Offer the services high-net-worth clients want

High-net-worth clients have unique needs and high expectations of the advisors they entrust their wealth. They use more services compared to affluent clients broadly, and they expect a deeper level of expertise and personalized solutions. Given the complexity of their finances, they desire various specialized services such as charitable planning, intergenerational wealth planning, trust services and nuanced tax strategies.

Amid heightened competition to serve wealthier clients, advisors have been seeking to enhance their value by expanding their service menus to include more specialized services. As these services require a deep level of expertise, some advisors outsource to a third-party expert. On average, practices that focus on high-net-worth clients offer 11.5 services¹ versus 7.1 across advisory practices broadly.²

High-net-worth practices offer more specialized services
% of practices offering services in-house and by outsourcing

Tax and estate planning have become increasingly important as aging Baby Boomers transfer wealth to their heirs. Advisors can benefit from their involvement in a client’s estate matters as it creates an opportunity to become an essential partner to a wealthy family for generations to come.

Advisors who provide investment management services to high-net-worth clients are increasing their focus on optimizing after-tax returns. They provide clients with personalized portfolios that employ innovative strategies such as direct indexing and option overlays, and hold non-traditional asset classes including private market investments. Constructing individual portfolios for every client can be very time-consuming, and thus more advisors are adopting the use of tax-efficient separately managed accounts. Delivering personalized portfolios at scale frees up more time for advisors to interact with their clients and provide more high-touch services that deepen loyalty and drive referrals.

Revisit your service model

To attract the high-net-worth clients you wish to serve, you will need to offer a robust menu of specialized services they specifically value. Review your current service model against the needs and preferences of your ideal clients to identify gaps or opportunities to improve your services.

1. Identify your ideal client. Think about the high-net-worth clients you serve today. Who is profitable, enjoyable to work with and a source of quality referrals? You likely have a few clients like this. They embody the profile of your ‘ideal client.’
2. Discuss your services with your ideal clients. Select a few of your ideal clients whom you believe would provide helpful feedback on your service model. If possible, conduct these discussions during family meetings as it can be beneficial to glean insight from a client’s spouse and children as well.

• Present your ideal client (and each family member) with a list of the services you currently offer. Ask them to rank the importance of each service to them personally, and then to rate how well you deliver each of the services they receive from you. Leave the room and allow time for them to contemplate their responses.
• When you regroup, review and discuss your clients’ responses. Ask them to elaborate on why certain services are more important to them. Next, ask them to explain their ratings of the services you provide them. Seek deeper feedback by asking questions like “Why a 9 and not a 10?” or “Why a 10 and not a 9?” This discussion can help you better understand your clients’ needs, uncover ways to improve your services, and identify what you are doing particularly well.
• Ask your client if there are services you currently do not offer that would be valuable to them. Refer to our list of services that attract high-net-worth clients to help guide this conversation.

3. Reflect on your findings. After you have conducted these discussions with several of your ideal clients, identify the common themes in what you heard. Is there room to improve your existing services? Do you need to add new ones? Have you been expending resources on services that your ideal clients don’t value? Reflect on your findings and consider how you might adjust your service model to better align with the needs and preferences of your ideal clients.

Before you add a new service, carefully assess the market opportunity and the cost of providing it so you can reasonably project its profitability. The costs might include adding team members or even acquiring another firm to access the expertise you need to deliver the service effectively.

If you already have the necessary expertise in-house, consider the opportunity cost of adding the service. How will you reallocate time to provide the new service? How will the additional service affect bandwidth within your team? Consider how you can scale the new service or create capacity for it by streamlining or eliminating other activities that are less valuable for business growth.

Many high-net-worth advisors have freed up time to offer new services by streamlining their investment processes. They use custom models to provide personalized portfolios to their wealthiest clients, and third-party models for all other clients. Advisory firms that segment their clients and provide personalization at scale tend to have higher revenue stability and higher valuations for mergers and acquisitions, which will be critical if you decide to acquire another practice or sell yours in the future.

Build a team with diverse expertise

Teams comprised of various specialists can be beneficial given the unique and complex needs of high-net-worth clients. 75% of large RIAs (managing assets of $500 million or more) have specialized teams, enabling them to offer more sophisticated, personalized services than firms that do not have specialists.³

Teams with specialists provide more services to wealthy clients
% of practices offering personalized services

If you plan to expand your team, seek expertise that align with the services your ideal clients value and consider how each role fits into the structure of your team. Some high-net-worth advisory firms apply a horizontal leadership model in which several advisors share equal partnership while each has a particular leadership role, such as CEO, CIO or Operations manager. This approach allows advisors to focus on clients while efficiently managing business responsibilities and delivering specialized expertise.

Additionally, many firms employ junior advisors to serve lower-tier clients or the next generation of top-tier clients. This allows senior advisors more time to focus on high-value clients and business growth. Hiring next-generation talent is beneficial as they bring fresh perspectives and innovative solutions, they excel with using technology and social media, and they more easily forge authentic connections with younger investors.

Grow your business with high-net-worth clients

The BlackRock Business Consulting team has helped thousands of advisors, teams and firms evolve their practice to attract the clients they wish to serve. Explore our online resources designed to help you attract and retain high-net-worth clients for enduring business growth.