HNW Clients Want More “Complex” Services from Advisors 

High-net-worth (HNW) investors value their advisor’s service offerings more than personal relationships, according to a report from Cerulli Associates. 

Approximately 35% of HNW clients, defined as individuals with $5 million or more in investible assets, indicated they initiated a relationship with their primary advisor due to the services they offered or because of their experience working with them, according to “The Cerulli Report – U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2023.” 

These characteristics are becoming increasingly crucial for advisors to address, with high-net-worth households’ investable assets increasing by more than $23 trillion since 2011, according to Cerulli. 

Also, since 2017, Cerulli research finds that “every category of service offering has become more commonplace to meet enhanced client expectations and needs.”  

Clients are particularly interested in investment services offered by high-net-worth firms, such as alternative manager search and selection (78%), and internally managed hedge funds or funds of funds (32%).   

To capitalize on the growing demand in these fields, the Boston-based researcher proposes asset managers provide “greater access to education, improved diligence or analytics capabilities, or simply a fund with differentiated price, performance, or exposure characteristics.” 

In terms of planning services, Cerulli discovered that all high-net-worth practices now include financial planning as a primary or secondary offering. Other rapidly expanding practices include estate planning (70%), and tax planning (45%). 

“It is increasingly important for technology providers, asset managers, and other specialist partners and platforms to aid HNW-focused intermediaries in addressing these growing needs for their clients, and the challenges posed in delivering more services while maintaining the highest levels of quality and profitability,” said Chayce Horton, senior analyst at Cerulli.