John Nersesian, Head of Advisor Education for PIMCO, joined Keith Black, Managing Director of RIA Channel, to discuss the complex needs of high-net-worth clients.
Rather than naming a dollar figure, such as $10 million or $25 million, Nersesian defines high-net-worth investors based on the complexity of their financial situation. Having greater wealth comes with the responsibility of growing and protecting assets and building a plan for distributing those assets. The role of advisors is to make wealth and investing less stressful.
In order to serve high-net-worth investors, advisors need to demonstrate competency in areas such as family governance, equity compensation, asset protection, charitable giving, tax, and estate planning. Nersesian notes that empathy is just as important as competence, where clients believe that advisors truly care about them and the issues that are most important to them.
High-net-worth investors desire personalized and customized advice, rather than the model portfolios typically offered to mass affluent investors. These investors want access to unique investments that play a specific role in the portfolio or financial plan.
There comes a point in life, perhaps when an investor reaches a specific age or achieves a certain net worth target, when they seek to define their legacy. Once it is clear that the personal financial goals are met, the focus turns to charitable giving and providing for others. Giving should benefit the recipient, while increasing the personal connection between the donor and the cause. A CEG survey revealed that over 80% of high-net-worth investors seek guidance and education on how to make charitable giving more effective, yet only 20% have discussed this need with their advisors.
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