How to Tap Into the 'Phenomenal' Growth of Wealthy Clients

The number of U.S. investors with assets of $1 million or more is set to reach nearly 28 million in 2026, according to the Credit Suisse Research Institute, up about 13% from roughly 24.5 million in 2021. Meanwhile, some 141,000 U.S. investors had $50 million or more in total assets in 2021, and this figure could grow by 30% by 2025 to over 180,000.    

Serving these households represents “a golden age of the financial planning era,” as wealthy clients seek access to the best products and services, as well as relationships with financial advisors “they can trust to serve them” as fiduciaries, says Jeremiah Barlow, head of Family Wealth Services for Mercer Advisors. “That’s a big trend.”

Of course, it takes a team effort to provide high-net-worth and ultra-high-net-worth clients with what they need to realize their long-term wealth goals. A recent Cerulli Associates poll of advisors serving high-net-worth clients found their top business challenges are navigating market volatility (48%), integrating systems (39%), and attracting/retaining personnel (35%). 

Barlow — an estate planning attorney who joined Mercer in 2013 and is based in Santa Barbara, California — candidly breaks down the multiple challenges involved in providing wealthy clients with the full suite of complex services they are looking for. He also highlights what it takes to succeed in these competitive industry segments.

ThinkAdvisor: Could you tell us about Mercer Advisors’ family wealth business?

Jeremiah Barlow: High net worth is our core business, and we have an ultra-high-net-worth multi-family office component, as well. They don’t necessarily blend together for us. We have a very conscientious segmentation of the two.

Mercer Advisors is a $45 billion assets-under-management firm as a whole, and 75% of that represents the high-net-worth, ultra-high-net-worth and family office clientele — with about 50% … in the high-net-worth realm and about 25% in ultra-high-net-worth, multi-family office.

Mercer as a whole … has about 250 [advisors]. In support of that, we also have a 125-person team of experts exclusively focused on these high-net-worth and ultra-high-net-worth individuals.

This 125-person expert team includes estate-planning strategists, CPAs, [financial] planners and portfolio managers. Also, Mercer has 90 offices around the country [in] … the continental United States plus Hawaii.

Do you have trust and estate attorneys?

Absolutely. What we find is that the clients in this space really want that kind of one-team approach, mostly because a lot of the time you’re dealing with a family or multiple generations.

They’re really looking for someone who can connect the dots around those areas of planning — tax, estate, investments and intergenerational wealth transfer. We have all of these [experts] in-house.

We have a robust CPA team that does about 5,000 tax returns a year for our clients. Similarly, on the estate planning side, a robust team of estate and tax strategists facilitates not only the planning but also the implementation.

Plus, we have an entire financial planning team on staff that helps build out the plans, keeps them maintained and ensures we’re taking care of our clients proactively. We do similar work on the portfolio management side.

Is the financial planning team included in those 250 or so advisors?

It’s in addition to the advisors. All of our advisors are planners as well. But we found that when we can support them with people that are exclusively focused on building and maintaining the plan, it allows our advisors to spend the time with the clients instead of building the plan.

The advisor can really spend their time understanding, getting to know the client and serving the client, and then we support them by making sure they have all the tools, the resources and everything that’s up to date so they don’t have to be an expert at everything.

They have that deep bench built around them, and it’s in-house. This means they don’t have to worry about talking to an external expert at an hourly rate.

Have you always had in-house experts or at some point did you use third parties?

We built [this team] out over time. When I started at Mercer 10 years ago, we had basically two in-house experts, and it’s really been our clients that have [driven] demand. We built out the expert team from what it was (with two individuals) about a decade ago to now upwards of 125.

We do work with outside experts if the clients want them — for example, our ultra-high-net-worth clients in the $100 million-and-up range. They tend to have their own [outside experts] for their taxes because they [pay] multi-jurisdictional taxes across the world. We do tend to work with them through support; we’re the extra set of eyes.

What services are most important to clients in this space overall?

It depends on the client’s needs. Especially when you get in the ultra-high-net-worth range, the client is going to dictate what they need and what they don’t need.

But every client in the ultra-high-net-worth realm … [works with] a dedicated advisory team, CPA, estate planning strategist, planner and portfolio manager — a full team wrapped around them. This goes for not only the matriarch and patriarch but generally for all the family members around them.

Similarly, with the high-net-worth [segment], the client may not need a dedicated person because they may not need planning around all these areas every year, but they do get that team, too. That’s available to them as needed. Also, if we can’t work strategically with someone [around a specific issue] then we kind of build [the solution] in-house.

We’ve found that there’s a big push towards intergenerational wealth transfer in the industry today. Everyone’s predicting this for the baby boomers, and there are a lot of our families saying, “Hey, I want you to make sure you’re providing the exact same services to my generation two, my generation three, etc., to make sure that they’re supported.”

What services are growing significantly?

The tax area is growing rapidly. The industry is shifting — with a lot of people in the tax realm retiring or leaving this business in general. Across the industry, it’s been a couple of hard years.

What we are finding is that our clients are yearning or flocking to us saying, “Can you take over the taxes for us?” And the answer is, “Yes, we can.” But it’s requiring us to put a significant investment into ensuring that we can solve this tax piece for them — not only the planning, but also the compliance piece, the preparation of the tax return.

This demand has ramped up over the last two years or so. You kind of came out of the pandemic with a lot of CPAs that were burned out and decided to ultimately move on. Clients have been sitting there with a need on the tax side that’s big — bigger than them wanting to do it themselves or maybe more complex than they would like.

This pickup over the last two years is good because we had started to grow the [tax] business anyway. Our tax team is over 40 strong and could double this year. It is a high-growing area that we’re putting a lot of focus on to make sure, again, that we take care of our clients.

Our multi-family office area is also growing quite significantly. We’re finding a need for that area, which would include clients with $25 million of assets or more, including upwards of $100 million. Their families want support [and services], but they don’t want to have to build them on their own. We have a team that does just that and that has been growing very rapidly in the last year.