What Advisors Can Learn From Ultra-Wealthy Clients

High-net-worth investors demand a lot from their financial advisors. The ultra-wealthy, in particular, expect to receive a full-service platform from their wealth managers. More and more, they are seeking advisors who can offer them global wealth management services because many of them hold great amounts of wealth outside the U.S.

Key Takeaways

  • Millionaires on up to billionaires often don't have time to manage their financial empires and seek advice advisors who specialize in high-net-worth clientele.
  • Many wealthy individuals keep assets overseas and so unique challenges arise to minimize taxes and have a localized presence wherever assets may be stored.
  • Service, above all, is expected to be top-quality and relational at this level of wealth management.

Think Global, Act Local

To keep up with those demands, many large wealth management firms are looking to adjust and grow their businesses to meet the unique needs of clients who have assets overseas but want to be served locally. Deutsche Bank’s wealth management group, Deutsche Asset & Wealth Management, in particular, has found that its ultra-wealthy clients are now demanding access to various departments inside an investment bank to complement the wealth management services they are receiving as they look to invest in the U.S., Europe, and Asia.

With a plethora of new financial advisors entering the marketplace, brokerage firms and banks no longer hold a stronghold on the wealth management industry. Registered investment advisors (RIA) are now giving those firms a run for their money and that has served to improve the quality of industry’s offerings as a whole.

Facing Challenges

Staying ahead of the competition requires retaining top talent. It also means making sure that those top advisors are meeting the demands of their clients and staying abreast of the ever-changing financial environment. Coming out of the financial crisis, financial advisors learned that they have to be more attentive to their clients’ needs and more focused on building those relationships than ever before.

That’s because high-net-worth clients, today, are much more informed about the markets and money management services than they were in the past. They are now requiring more in terms of the level of sophistication they want their advisors to hold and the level of trust they are willing to put in their advisor’s hands. With that in mind, wealth management firms would also be wise to hold onto their most talented advisors and to continue to develop that talent over the years.

Size Isn’t Everything—Service, Too

The larger advisory firms may be better able to cater to the needs of the ultra-high-net-worth investor than smaller, boutique firms because they have a variety of departments that they can draw on when catering to their clients' needs. But bigger doesn’t always mean better. What’s more important to clients is the services these firms are able to offer and the access they can provide to wealth management solutions.

These days, clients are also demanding more advice-driven relationships with their wealth advisors, and they want more risk management counseling. The financial crisis has made many ultra-high-net-worth clients more focused on preserving their wealth than creating more of it. Nonetheless, they are still opportunistic when it comes to investing. In response, some firms have focused on creating investment models that are both quick to respond to new trends and developments in the market and that also meet the needs of the firm’s most sophisticated clients.

Preparing for Future Growth

In response to changing trends in wealth creation, Deutsche Bank is looking to grow its West Coast wealth management business as well as increase the services it provides in the country’s energy belt. It will also focus on improving its brand recognition in both North and South America.

The Bottom Line

Financial advisors that cater to the ultra-wealthy should consider expanding the sophisticated solutions they provide, improving client-advisor relationships and offering global services in order to better attract and retain clients.