Wealthy Investors Want More Complex Services: Cerulli

Investable assets held by high-net-worth households in the United States have surged by more than $23 trillion since 2011, and advisory firms have rapidly grown their service offerings aimed at this demographic, Cerulli Associates reported Tuesday.

Services now outweigh personal relationship factors when it comes to bringing new clients on board. Thirty-five percent of high-net-worth individuals in Cerulli’s study said they had begun a relationship with their primary advisory provider because of either the services or the client experience on offer, compared with 28% who said this in 2017. 

In addition, since 2017, every category of service offering has become more commonplace to meet enhanced client expectations and needs, according to Cerulli data.

High-net-worth practices have significantly grown their investment service offerings in the past six years, including 78% that have increased alternative manager search and selection and 32% that internally managed hedge funds or funds of funds.

Cerulli recommends that as clients clamor for alternatives, asset management and technology providers explore how they can use their existing capabilities to enter this market. They can provide greater access to education, improve diligence or analytics capabilities or offer a fund with differentiated price, performance or exposure traits.

Among planning services, Cerulli found that all high-net-worth practices now offer financial planning as a primary or secondary service. In 2023, as clients prepared for wealth transfers and transitions, the fastest-growing services areas were estate planning, offered by 70% of firms in the study, up from 56% in 2017, and tax planning, offered by 45% of firms, up from 29%.