How to Find a High Net Worth Financial Advisor

Those who qualify as high net worth individuals (HNWIs), which is usually those with liquid financial assets of $1 million or more, may benefit from a special type of financial advisor who caters to such clientele. High net worth financial advisors can provide assistance tailored to the needs and interests of high net worth individuals, such as asset protection, charitable giving and estate planning. Finding a high net worth advisor skilled in working with high net worth individuals starts with understanding your unique needs and requirements as a HNWIs. After that, it’s a matter of getting referrals and vetting potential advisors to ensure they’re suited to your financial situation. Whether or not you’re a HNWI, a financial advisor can be of assistance to anyone interested in making better financial decisions.

High Net Worth Advisor Basics

The financial services industry generally defines a high net worth individual as anyone with liquid assets of $1 million or more. Liquid assets typically include checking and savings accounts, securities such as stocks and bonds, and shares of mutual funds and exchange-traded funds. The value of other assets, such as real estate, vehicles and collectibles, probably won’t be included when determining whether someone is considered a HNWI.

Financial advisors help clients with all sorts of financial concerns, including budgeting, debt repayment, investment management, saving for retirement, paying for college and more. Some financial advisors are fiduciaries, which means they must put their clients’ interests above their own.

Many financial advisors have minimum investment requirements, which may range from a few thousand to hundreds of thousands of dollars. Advisors who specialize in serving high net worth clients tend to have minimums on the high end of this range. High net worth advisors are usually able to offer some more specialized strategies and benefits to their clients:

• Asset protection to help clients who have accumulated significant wealth protect their assets against loss.
• Philanthropy, such as using charitable trusts and private foundations, to effectively support worthwhile causes.
• Estate planning to allow affluent individuals to create legacies and direct the disposition of their wealth.
• Tax management to minimize liability with strategies such as tax-loss harvesting to offset capital gains.
• Advanced investment strategies, to maximize returns and minimize risk, perhaps including hedging and options.
• Succession planning to help clients who own businesses and want to prepare the next generation of owners.

Finding a High Net Worth Advisor  

High net worth individuals can follow this step-by-step process to find an advisor best suited to their financial situation:

1. Assess your needs. First, make sure you meet the usual definition of a high net worth individual by having $1 million or more in liquid assets.
2. Decide what type of financial advisor you want. Advisors can be split into three broad categories:
   • Independent financial advisors may typically attract less-affluent individuals due in part to relatively low fees and modest minimum investment requirements, but some offer the same services as an advisor focused on HNWIs.
   • Wealth management firms are more likely to restrict their client base to HNWIs, whose needs they address with a team of professionals including financial planners, accountants, tax specialists and attorneys attuned to the special requirements of affluent individuals. They will often have higher minimum investment requirements and charge higher fees.
   • Family offices offer many of the same services as wealth management firms, but typically work with a single HNW family or a small group of families. They may provide boutique services such as lifestyle management in addition to more typical offerings such as investment, estate, tax and philanthropic planning.
3. Get referrals. Friends, family and professional colleagues can be a great source of referrals. For a more structured approach, financial advisor-focused referral services such as SmartAsset can help. SmartAsset can provide curated lists of top financial advisors in the nation, by state and in many cities. Large financial service companies such as Fidelity, Schwab and Vanguard also have their own in-house financial advisors, many of whom specialize in HNWIs.
4. Vet your selections. After gathering your referrals, check their credentials, as well as to see if any have been involved in investigations or disciplinary actions using FINRA’s Broker Check or the SEC’s Investment Advisor Public Disclosure.
5. Interview for details. Sit down with your candidates and ask them about their business and what they can do for you. Suggested questions include:
   • Are you a fiduciary?
   • What certifications do you hold?
   • How many years of experience do you have?
   • How are you compensated?
   • Are you fee-based or fee-only?
   • Do you charge performance fees or other fees?
   • What is your minimum investment?
   • Do you specialize in HNWI clients?
   • Do you specialize in any type of financial advice or services?
   • What is your philosophy toward investing?
   • How often do you meet with your clients?
   • Have you been the subject of any regulatory discipline or other actions?
6. Be sure you understand the costs you will be charged. Try to be confident that you understand whether the advisor gets money from investment providers or will only be compensated by fees you pay. Nail down the percentage of assets under management you’ll pay, as well as other fees for services such as creating a financial plan and managing a portfolio.

When you’ve identified and vetted your candidates, you may want to select the one with whom you feel is the best communicator, has the best investment record or offers the best value on costs. Be sure to read the client agreement carefully and clarify any questions before signing.

Red Flags to Watch for When Choosing a High-Net-Worth Advisor

Knowing the right questions to ask is a good start. Knowing what the answers shouldn’t sound like is just as important. High-net-worth individuals are often targeted by advisors and firms that prioritize their own revenue, and the financial impact of a bad fit is proportionally larger when the portfolio is bigger.

One thing to watch for is an advisor who consistently steers you toward proprietary investment products. Some firms offer their own mutual funds, structured notes, or alternative investments that generate additional revenue for the company beyond the advisory fee. There’s nothing inherently wrong with proprietary products, but if they’re the only options being presented without any comparison to outside alternatives, it’s fair to ask what the fee difference is and why nothing else was considered.

Vague answers about total costs are another concern. A trustworthy advisor should be able to lay out every fee you’ll pay, including the advisory charge, fund expense ratios, transaction costs, custodial fees, and any performance-based or incentive fees. For a high-net-worth portfolio, even a fraction of a percentage point in hidden or unstated costs can add up to tens of thousands of dollars a year. If a clear cost breakdown is hard to get, that tells you something.

Be cautious around complexity that doesn’t come with a clear explanation. Hedge funds, private placements, structured products, and other alternative investments can play a role in a larger portfolio, but they should be tied to a specific purpose in your plan. If an advisor recommends products you don’t fully understand and can’t clearly explain why they’re a better fit for your situation than simpler options, the complexity may be generating fees rather than solving a problem.

Pay attention to how an advisor responds when you mention your other professionals. A high-net-worth financial life usually involves a certified public accountant (CPA), estate planning attorney, insurance advisor, and sometimes a business attorney. An advisor who welcomes coordination with these people and sees it as part of the process is a good sign. An advisor who resists sharing information, avoids collaboration, or wants to control every financial decision without outside input may be protecting their role rather than serving your interests.

At larger firms, it’s also worth asking about continuity. If your primary advisor leaves the firm or gets reassigned, what happens to your account? Frequent turnover or a rotating point of contact means you’re regularly re-explaining your situation to someone new, and the quality of your plan can suffer as a result. Asking about advisor retention and the firm’s succession process for client relationships is a practical step that can prevent frustration down the line.

Any claim that sounds like a guarantee should be treated as a serious warning sign. No legitimate advisor can promise a specific rate of return or guarantee that a strategy will protect you from losses. Markets are inherently uncertain, and anyone who presents otherwise is either being misleading or doesn’t fully grasp the risks involved in what they’re recommending. Past performance, no matter how strong, does not predict future results, and any advisor who implies that it does is not being straightforward with you.

Bottom Line

High net worth individuals often have unique needs when it comes to their financial affairs, and can benefit from specialized high net worth advisors. These advisors may have higher minimum investments and provide services that go beyond those supplied by typical financial advisors. HNWIs are likely to want help with asset protection, estate planning, tax management and other concerns, in addition to the budgeting, debt management and retirement saving that are the bread and butter of other financial advisors.

Money Management Tips

• If you need help managing your finances, a financial advisor can guide you in creating a financial plan based on your goals and needs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Use SmartAsset’s Federal Income Tax Calculator to estimate your tax liability for the current year.

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