What is a high-net-worth client and how can you win them?

Financial advice can benefit most people, but for high-net-worth (HNW) clients, wealth management may be more useful to preserve their money and reach long-term goals. 

We explore what a HNW individual is, why wealth management is useful, how HNW clients can boost your company in the long run and the best ways to manage these relationships.

What is a high-net-worth individual? 

It can be difficult to define what a high net worth (HNW) individual is. 

Usually, a HNW client has a net worth between £1 million and £5 million in assets that can easily and quickly be converted into cash (known as liquid assets). However, HMRC defines an HMW individual as someone with over £10 million.  

There are different tiers of HNW clients. For example, very high-net-worth individuals tend to have liquid assets of between £5 million and £30 million, while ultra-HNW clients usually have assets above this level.  

One of the essential parts of being a HNW individual is having liquid assets such as cash and shares. Illiquid assets, including property, infrastructure and some types of art, can be hard to sell quickly, and you could lose significant value in the process.  

There are many ways to attain a high net worth, including having a high salary, investing with a diversified portfolio, prioritising savings and curbing excessive spending, and building a healthy pension pot and taking advantage of compound interest. 

HNW individuals may also be more adept at legally reducing tax where possible by taking advantage of individual savings accounts (ISAs) and any tax allowances, for example.  

How many high-net-worth clients exist? 

In the UK, there are currently around 2.86 million HNW individuals, and this is expected to soar to 4.24 million by 2027. 

It’s interesting to note that in Great Britain, net property wealth (the value of all properties minus mortgage debt) was the largest proportion of household wealth at 40% between April 2020 and March 2022, according to the Office for National Statistics. 

This is followed by private pension wealth at 35%, net financial wealth at 14% (the value of savings and investments minus financial liabilities) and physical wealth (the value of vehicles, collectables and household contents) at 10%. 

There’s also a regional disparity in wealth as median individual wealth was £157,000 higher in the South East (the wealthiest region in Great Britain) than in the North East of England. 

On a global scale, the number of HNW individuals reached 22.8 million, and their wealth hit ‘unprecedented levels’ in 2023, driven by a rebound in the global economic outlook, according to Capgemini.  

Why would a high-net-worth individual need wealth management? 

As a HNW client has significantly higher income and more assets to manage, using a wealth manager can be beneficial as they offer personalised financial advice. 

A wealth manager can help a high-net-worth individual manage their investment portfolio, optimise their savings and protect and boost their wealth over time. 

This could include ways to legally reduce tax liabilities by ensuring they use any available allowances or reliefs and by helping to decrease the size of their taxable estate. 

Wealth managers work with individuals with higher incomes and assets, while financial advisers tend to support clients from a broad range of incomes.  

How to win high-net-worth individuals and manage relationships 

If you’re hoping to attract more high-net-worth clients, there’s much to consider. 

First, you should understand what HNW individuals need support with – for example, is estate planning a priority, addressing tax needs or managing various assets? 

When HNW clients seek a personalised service, what do they expect? Some clients may appreciate a quick response to queries, meeting flexibility, or having a wealth manager specialising in specific areas. 

You can then see how your services align with the areas HNW clients typically seek help with and look for ways to optimise your offerings, as well as tailor your marketing strategy to attract your ideal clientele.  

One key way to win high-net-worth clients is by talking to your existing ones. You could encourage referrals and implement a programme to incentivise people to recommend family and friends. You could also reach out to external contacts and set up partnerships with specific businesses to help direct clients your way. 

If you have long-term clients, you can nurture these long-term relationships so you understand and help them reach their financial goals. This also means if your client needs help transferring wealth to their loved ones or need help with estate planning, they’ll be happier to use your services.  

You could also be flexible by encouraging meetings with multiple family members and providing helpful information to younger relatives, as well as running through any specific strategies.  

Referrals can be an effective way to grow your business. A previous World Wealth Report by Capgemini highlighted that 44.4% of HNW clients chose an adviser based on referrals from friends or business contacts.  

Alternatively, you could use a service such as Unbiased Pro to find pre-verified leads. 

Want to work with Unbiased? 

Understanding what HNW individuals need support with, how to add value, and tapping into referrals can help you attract more clients and grow your business. 

Unbiased sends pre-verified leads straight to your inbox and offers many valuable tools you can benefit from when nurturing and converting potential clients.  

Let Unbiased Pro help grow your business today.