Why high-net-worth individuals need good financial advisors

Canada’s high-net-worth (HNW) group of individuals accounts for roughly one percent of the total population, where each individual has USD 1 million or more of investable assets.

According to a Wealth Report from Capgemini/Merrill Lynch Global Wealth Management, Canada is home to 320,000 HNW individuals that contribute a cumulative wealth estimated at USD 979 billion. Due to the size of their assets, and complexity of their financial portfolio, it is recommended that HNW investors attain services of expert wealth management professionals to help them manage their portfolio.

Many HNW Canadians realize that their approach to personal finance has not kept pace with their rising net worth, and the group has drawn a number of professionals committed to helping them manage their money.

It is advisable that HNW individuals hire an organization that offers a complete solution to managing their wealth under one roof. Instead of hiring different experts to manage different types of assets, one of the easiest ways to access wealth management expertise is to hire a company that can offer comprehensive services for a diverse portfolio. At these firms, a client is typically assigned a dedicated advisor to meet their financial and investment needs. Other professionals within the firm are consulted as needed.

Also, in order to further enhance their portfolio, HNW individuals will need advice from experts on how to invest their wealth. A person with $1-million in investable assets is no longer limited to stockbrokers and advisers selling mutual funds. They should also take advantage of the money management expertise available from portfolio managers (also known as investment counsel).

Alexandre Viau, vice-president of Private Banking 1859 at National Bank states, “Financial planning is a detailed, comprehensive process that requires hands-on experience and a strong technical understanding of the issues involved.” He also mentions, “With high-net-worth and ultra-high-net-worth individuals, financial planning can be especially complicated, not only because of the significant size of their assets but also because of many of them have businesses, multiple homes, and extended families.”

However, it is understandable that investors may have a hard time picking the right financial advisor, specific to their financial investing needs. During the adviser selection process, it is recommended that investors ask all questions necessary that they feel the need to. Because the advisor and their firm are going to manage an HNW individuals’ entire portfolio, it’s essential that they feel confident in their selection. Each investor is different, including with respect to the time it takes for them to commit to a trusted adviser relationship.

No matter the chosen approach to seeking advice, HNW individuals should begin with a financial game plan. A qualified financial planner will work with a client to prepare a customized financial plan designed to achieve the client’s personal life goals. A good planner will also identify areas where clients would benefit from additional advice.

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