As Benjamin Franklin once quipped, one of the only certainties in life is taxes—and individuals with a high net worth are painfully aware of this inevitability. However, with private wealth management provided by financial advisors, high net worth people are often able to mitigate their tax burdens and implement financial strategies to grow their wealth.
But what exactly constitutes a high net worth individual, and what exactly is private wealth management? How can you reap the benefits of wealth management? What should you expect when working with a high net worth financial advisor? What net worth advice is worth taking? Here at Delta Wealth Advisors, we’ve compiled this comprehensive guide to high net worth advisors and wealth management to answer these questions and more.
What Is Considered High Net Worth in 2022?
A high net worth individual is someone with liquid assets over a certain threshold. Liquid assets are the only assets that are included in the net worth calculation process. These include any asset that can quickly and easily be converted to cash. The high net worth individual definition can be broken down into three categories:
- Ultra high net worth individuals - holding liquid assets over $30 million.
- Very high net worth individuals - holding liquid assets between $5 million and $30 million.
- High net worth individuals - holding liquid assets between $1 million and $5 million.
So, what net worth is considered high net worth? Essentially, any individual who has liquid assets that are greater than $1 million falls into this exclusive category.
What Is Private Wealth Management?
Private wealth management is when a financial advisor develops and implements specific strategies in order to achieve individual financial goals. High net worth financial advisors can assist with services like:
- Financial planning
- Retirement planning
- Portfolio management
- Estate planning
- Charitable giving
Typically the ultimate goal is to grow your net worth, and make sure that you are on sound financial footing for today and tomorrow. Here at Delta Wealth Advisors (DWA), we take a different approach to private wealth management. We take a more comprehensive approach by offering the entire range of services, answering clients’ questions about taxes, real estate, small businesses, and more. Our holistic approach considers your entire net worth, as we:
- Utilize an evidence-based investing approach
- Construct portfolios using proven, risk-based investments
- Continuously monitor your investments and maintaining liquidity when needed
- Focus on rules-based, low-cost investments
- Incorporate tax-minimization strategies
What Is the Process of High Net Worth Wealth Management?
In general, a wealth advisor will take the following steps to help you determine and implement your wealth management strategy.
- Discussing your current financial standing and reviewing your assets
- Identifying your financial goals, including top priorities
- Creating a comprehensive, custom strategy to reach those goals
- Implementing the strategy once approved
- Monitoring the outcomes and adjusting as necessary
It is important to find a high net worth financial advisor who takes the time to understand your needs and wants. After all, the way you invest your money makes a big statement. Here at Delta Wealth Advisors, many of our clients are seeking investing opportunities that are socially conscious. We’re passionate about assisting people with making their investment decisions an extension of their values by providing a diverse range of charitable investment options.
Wealth Manager vs. Financial Advisor: What’s the Difference?
All wealth managers are financial advisors, but not all financial advisors specialize in wealth management for high net worth individuals. However, some wealth managers use the term “high net worth financial advisor” or just use the general term “financial advisor” to describe their services. Wealth management is a subset of financial advising, and one that focuses on clients whose assets are above a certain threshold. Just like financial advisors, wealth managers offer a broad range of services, like financial, retirement, and estate planning with a special emphasis on growing wealth.
At What Net Worth Do You Need a Financial Advisor for Wealth Management?
In general, you should meet the criteria for a high net worth individual to be able to get the most out of the wealth management process. The $1 million and up threshold is a good guideline to know if high net worth wealth management professionals will be open to working with you.
At Delta Wealth Advisors, you’ll see four main pillars of our wealth management process:
1. Financial Planning
We’re not ones to “set it and forget it.” Frequent communication and flexible options are vital, especially with the ever-shifting economic landscape. Our approach to financial planning is firmly rooted in our deep experience—we’ve seen similar problems and opportunities before and can present you with multiple options for moving forward. You’ll get sound, unbiased financial planning with goal-based decision-making to build your net worth.
2. Investment Management
It’s time to think beyond stocks and bonds. After all, why limit opportunities to grow your wealth? With a broad range of investment opportunities—and of course, one eye on how taxes come into play—we extend beyond the basics to find the investment approach that works best for your individual needs.
3. Tax Services
With taxes, it’s important to mitigate risk and avoid surprises. And that’s exactly why we develop structured tax plans to help you with your taxes. With our experienced CPAs and business tax professionals, filing tax returns is a breeze as we work diligently to minimize your tax liabilities.
4. Private Real Estate
As part of our diverse offering, our investment population includes real estate. This expanded set of investment opportunities is sourced and vetted by our professionals, saving you time and effort. We have a variety of real estate investments with different returns and risk, and we carefully and intentionally match the right style to your portfolio.
Do High Net Worth Individuals Use Financial Advisors for Wealth Management?
Yes, many high net worth individuals use a financial advisor also known as a wealth manager for their finances. After all, handling investments and complicated financial matters takes a lot of time and expertise, as well as specialized knowledge. Using a high net worth financial advisor is an excellent way to make sure your money is actively being used to work towards your goals.
What if My Net Worth Does Not Meet the Threshold Now, but Will in the Future?
All earners can benefit from the advice from an experienced financial advisor. A wealth management approach is most beneficial to high net worth individuals. If you are a professional or business owner with a plan for growth and high earning potential, look to the future and start planning now. That’s why we established our Trailblazer Path here at Delta Wealth Advisors. Designed for people who are mid-career entrepreneurs and professionals, this service will help your bright future be realized.
What Is the Average Wealth Management Fee?
There are several different fee structures for wealth management. It is best to conduct wealth management fees comparison. The most common types of fee structures for financial advisors are:
- Assets under management (AUM) - In this structure, you pay a percentage of the money that is being managed. This percentage ranges from 0.25% to 1% per year. This is the most typical arrangement for wealth management fees.
- Flat annual fee - Also known as a retainer, this is a lump sum that is paid yearly. Averages range from $2,000 to $7,500 for typical financial advising.
- Hourly fee - Financial advisors generally charge anywhere from $200+ for their hourly services. With the amount of time and effort that goes into wealth management, it’s probably best to avoid hourly fee structures.
- Per-plan fee - Some financial advisors offer individual plans and charge per strategy. This will usually range from $1,000-$3,000 per plan.
At Delta Wealth Advisors, our fee structure is comprehensive and unbiased. We have a net worth based fee to remove conflicts of interest and clear the path to your financial goals. Built into the fee is a number of hours dedicated to accounting and tax services. However, in the event that the time required to plan, prepare, and file annual taxes exceeds the allotment, we do offer our clients a discounted rate on our tax services.
Our fee structure for wealth management is:
|Tax Hours Included
|Personal Tax Return + 5 hours
|Personal Tax Return + 10 Hours
|Personal Tax Return + 15 Hours
For our Trailblazers Path, the fee structure is:
|Tax Hours Included
Is High Net Worth Wealth Management Worth It?
When looking at fees, a common question to ask yourself is, “Is it worth paying a financial advisor as a high net worth individual?” The answer comes down to your personal needs and financial goals. If you are someone who has the time and knowledge to manage your own finances, you may not want to spend money on wealth management. However, for many high net worth individuals who are leading busy, fulfilling lives, spending time learning the ins and outs of investing, financial planning, portfolio management and more—many people choose to eliminate this headache and hire a professional. Hiring a high net worth financial advisor can be a transformative decision that simplifies your life and helps you get to where you want to go.
How To Find the Best High Net Worth Wealth Management
Rather than waste your time searching for terms like “top private wealth management firms,” wondering if you’re going to find a trustworthy and experienced financial advisor, consider hiring us at Delta Wealth Advisors. With knowledge gained from over 200 years combined experience in finance, taxation, and net worth management, our professionals are ready to address your unique needs from every angle. We’re ready to help you increase and protect your wealth for today and years to come. Ready to grow together? Click the big green button on our website to schedule a call.