How UHNW Families Choose a Financial Advisor

Financial advisors want to add ultra-high-net-worth individuals to their client list. Experts say not only do ultra-high-net-worth households offer financial advisors a level of prestige, but there is also a growing demand for advice from this clientele.

In 2024, about 442,000 households had financial assets of $20 million or more, according to the latest data from consulting and market research firm Cerulli Associates. They represent about 0.3% of the U.S. population.

Together, these households hold $22.5 trillion in investable assets, accounting for nearly 25% of all U.S. household wealth, up from a 10% share in 2010, Cerulli said.

“In many ways, high net worth individuals are the holy grail” for financial advisors, said Vlad Golik, a partner at McKinsey & Company and head of the firm’s wealth management practice in North America.

“The money is stable and there is prestige,” he says.

But experts say not all financial advisors are suited to help ultra-high-net-worth households.

Experts say these customers — typically those with approximately $20 million to more than $30 million in total investment assets — have specific financial needs that require more expertise than is typically appropriate for the average investor.

“It’s a different job,” Golik said.

According to experts, there’s one big question ultra-high-net-worth individuals should ask a potential financial advisor to determine whether they should hire one.

“The first question should be: ‘Here’s my financial situation. What services do you offer and what is your experience working with clients like me?'” said Chayce Horton, associate director of the wealth management practice at Cerulli Associates, a consulting and market research firm.

Households and their needs can be very different in the ultra-high-net-worth market, so the operative phrase here is “just like me,” Horton said.

For example, you might come from a family with a large manufacturing business, or you might be a 35-year-old engineer with $35 million in stock options at a company about to go public. Both are “complex and individual situations,” he said.

Similarly, Golik said ultra-high-net-worth clients don’t want to be “outliers” among a financial advisory firm’s other clients.

In other words, they should try not to be the company’s biggest or smallest customer, Golik says.

After all, most of the services that advisors provide to ultra-high-net-worth clients exist outside of traditional portfolio management, Horton said.

Extremely wealthy individuals typically need advisors who can oversee complex financial matters and generational wealth. Services typically include tax, estate, and trust planning. Experts say services such as business advisory and philanthropy will also be provided.

Experts say the family governance part is important.

Horton said it’s important to find an advisory firm that can serve multiple generations at the same time.

Their expertise extends beyond the technical, financial and administrative aspects of estate and tax planning, trust administration and intergenerational asset oversight, and also includes serving as a “mediator or family therapist,” Horton said.

For example, children may or may not know that their parents have $50 million, and younger generations may or may not inherit that money, he said. The family may need to know about options for establishing a family trust, how to structure it most tax-efficiently, and how to pass it on to their children once they’ve made a decision, he said. Or, in another scenario, how do wealthy entrepreneurs in family businesses pass on leadership responsibilities across generations?

These are emotional situations that advisors have to deal with, Horton said.

Companies don’t necessarily have to provide all these services in-house and can outsource certain functions, but the end result must be “seamless” for the client, Golik said.

Two more important questions to ask your prospective advisor are:

How do you carry out tax and estate planning? Wealth transfer is where a lot of value can be added for advisors to ultra-high net worth individuals, and this question provides insight into whether an advisor understands how to approach this complex issue, Golik said. What is your succession plan? Your prospect is probably meeting with the senior advisor who will lead the team. But this particular advisor may no longer exist in a few years, Golik said, as families will likely employ the facility for the next 30 years or more.

The responses to specific questions provide as much insight as the answers, he said. The best advisors will answer all of these questions, he said, but an advisor who gets defensive probably isn’t the best fit for you.

“Overall, what I want to know is that this is a very professional team that serves clients like me and helps with complex structuring and asset transfers, and they have thought ahead of time for my children, grandchildren, and future generations, and will take care of everything for me,” Golik said. “I want to walk away with that.”