Adam Malamed, Chief Executive Officer, Sanctuary Wealth.
The financial services industry is presumably under threat, with some believing AI will eventually replace human financial advisors. Meanwhile, others point to next-gen investors getting ideas from “finfluencers” on social media platforms such as TikTok.
But the reality is that outsized wealth tends to create complexity, which means demand for experienced financial advisors will always be robust. To underscore the point, consider how high-net-worth investors expect a standard of service that, until recently, has only been available to the ultra-high-net-worth segment.
As CEO of a firm that partners with advisors serving some of the most discerning high-net-worth investors in the country, I know that delivering exceptional client service isn’t optional—it’s a must. In fact, rising expectations for more personalized experiences are among the most transformational forces reshaping the wealth management profession today.
Today’s Well-To-Do Could Be Tomorrow’s Ultra-Rich
There are multiple reasons this has happened, ranging from changes in technology to shifts in consumer expectations. But perhaps the biggest driver is the so-called “Great Wealth Transfer.”
Cerulli Associates projects younger generations will inherit a total of $124 trillion through 2048. More than 50% of that is expected to come from high-net-worth and ultra-high-net-worth families, representing just 2% of American households.
Notably, today’s affluent investors recognize that, in many cases, they are well-positioned to grow even wealthier. And even high-net-worth investors who don’t anticipate entering the ultra-high-net-worth tier understand that wealth management professionals are eager to win their business.
Pending Shortfall Of Advisors
Nevertheless, the growth opportunity for advisors is enormous, especially when considering the waning supply of qualified financial advisors, thanks to a wave of retirements and a lack of younger recruits lining up to fill in the gaps.
By 2034, consulting firm McKinsey & Company estimates there will be a shortage of roughly 100,000 advisors. At the same time, the firm says the number of families and individuals working with an advisor could reach up to 71 million over the next nine years, representing a 34% increase from 2024.
Even so, to attract high-net-worth clients, financial advisors must meet the high bar set by family office standards, which include advanced digital tools, sophisticated investment strategies and personalized relationship management.
Four Ways To Provide Ultra-High-Net-Worth Service
Use technology to augment your relationship management.
In nearly every industry, technology innovation is driving increased efficiencies. Wealth management is no different. This involves leveraging technology, including AI and automation, to automate more commoditized tasks that have historically been labor-intensive, such as scheduling appointments, note-taking, portfolio rebalancing and routine financial planning updates.
From there, use the added scale to maximize how much time you can spend with clients. Wealth management is, and will remain, a deeply personal business, and there is no substitute for empathetic and thoughtful financial advice delivered by an experienced professional.
Provide access to institutional-quality private market investments.
At one time, sophisticated private market investments such as private debt, private equity funds, hedge funds and other alternatives provided by top institutions were out of reach for retail investors. Instead, access was limited to foundations, endowments or ultra-wealthy families with hundreds of millions of dollars in investible assets.
Now, more investors want access to the private markets. Yet, many of them recognize the difference between institutional quality alternatives and those offered by less prestigious sponsors. Advisors, therefore, must use high-quality solutions to meet the growing demand (keep in mind that, unlike public securities, private market investments have added administrative, regulatory and due diligence requirements).
Include philanthropy in your financial planning.
Donating money to charities has long been a way for investors to support causes that align with their values, while also generating tax benefits. Increasingly, the well-to-do, especially among younger generations, are motivated by mission-driven approaches to wealth management.
As a result, advisors should proactively initiate conversations around charitable goals. They can also consider utilizing outside expertise and tools to help clients identify the most effective giving vehicles—whether donor-advised funds or direct contributions—to support the causes they care about and maximize their impact.
Offer concierge services.
High-net-worth investors increasingly seek personalized services that fall outside the traditional boundaries of financial advice and planning. This could include everything from bill pay to helping their clients’ children with career planning, as well as family governance discussions. A hands-on approach that goes above and beyond can significantly enhance client satisfaction and cultivate loyalty.
Toward The Future
High-net-worth individuals and families now are demanding a service experience traditionally associated with ultra-high-net-worth investors. While providing them that may not have been possible years ago, the right technology, tools and expertise do allow elite financial advisors to deliver it today.
Notably, recent surveys have made it clear that high-net-worth individuals are willing to pay for advice as long as it comes with added services. Doing that may become a challenge for some, but it’s an enormous opportunity for entrepreneurial advisors who are willing and able to embrace what’s possible.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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