How Advisors Can Win UHNW Business and Build a Service Offering for Wealthy Clients

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Written  by Jeff Coyle | Libretto

In today’s competitive landscape, financial advisors striving for organic growth must ask an important question: How can we win more than our fair share of business? The answer is simple: deliver better advice.

When it comes to winning UHNW business, advisors can either lead with services, or they can lead with advice. It’s a common misconception that advisors need to have in-house experts on tax, estate planning, philanthropy, and other services to compete in the ultra-affluent space. It’s actually more differentiating to offer an advice-first delivery, functioning as a “wealth strategist” who quarterbacks a team of external experts to address the client’s unique needs. We’ll call this a “virtual family office” delivery model.

It's possible for advisors to move upmarket and serve more affluent clients without completely redesigning their practices. But how do they get started? Advisors can:

  1. Elevate the sophistication of their advice delivery.

  2. Bring UHNW methods to all their current clients.

  3. Take the delivery upmarket and compete for UHNW business.

A virtual family office delivery model enables advisors to scale sophisticated advice to their smallest and largest clients without needing to build every capability in-house. Advice – not services – becomes the centerpiece of the delivery.

Bringing a UHNW Framework to All Clients

Every family, regardless of net worth, requires comprehensive and thoughtful advice. The complexity of their financial lives varies, but the framework for delivering effective guidance can remain largely the same:

  1. Manage the total financial structure: Not just investment portfolios, but real estate, alternative investments, private businesses, insurance, Social Security, human capital, and liabilities.

  2. Implement robust risk management: Identify the need for hedges, reserves, insurance, diversification, and more.

  3. Deliver a total market investment framework: Integrate public and private assets, including operating businesses, properties, compensation, and more.

  4. Design total wealth portfolios: Match resources to objectives, focusing on outcomes – not just returns.

  5. Deliver holistic wealth solutions: From investment to insurance to estate planning, all parts must work in concert.

These methods scale to UHNW clients, but they are arguably even more important for clients of normal wealth – who can’t afford to make mistakes.

Managing the Full Financial Structure

Advisory relationships often center on a portfolio. But a portfolio is just one component of a client’s broader financial structure. When we integrate homes, mortgages, private businesses, alternative investments, Social Security, and human capital, the portfolio becomes a "completion fund" – a vehicle that fills in the gaps to meet life’s needs.

By broadening the scope, advisors differentiate themselves and deepen client trust. It also opens the opportunity for more personalized advice delivery.

Robust Risk Management

Traditional financial planning often confuses risk with uncertainty. Risk is probabilistic and measurable; uncertainty is unpredictable and personal. Real life is filled with uncertainty: job loss, health crises, market shocks, and more. Managing uncertainty requires more than a risk questionnaire and Monte Carlo simulation. It requires tools such as bond hedges, protective reserves, insurance, diversification, and life flexibility.

These tools help immunize essential spending, protect against income loss, and build resilience into financial plans. Importantly, they also strengthen the advisor’s position as a holistic wealth strategist.

Total Market Investment Philosophy

UHNW investors often invest across public and private markets. The fundamentals of investing apply to both. Think of returns as being driven by three sources:

  1. Enterprise risk: Market, size, value, and other factor exposures.

  2. Engineered risk: Illiquidity, leverage, and derivative-based strategies.

  3. Manager skill: Active selection and market timing.

As an example, most alternative investment strategies boil down to the same thing: they start with enterprise risk and then apply a healthy dose of engineering and skill to amplify returns.

A total market investment philosophy enables advisors to consider public and private investments on the same basis. From here, advisors can identify areas in which the client is overexposed and balance the liquid portfolio – the “completion fund” – accordingly.

Advisors can, and should, extend this philosophy to future income such as human capital (the value of future career earnings) and Social Security. How much would a client’s Social Security be worth if valued like a bond? How much would their human capital be worth if valued like a private business?

Building a Total Wealth Portfolio

This comprehensive approach to managing the full financial structure culminates in total wealth portfolios:

  1. Fixed income designed to hedge the client’s essential level of spending, build in reserves to offset the unexpected, and manage liquidity risk.

  2. Social Security and other defined benefit resources that function like a bond in the strategy, reducing the need for fixed income.

  3. Private investments and assets evaluated from the perspective of enterprise risk, engineering, and skill.

  4. Human capital as a source of wealth creation that merits dedicated reserves, insurance, and other protective solutions to increase confidence.

  5. Liquid equity as the “completion fund” that balances the strategy.

Think of each element of the total wealth portfolio as a tool to help achieve a hierarchy of outcomes defined by the client:

  1. Allocate wealth intentionally to personal, family, and social objectives.

  2. Prioritize outcomes as essential, important, and discretionary.

  3. Match assets and liabilities to immunize essential needs and take risk against discretionary objectives.

  4. Integrate total wealth into the planning process, including homes, mortgages, businesses, property, private assets, Social Security, and other resources.

  5. Customize with purpose for taxes, values, and individual preferences.

This process personalizes every strategy and aligns wealth with purpose.

The Virtual Family Office as a Scalable Model

Comprehensive advice requires a comprehensive business delivery. A virtual family office model coordinates expert advice and services without internalizing every capability:

  • Strategy development – The heart of strategic advice: unifying planning, asset allocation, risk management, and wealth management.

  • Data and technology – Aggregating client data from various sources, including private assets.

  • Professional services – Coordinating tax, estate planning, insurance, philanthropy, etc.

  • Implementation and integration – Executing complex strategies and ensuring everything fits together seamlessly.

Financial advisors are in a unique position to operate as wealth strategists – the only professionals who see every resource, liability, and objective. They can direct a coordinated approach with estate attorneys, tax accountants, insurance providers, and others to deliver a family office experience without building everything in-house.

Advisors looking to win UHNW business don’t need to overhaul their firm. With the right systems, methodology, and partnerships, advisors can elevate their value proposition and compete at the highest levels of wealth management.

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