The Woes of Planning for the High Net Worth

The Woes of Planning for the High Net Worth

The more we consider the attendant difficulties, the more extreme wealth takes on the aura of a curse.

Key Private Bank recently released its survey of 130 advisors who regularly service high-net-worth families, concentrating on estate planning. For advisors, HNW clients are often the holy grail of investor classes. Sadly, as in the case of other high-powered fantasies, like rock star or fighter pilot, the more you delve into it, the less appealing it seems.

Perhaps we exaggerate – serving a HNW clientele remains a rewarding business path. It’s just so darn difficult sometimes – first and foremost, because you’re dealing with complex family dynamics that are hard to decipher. In the financial advisory business, miscommunication often leads to tears, if not lawsuits.

Lack of interfamily communication often means that no financial plan is in place – this was named by advisors as the biggest mistake made by HNW clients. Failure to keep documents updated to reflect changes in life and business came next. Finally, many HNW individuals place too much trust in their will – the legal document, not their inexorable drive to achieve – as an estate planning solution. On this point, they are seriously mistaken.

The problem is, they just don’t talk, these wealthy clans. Advisors must step up and make the conversations happen. The survey found that in 66% of cases, the untangling of complex family affairs, made that way by neglect, was started at the prompting of advisors. The next leading stimulant of family dialog was the occurrence of a major life trauma. This leads one to wonder, in just how many cases, this response came too late.  

For more information, please read:
The Hardest Part of Planning for HNW Families Is HNW Families | Wealth Management


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