High Net Worth Definition and Financial Advisors – PillarWM

High net worth, very high net worth, and ultra-high net worth individuals have different goals and aspirations from the average person. They can’t rely on just any financial advisor or financial institution to look over and handle their fiscal matters. If you have millions of dollars worth of liquid assets, you understand this better than anyone. That is why we recommend that you read our Ultimate Guide to Choosing the Best Financial Advisors for Families worth 5 million dollars to 500 million dollars. We offer this guide free for investors who have a liquid net worth of more than 10 million dollars! Now, before you get started on finding a high net worth financial advisor, it is best to understand the high net worth definition and its importance.

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At Pillar Wealth Management, we understand what it means to have a high net worth and an ultra-high net worth. Our wealth managers can expertly handle your high-value assets thanks to their decades worth of combined experience in working in the financial world and serving wealthy clients.Through our experience of working exclusively with investors with 5 million to 500 million dollars’ worth in liquid assets, we are well acquainted with the unique requirements of affluent clients. We use our range of services, from liquidity management and cash flow planning to estate planning and insurance planning, to come up with creative solutions to optimize your portfolio for maximum returns.Get in touch with Pillar Wealth Management today to schedule your first consultation.

In this article, we will be discussing the high net worth definition, what is high net worth financial management, and how high net worth asset allocation and high net worth investing differ for wealthy investors.

Table of Contents
What is High Net Worth, Very High Net Worth,and Ultra-High Net Worth? Why is the High Net Worth Definition Significant? How Does High Net Worth Financial Advice Differ from Traditional Financial Advice? Finding High Net Worth Financial Advisors High Net Worth Definition and Wealth Management

What is High Net Worth, Very High Net Worth,and Ultra-High Net Worth?

When you accumulate enough money to pass a certain threshold, you can become classified as either high net worth, very high net worth, or ultra-high net worth individual. Your liquid net worth determines which category you fit into.

So,what is high net worth, very high net worth, and ultra-high net worth, and where do you fit in?

A high net worth definition generally means that you have a liquid net worth of $750,000 to $1.5 million, but this threshold can be defined differently by many financial institutions. In any case, a million dollars is enough to land you the high net worth special treatment.

Next on the net worth scale are very high net worth individuals, who have a liquid net worth of a minimum of 5 million dollars. Lastly, ultra-high net worth individuals have over 30 million dollars’ worth in liquid assets.

Although the last category constitutes about 0.003% of the world’s population, they control 13% of the world’s wealth. This would include billionaires too, who have a liquid net worth of more than a billion dollars.

Affluent individuals accumulate their wealth through finance, investments, banking, or inheritances. Anyone who enters the high net worth category starts looking for ways to improve their financial status and enter the next category. Most of these investors do this through smart investments and portfolio optimization. If you want to learn more about how they achieve this, you can read our guide, 5 Critical Shifts for Maximizing Portfolio Growth Strategies – For Families Worth $5 Million To $500 Million.

Why is the High Net Worth Definition Significant?

America has the highest number of high net worth individuals in the world. This means that they need financial institutions that cater to their unique needs. Fortunately, many banks and institutions have special services and perks for wealthy clients, such as separately managed investment accounts.

These banks and financial professionals understand the intricacies of high net worth asset allocation and high net worth investing. Affluent clients can also take advantage of 24-hour concierge services, unrestricted credit card spending, luxury hotel upgrades, personalized financial plans, and more. Wealth managers and private banks also reserve services such as investment management, retirement income management, and estate planning for the richest clients.

Our wealth managers know that you have different expectations when it comes to your wealth management. Therefore, we strive to provide you with customized solutions in an array of financial services. If you would like to learn more about our services, feel free to schedule a free consultation with our team.

How Does High Net Worth Financial Advice Differ from Traditional Financial Advice?

Various factors, threats, liabilities, and financial aspects make wealthy investors wary of where they get their financial advice from. A traditional financial advisor cannot help you manage your high-value portfolio or predict the risks that a high net worth brings.

This is where high net worth financial advice comes in. Whether you look for a private bank or a wealth management firm for your financial management, a professional can help you achieve your goals while securing your wealth. It’s not enough to know what is high net worth; instead, you need to understand exactly how your needs differ from an average investor. We discuss some of these factors below.

More Diverse Asset Allocation

Wealthy investors have multiple high-value assets, comprising of everything from real-estate, antique artifacts, and precious jewels to savings accounts. This vast diversity requires the expertise of a wealth manager who has experience in dealing with all sorts of high-value assets. High net worth asset allocation needs to be done wisely so that you don’t open yourself up to unnecessary risks or costs.A wealth manager can distribute your assets in various classes, including equities, bonds, stocks, cash, real estate, and mutual funds.

High-Value Portfolios

High net worth investing also requires the touch of a professional who knows the market through and through. Investors have unique investment profiles depending on their risk tolerance, time horizon, and financial goals. A professional can help identify the best investments to align with all of these factors to ensure that you are able to yield maximum profits at the lowest risk. They can predict future price movements and use strategies to enhance your wealth. You can read about some of the strategies our wealth managers use in our guide, Improving Portfolio Performance: The Shifts Multi-Millionaires Must Make to Achieve Financial Security and Serenity.

Higher Risks and Liabilities

The more money you have, the more risk you carry. Lawsuits, debts, divorce, and unforeseen circumstances can end up costing you a large chunk of your wealth. We discuss more on the threats that wealthy families are exposed to in our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 Million To $500 Million.

Investing in high-value assets also carried a significant amount of risk. A wealth manager can foresee the market downturns and advise you based on your goals. They can identify high-risk investments which yield high rewards or low-risk investments with fewer but long-term profits. Moreover, they can help you cut back on unnecessary costs to help you preserve most of your wealth.

Personalized Financial Plans

Since each affluent investor has a unique portfolio and asset allocation, a cookie-cutter plan doesn’t work for them. If you have a high net worth, you need a customized financial plan that caters to your individual goals and aspirations. At Pillar Wealth Management, we understand this better than anyone. Our wealth managers keep your best interests at heart and provide you with customized solutions to your wealth management. Get in touch with us by scheduling a call or meeting.

Retirement Goals and Estate Planning

One of the greatest factors that set apart wealthy investors from average investors is estate and retirement planning. After getting accustomed to a high standard of living, it is reasonable to want to continue enjoying those luxuries once you retire. A financial professional can anticipate your future costs based on your goals and help you collect more wealth to secure your financial future.

Similarly, legacy or estate planning is critical to ensure your fortune is transferred appropriately to the heirs, beneficiaries, or charities that you choose. Wealth managers specialize in this aspect, helping you avoid family disputes, unnecessary conflicts, and legal battles over an inheritance.

Tax Mitigation

Tax management is very necessary for high net worth individuals since they come under the highest tax bracket in the country. Losing a large portion of your wealth to taxes can be avoided with the help of a high net worth financial advisor. They are well-versed in using strategies to legally minimize the amount of taxes you owe each year.

Finding High Net Worth Financial Advisors

Now that you have more clarity on the high net worth definition, you might be wondering how to find a high net worth financial advisor. In our Ultimate Guide to Choosing the Best Financial Advisor for Families worth $5 Million to $500 Million, we discuss the aspects you should consider when searching for a financial advisor. For your convenience, we discuss some of them below.

Standard of Care

When it comes to money, you want to be completely sure that your advisor is working for your best interests. Some financial advisors and most wealth managers follow a fiduciary standard of care. This legally requires them to put your interests above their own.

On the other hand, advisors who abide by the suitability standard of care are not as diligent in their duty. They provide you with suitable options but aren’t necessarily looking after your best interests. Therefore, you should make sure your advisor follows the fiduciary standard rather than the suitability standard.

Understanding Their Approach

An advisor’s approach will ultimately determine whether you succeed in your financial goals. It is best to have this conversation in your first consultation, so you can know whether or not their methods align with your vision.

It is recommended to ask your advisor how often they will monitor and adjust your financial plan since a good financial advisor knows the importance of adapting your portfolio to life changes. The right advisor will consult with you on a regular basis and will be open to changing their approach if necessary.

Customization

Traditional financial advisors and private banks will not put as much thought into your financial plan as a wealth manager would. You can tell from your first meeting with your chosen advisor whether they care about your needs and aspirations. Wealth managers at Pillar Wealth Management offer customized financial planning, making sure that you are able to achieve your short-term and long-term goals.

Experience and Past Record

Before you hire a financial advisor, checking their experience and track record is crucial. You should not only look at their certifications and training but also their experience. An advisor who has worked with and retained wealthy clients in the past is more likely to understand your financial profile better.

Payment Structure

Commission and fee-based payment models are the two most commonly used payment models. With a commission-based model, there remains a risk of conflicts of interest since the advisor may advise you on investments that earn them more commission. With a fee-based model, typically, advisors charge around 1% of the Assets Under Management (AUM), though this value can vary with the financial institution they work for.

Another thing you should be cautious of is hidden costs. It is possible that your advisor will not pre-disclose the transaction fee, management fee, internal expenses, taxes, and other charges in your first consultation. Hence, you should be pro-active and clarify this yourself before you agree to sign anything.

In conclusion, a good financial advisor helps high net worth individuals stay updated on all their financial aspects. This includes their investments, portfolio performance, unnecessary costs, and which strategies should be used to enhance their wealth. If you have more than 10 million dollars in liquid assets, you know you can’t take this decision lightly. Hence, we suggest you read our Ultimate Guide to Choosing the Best Financial Advisor for Families worth $5 Million to $500 Million. It can answer any queries you have about finding the right financial advisor.

High Net Worth Definition and Wealth Management

Pillar Wealth Management works with high net worth and ultra-high net worth clients who have 5 million to 500 million in liquid assets. We understand the high net worth definition and the significance it holds. Our wealth managers can create and monitor a customized plan for you after performing the appropriate high net worth asset allocation analysis and research to suit your profile.To get started on your journey to financial serenity, contact us for your first consultation.

Authors

Hutch Ashoo

Chris Snyder

To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.