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It should be implicit that high-net-worth clients, particularly those to which the “ultra” label applies, need advisors and advisors covet them. After all, these individuals have more assets to manage. Broadly speaking, that implies they more likely to want the assistance of a financial professional and those professionals benefit from such relationships.
On the other hand, some advisors may view high-net-worth clients as sophisticated – to some extent, they probably are – and not needing a hands on approach. In any environment, the opposite is true. Affluent clients want advisors to be diligent and that’s particularly true in the current climate.
Amid stubbornly high inflation, economic lethargy and not much visibility as to when interest rates will be cut, among other factors, now is an ideal time for advisors to show well-heeled clients their business is valued and strategies are available to steer them through tumultuous times.
High-Net-Worth Clients Want Guidance
As advisors know, it’s one thing to get a client in the door and another altogether to adequately service said client and retain them. CNBC’s latest millionaire survey confirms the point that this is an ideal time for advisors to up their catering to high-net-worth clients.
“Millionaires believe the biggest current threat to their wealth is the stock market, with 60% expecting the S&P 500will be down or relatively flat by the end of 2023,” according to the network. “Tied for second place, respondents also worry about U.S. government dysfunction and inflation, with the majority of respondents expecting the economy to be weaker by year-end, the survey found.”
Just 7% of the 750 respondents said rising taxes are the biggest headwind to their personal wealth. That’s instructive for advisors on multiple fronts. First, it implies some affluent clients don’t currently need extensive assistance when it comes to tax planning. Second, as confirmed above, they’re more concerned with the macroeconomic climate. While advisors don’t have all the answers when it comes to Fed policy, economic data or where the stock market is headed next, they are better equipped to tackle these issues than clients are on their own.
Inflation Worth Focusing On
Yes, inflation is showing signs of cooling, but it’s still high and well above the Fed’s desired 2% range. Many of the millionaires polled by CNBC believe it could take up to five years for the Fed to beat back inflation and 43% want to make portfolio changes as a result.
That’s further confirmation these clients need their advisors and that advisors need to have asset-level inflation-fighting ideas and strategies. Those include alternative assets, including oil and gas and unique private real estate opportunities.
Having those ideas at the ready along with some macroeconomic TLC could assuage skittish high-net-worth clients while cementing their faith in the advisor/client relationship.