Nationwide Advises How FAs Can Cater to HNW and UHNW Clients
Financial advisors who want to tap into the estimated $18.6 trillion controlled in 2017 by U.S. investors with $1 million or more in assets should pay attention to how the needs of these more affluent investors differ from the typical client’s, Nationwide Advisory Solutions says.
Advisors still have the opportunity to penetrate the market: Twenty-nine per cent of high net worth investors — or those with $1 million to less than $5 million in assets — still do not work with an advisor, according to a survey of around 1,700 financial advisors and individual investors nationwide published by Nationwide, formerly known as Jefferson National. Meanwhile, 26% of ultra high net worth investors, or those with $5 million or more in assets, currently do not have a financial advisor, Nationwide says.
To appeal to the mindset of the more affluent investor, advisors should first understand that while typical investors seek advice primarily about saving for retirement, HNW investors are more likely to focus on financial planning while lacking confidence and time to manage their finances on their own, the survey found. The more affluent investors are also more likely than the typical investor to seek advice on legacy planning and managing their taxes, according to Nationwide.
Meanwhile, when looking for an advisor, 50% of HNW investors and 38% of UHWN investors cite advisor experience as one the top three factors, followed by a holistic financial picture and a fiduciary standard, the survey found. More affluent investors also pay attention to advisors’ technological savvy, with the use of social media, mobile technology and robo-advisor offerings all playing a part in how they select their advisor, Nationwide says.