Real Talk With Rias: Considering Moving Upmarket? Here Are Some Issues to Consider

Executive summary:

Many Registered Investment Advisors aspire to target wealthier clients
These clients often have unique needs that require more than simple asset management
Your strategy and service model needs to evolve to meet their more complex situations

Many independent firms and Registered Investment Advisors aspire to move upmarket, targeting wealthier clients who demand more sophisticated financial solutions.

It is a highly desirable segment of the population. According to the USA Wealth Report 2024 by government advisory firm Henley & Partners¹, the U.S. has more than 5.5 million millionaires with at least $1 million in liquid investable assets.

But the challenge is that few advisors have been able to capture that business. On average high net worth (HNW) individuals represent only 14% of investment advisors’ practices.²

The issue is that HNW clients have greater needs, more complex portfolios and most of all, appreciate personalized service. This represents a huge opportunity. Surveys have found that only 30% of HNW investors are satisfied with the level of personalization they currently receive in their wealth management relationship.³

That leaves a big opening for RIAs or boutique firms to attract high-net-worth investors.

So a good question to ask yourself if you want this business is: Has your investment philosophy and service model evolved to meet their expectations; or are you still operating with the same approach that worked for mass-affluent clients?

If you want to attract and retain more HNW clients, your strategy needs to reflect their unique needs. Here’s how to ensure your value proposition and investment philosophy are aligned with the clients you truly want to serve:

High-net-worth clients have different needs and expectations

Affluent clients expect more than just solid investment performance. Their priorities extend far beyond basic asset management:

Tax efficiency matters more than ever - Many of these clients care deeply about minimizing their tax liability through strategies like tax-loss harvesting, direct indexing and charitable giving. They are also concerned about unwinding large security positions and real estate investments that may have helped build their wealth.
Customization is non-negotiable - A simple Exchange-Traded Fund (ETF) or mutual fund solution may not be enough. They expect bespoke portfolio construction tailored to their specific financial goals.
Holistic wealth management is the standard - Investment returns are just one piece of the puzzle. They expect expertise in estate planning, philanthropy, business succession, and legacy planning and need help bringing all the experts in their lives together to work as a cohesive team.

Your value proposition needs to speak their language

If your messaging is still centered around “retirement planning” or “401(k) rollovers,” you may not be resonating with the clients you aim to attract. Consider these questions:

Does your brand position you as a true wealth strategist or just another advisor managing assets?
Does your client experience feel “high touch”, exclusive, and tailored to affluent individuals?
Are you articulating the deeper value you provide beyond investment management?

Moving upmarket requires a shift in how you communicate your expertise and the level of service you provide.

Evolving your solutions and services

If you want to work with wealthier clients, your service model must evolve to match their expectations:

Enhance Your Service Model:
- Offer a concierge-level experience with proactive planning and white-glove service.
- Consider a family office-style approach to provide comprehensive wealth management.
Build Strategic Partnerships:

- Either bringing in house or partnering with estate attorneys, tax professionals, insurance and health care providers, and business consultants to deliver a full-service wealth strategy.

Is your investment philosophy aligned with these expectations?

Advisors often talk about moving upmarket, but many continue using the same investment strategies designed for mass-affluent clients. Here’s where you might be falling short:

Are you offering personalized solutions that go beyond a one-size-fits-all portfolio?

Are you still relying on standard mutual funds, Exchange-Traded Funds (ETFs) and Separately Managed Accounts (SMAs) when HNW clients seek access to private equity, hedge funds, and alternative investments and the ability to customize their passive strategies?  Some turnkey strategies will remain very relevant to your high-net-worth clients, but understanding how more complex strategies might offer a specific solution to a particular life problem.

You might consider enhancing your investment philosophy and approach:

- Incorporate private equity, hedge funds, real estate, and structured products.
- Implement tax-aware strategies and custom portfolio construction such as direct indexing.

Does your approach consider advanced risk management, tax-efficient investing, and capital preservation strategies and cash management strategies that provide leverage and agility?

If the answer is no, it may be time to rethink your approach.

Are you actually ready for wealthier clients?

The desire to move upmarket is common, but the execution is what sets successful advisors apart. If your investment philosophy, service model, and value proposition haven’t evolved, you may not be as ready as you think.

The most successful advisors don’t just declare their intent to serve wealthier clients—they transform their entire approach to match.

So, ask yourself: Where do you need to evolve? What changes will you make to truly align with the clients you want to attract?

¹https://www.henleyglobal.com/publications/usa-wealth-report-2024

²(Disruptors: Deloitte Study. Chart: Source: Statista- May 2023)

³As the high-net-worth seek out new wealth managers, how do you retain clients and capture money in motion (PWC Dec 2022)

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