Customisation, investment product variety and a focus on family legacy are three of the top strategies advisers need to consider when tailoring their service offering to high-net-worth individuals, according to a new report.
Netwealth’s white paper, How to attract and retain high net worth clients, based on interviews with advisers at a number of specialty HNW advisory groups including Koda Capital, William Buck & Associates and ANZ Private, concluded that in order to best service wealthy clients and their complex needs, advice practices needed to be seen as “an all-purpose financial hub that offers personalised solutions to specific challenges”.
While firms may need to offer a variety of products and solutions to meet HNW clients’ needs, including customised portfolio development, business advice and lending advice, the client’s individual adviser should be “the first and in many cases only point of contact in relation to any financial issue a client may encounter”, the paper said.
In addition, practices catering to such individuals would need to have the capability to offer less typical investments such as international equities and private equity opportunities, as wealthier clients tended to be more interested in making higher allocations to these asset classes.
“While high-net-worth clients invest in listed and unlisted asset classes just like other investors, they typically have a higher allocation to offshore assets and private market assets. This is because they can afford, and can justify, the additional administration and accounting costs involved in offshore investments, and can tolerate the lack of liquidity and longer time horizons of private market assets,” the paper said.
HNW clients also tended to have a particular focus on ensuring their wealth was adequately managed by the next generation, meaning advisers needed to support them through the inheritance planning process in order to provide a stronger service offering for this group.
The paper suggested advisers may want to offer services around traditional estate planning as well as preparing younger family members for the challenge of managing large amounts of wealth, possibly through an older and younger adviser in the firm working together to service two generations of clients.
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