To Win HNW Clients, Consider an Unbundled Advisory Model That Delivers Objective Oversight
To attract high-net-worth clients, independent advisers need to clearly explain how their team combines coordinated functions with objective external oversight to ensure full independence for the client, not just the firm.
As we near this summer's 250th anniversary of America's creation, the independent spirit is strong. It's certainly creating more millionaires, a number that has doubled since 2020.
The next-level wealth is out there, too, with Forbes reporting that $1.17 million to $2.7 million in net worth puts someone in the nation's top 5%.
For independent advisers seeking more of these HNW clients, the opportunity — and challenge — is clear: How do you stand out in a landscape crowded by banks, major wire houses and other independents?
There's a reason you became an independent adviser, and that needs to show; it's your unique brand and core values. But just as important, how does your independence benefit the high-net-worth client?
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Full-service integration is key, but there's a distinction between internal* and external professionals who can add to your advisory services. When you outright explain that distinction and its benefits to the client in front of you, you can win business with clarity and conviction.
What high-net-worth clients want (and expect)
High-net-worth clients rarely deal with simple planning issues. Their lives often include closely held businesses, trusts, estate questions, charitable goals, tax complexity and family dynamics across generations.
They need more than investment management. They need advice that fits together across legal, tax and financial decisions.
Generally, firms are making two main choices: Either bringing legal and tax professionals into the same office,* or relying solely on external legal and tax professionals to supplement the firm's core comprehensive (Income, Investments & Wealth Management, Tax, Health Care & Wellbeing and Estate & Legacy) financial planning services.
Types of Integration
As many independent firms grow, there is often a desire to add services internally* that were once external. Advisers will choose to bring legal and/or tax professionals together in the same office* to have a differentiator, a potential advantage over those who do not.
"Comprehensive financial planning" can be marketed as a convenience for clients, who can meet with all their financial professionals in the same office, perhaps on the same day — a total experience held under common ownership, control and operation.
For external integration, advisers choose to maintain traditional comprehensive financial planning functions while using separate tax and legal professionals outside the firm, working with them in ongoing relationships to serve the same client.
This can offer an unbiased perspective and oversight from outside the firm, as well as a similar level of integrated services (given well-defined external relationships).
Internal vs external integration
The appeal of the internal model* is easy to understand. A firm can coordinate and collaborate tax and legal functions (with proper verbal or written authorization) in a streamlined process and offer clients one office, one team and one brand. That sounds efficient and marketable.
But advisers should be honest about a potential tradeoff. Convenience is not the same as independence. When one firm controls investment, tax and legal planning, the client may get a seamless experience, but not enough independent outside oversight.
When the other disciplines, be they tax or legal, answer to the wealth management leadership, they often become beholden to them. Advice may still be coordinated and collaborated, but it's not independent when the same firm wears multiple hats, creating new, unnecessary liabilities and conflicts of interest for the firm and its clients that a true independent model avoids.
That is where an unbundled model can stand apart. The external integration model does not mean working alone. It means the client benefits from independent professionals across key disciplines.
In practice, that often means the adviser coordinates and collaborates (with proper verbal or written authorization) the overall strategy, while outside attorneys and tax professionals provide legal and tax guidance.
Those external professionals are not held under common ownership, control or operation of the financial adviser. They are free to agree, question or push back based on their own professional judgment. That creates checks and balances.
That is not fragmentation. It's coordination and collaboration.
True independence
Many advisers chose independence for good reasons. They wanted to move away from quotas, product pressure, cross-selling and centralized control. They wanted more freedom to serve clients well.
Yet some firms slowly rebuild the same structure they once rejected. They add departments, bundle services and create an internal system that starts to resemble the big institutions they left behind. The branding looks different, but the operating model feels familiar.
That should raise a hard question: Are you truly independent, or have you re-created a smaller version of the same model?
This is not a knock on growth. It's a warning about drift. If every professional involved in the client relationship is held under common ownership, control and operation, your model may be less independent than your messaging suggests.
Labels and messaging to attract HNW clients: Don't muddy the waters
Many high-net-worth clients meet advisers through various channels, including referrals, ads, seminars and centers of influence in their phone's social scroll.
The advisers they see in these channels often label and market their HNW services in many ways. Independent advisers often adopt titles such as "family office," "integrated wealth manager" or "private client services."
The trouble? These labels can mislead.
For example, "family office" is legally defined by the SEC as a firm that:
- Provides advice only to family clients (lineal descendants and certain key employees)
- Is wholly owned and controlled by family members or family entities
- Does not hold itself out to the public as an investment adviser
Most independent firms don't meet this definition, which can create confusion.
"Private client" was originally a bank term denoting exclusivity and white-glove service, but that doesn't necessarily describe integration.
Ultimately, it can be helpful to drop titles that don't fit. Instead, consider terms like "high-net-worth services" or "integrated wealth management."
More importantly, take time to explain your actual process. Explain exactly how your teams, internal and external, actively coordinate and collaborate for the client's benefit across their financial spectrum.
The HNW takeaway
In an industry where terminology can cloud the picture, the advisers who win are those who clarify how their assembled team delivers real integration. They do this with transparency and client-first planning.
Ultimately, clients need a planning structure and professionals who can work together for them, combining coordination and collaboration with objective review and oversight. That's the real message. True independence means independence for all involved, including the client.
If you can explain that plainly in the high-net-worth world, you offer something many firms do not.
* Tax Services (tax advice, tax returns & forms preparation & filing) and Estate Planning Services (legal advice, estate planning legal document preparation & execution) may be housed in the same or nearby office. However, they must be separate legal entities from your investment advisory and/or insurance practices (i.e., they may be held under common ownership, control, or operation).
Related Content
- How Advisers Can Establish Relationships With HNW Prospects
- Serving the HNW Market: How Financial Advisers Can Break Through and Deliver Lasting Value
- How Financial Advisers Can Build Retiring Clients' Confidence
- What the Great Wealth Transfer Means for Financial Advisers
- How Financial Professionals Can Build Trust With Clients
