30 million or more — have specific financial needs that require expertise beyond that typically suited to the average investor, experts said.
“It’s a different job,” Golyk said.
The No. 1 question: Am I an ‘outlier’?
There’s one big question that extremely wealthy households should ask prospective financial advisors to gauge whether they should hire them, experts said.
“The first question has to be: ‘This is what my financial picture looks like. What services do you have, and what experience do you have working with clients like me?’” said Chayce Horton, an associate director in the wealth management practice at Cerulli Associates, a consulting and market research firm.
The operative words here are “like me,” because households and their needs can vary a lot in the ultra-high net worth market, Horton said.
For example, you might be a family with a significant manufacturing business, or a 35-year-old engineer with $35 million in stock options in a company that’s about to go public — both of which are “complex, individualized situations,” he said.
Similarly, Golyk said uber-rich clients don’t want to be an “outlier” among a financial advisory firm’s other clients.
In other words, they should strive not to be the firm’s biggest or smallest client, Golyk said.
Services that advisors to the ultra-wealthy offer
Ultimately, the bulk of services an advisor will offer to ultra-wealthy clients exist outside of a traditional portfolio management context, Horton said.
Generally, the extremely rich need advisors who can oversee complex financial issues and intergenerational wealth. Services typically entail tax, estate and trust planning; and business advisory and philanthropic services, experts said.
The family governance piece is a biggie, experts said.
It’s important to find an advisory firm that can serve multiple generations simultaneously, Horton said.
That expertise goes beyond the technical, financial and administrative aspects of estate and tax planning, management of trusts, and overseeing wealth across generations — and also includes serving as “mediator or family therapist,” Horton said.
For example, parents may have $50 million that their children may or may not know about, and that younger generation may or may not be inheriting the money, he said. That family might need to know the options for establishing a family trust, how to structure things most tax-efficiently and, once decided, how to communicate that with the children, he said. Or, in another scenario, how would a wealthy entrepreneur with a family business pass on leadership responsibilities across generations?
These are emotional situations for advisors to handle, Horton said.
Firms don’t necessarily need to offer all these services in-house — they can outsource certain functions — but the end result must be “seamless” for the client, Golyk said.
Two more important questions to ask a prospective advisor are:
- How do you implement tax and estate planning? Wealth transfer is where a lot of value-add is for ultra-high net worth advisors, and this question gives insight into whether advisors understand how to approach this complicated issue, Golyk said.
- What is your succession plan? Prospective clients are probably meeting with a senior advisor who leads a team. However, families are likely hiring an institution for the next 30 years or more — so this specific advisor may no longer be there years down the road, Golyk said.
The reaction to certain questions offers as much insight as the answer, he said. The best advisors answer all these questions, while those who get defensive probably aren’t best for you, he said.
“I’d want to know overall that this is a highly professional team who serves clients like me, helping with complex structuring and transferring of assets, and they think ahead about my kids, grandkids and generational entities — and they take care of all of it,” Golyk said. “That’s what I want to walk away with.”
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