The best financial professionals offer regular policy reviews to ensure their clients’ insurance portfolios align with their financial goals. Many high net worth individuals, who are some of the best clients financial professionals can have, are entering a new stage of life that could require policy reevaluation. The next few years will bring a shift in priorities for many of the nation’s elite, and that could necessitate changes in the structure of these high net worth individuals’ financial plans.
No matter how wealthy a person is, the need to preserve wealth and maintain a healthy income into retirement remains. As today’s high net worth individuals leave the working world, they will want to ensure that their savings remain intact for their loved ones. Financial professionals can be a trusted source of guidance during this transition from work into retirement.
Why wealthy clients are important
Every financial professional should seek out high net worth clients whenever possible. These individuals are often very loyal to an effective insurance producer and have a diverse range of needs that make financial planning a critical part of their financial life.
In an article for Forbes, contributor Russ Allan Prince noted that high net worth clients offer many benefits, including the opportunity to network with other high-value consumers. These clients have the greatest need for financial advisors, and are willing and able to pay for services they feel are beneficial. Additionally, these consumers exist in a network of people who share similar means. If a financial professional can demonstrate value to one high net worth client, it is possible that their reputation will be communicated to other wealthy consumers.
This increases the potential yield for these financial professionals, because these clients will purchase whatever products provide a route to their financial goals, and it establishes the financial professional’s practice as a trustworthy source for high net worth people and those with more limited savings.
High net worth individuals provide a long-term source of revenue for financial professionals, because they need a wide range of services and their needs change over time. Today, many high net worth individuals are on the cusp of a change in their financial planning needs, and financial professionals can both retain existing clients and gain new ones by reviewing these individuals policies for potential changes.
The changing needs of high net worth individuals
The wealthiest people in the country are nearing retirement age, and a change in lifestyle brings a shift in financial planning needs. According to a new survey from UBS, Billionaires: Master architects of great wealth and lasting legacies, almost 66 percent of high net worth individuals are over the age of 60. That means that this group may shift its energies toward sustaining wealth rather than accruing more. Financial professionals should work closely with their high net worth clients who are nearing retirement and conduct deep policy reviews with an eye toward maintaining wealth and consistent retirement income.
UBS points out that philanthropy will be a top concern for many of the high net worth individuals who are wrapping up their time in the working world. This presents a specific opportunity for financial professionals who can illuminate the different ways insurance policies allow high net worth individuals to avoid the burden of estate taxes while also focusing on charitable giving. By addressing client needs as a partner, financial professionals can make high net worth individuals’ financial goals a reality while still preserving the maximum amount of wealth.
UBS highlighted the need for high net worth indiviudals to draft clear strategies for wealth management, to avoid the dilution of their estate in the years to come. A high net worth client’s goals today are not going to be the same as their goals in a few years, and financial professionals need to keep pace with changing expectations.
Latest posts by Highland Capital Brokerage (see all)
- April 2018 LTC Newsletter - April 26, 2018
- Robert W. Finnegan, J.D., CLU®, Published in Trusts & Estates Magazine - April 18, 2018
- Keys to Dealing with Policy Loans - March 26, 2018