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Financial Advice for High Net Worth Individuals

More money, more problems…right? Well, not so fast. While you might expect your growing portfolio to attract a wide variety of challenges and difficulties, the right net worth advisor can help you make smart decisions based on reliable information and a nuanced understanding of the unique needs of high net worth individuals (or HNWIs).

This blog aims to answer some of the most pressing questions that come with high net worth wealth management, including:

  • What constitutes a high net worth individual
  • What services a high net worth financial advisor can provide
  • What to look for in a high net worth financial advisor

What Is Considered a High Net Worth Portfolio?

While there is no official, legal definition, per se, a high net worth individual is generally considered to be someone who holds liquid assets worth at least $1 million. In this context, the term “liquid assets” refers to cash, of course, as well as any other assets that could be turned into cash without losing value. It’s also worth noting that a given asset’s liquidity exists on a spectrum, meaning some assets are considered more liquid than others (depending on how much value is retained/lost when converted to cash). As an HNWI, your portfolio might include liquid assets in the form of 

  • Cash
  • Checking or savings accounts
  • Money market accounts
  • Mutual funds or retirement accounts
  • Some bonds, certificates of deposit (CDs), and stocks

It might also help to describe what assets are not considered liquid. This includes things like real estate, automobiles, or other valuable personal items that are difficult to quickly liquidate and/or subject to depreciate in value over time.

Why Do High Net Worth Individuals Use Financial Advisors?

High net worth individuals rely on financial advisors to help them better understand their financial picture, from a holistic perspective as well as a detailed breakdown. By helping and educating their high net worth clients, a good financial advisor empowers HNWIs to make better decisions to optimize their portfolio and make informed, productive decisions moving forward. In other words, the ultimate goal is to help their clients maintain, grow, and/or protect their assets.

There are four common areas high net worth financial advisors specialize in:

  • Estate Planning: To help you achieve peace of mind that, in the event of your death, your assets will be properly distributed amongst your loved ones. 
  • Income Tax Planning: To help you better understand relevant details of income tax laws, so you can reduce your income taxes without violating any laws.
  • Retirement Planning: To help you make the best decisions for how your retirement account is allocated and invested, so that the best strategic decisions can be made to maximize the plan’s value over time.
  • Multigenerational Wealth Planning: To help you develop an effective approach to protecting your various assets and minimizing the tax issues for those who stand to inherit elements of your portfolio.

What Are the Benefits of Financial Planning for High Net Worth Individuals?

For individuals with a high net worth, benefits of working with a financial advisor include:

  • They can help you better understand the big picture of your wealth portfolio, including its challenges and opportunities, as well as the finer details of specific elements.
  • They can examine your entire portfolio to develop wealth management strategies that will protect your assets, minimize your tax burden, and limit your exposure to creditors.
  • They can help you make the best decisions today to maximize your investments for the future, through strategies like more aggressively investing during your working years.
  • They can develop generational planning strategies to ensure your wealth is fairly distributed to your heirs (as well as charitable giving), without subjecting their inheritance to any surprise tax hits.

The list of benefits could certainly go on, but at the end of the day, a high net worth financial advisor simply works to:

  1. Understand your portfolio, goals, and priorities.
  2. Suggest, develop, and help implement strategies for maximizing assets’ value.
  3. Ensure that generational and estate planning will properly distribute assets at the appropriate time.

Talk to Delta Wealth Advisors Today

With decades of experience, our team stands ready to help you make the best possible decisions for your current and future financial goals. For personalized strategies to protect and grow your assets, use the button at the top of our website to schedule a call today!