Top 3 tech tools for UHNW wealth management

Top 3 tech tools for UHNW wealth management

The reality of managing HNW and UHNW investors

When it comes to managing High Net Worth (HNW) and Ultra-High Net Worth (UHNW) investors, the stakes are high. These investors have unique needs and goals but also require a superior client experience and much closer attention to detail. Here are some tips on what you should look for when seeking help from technology in order to succeed with high and ultra-high net worth clients.

Financial advisors must assume numerous responsibilities, from pinpointing the best financial assets to developing comprehensive investment plans that allow clients to achieve long-term success. This can be a challenging proposition without access to the latest FinTech platforms, solutions, and capabilities.

Understanding UHNW wealth management

HNW and UHNW portfolio managers require the same advanced performance and risk analytics tools that hedge funds and institutional investors use. Furthermore, these individuals and families will not hesitate to take their business elsewhere if they feel their financial planning needs are not being met or if someone else is offering more.

This is why in today’s digitized economy; you simply cannot expect to succeed in the increasingly competitive high new worth and UHNW wealth management niche market without having proper performance tools and functions to boost your productivity and provide the highest level of service to your clients.

What are the top tech tools for UHNW and HNW wealth managers?

Managing investable assets has been made much more efficient by the use of high-tech platforms, and the best wealth managers all rely on these tools to generate returns on their client’s capital. Some of the top can’t-live-without FinTech investing tools include:

The CRM Portion of a Portfolio Management System

A Portfolio Management System (PMS) that includes a Customer Relationship Management (CRM) system is intended to manage portfolio data as well as all relationships and interactions with a wealth management firm’s clients and potential future clients. The goal of such CRM is simple: Manage customer relationships across the entire customer lifecycle and, in turn, improve business relationships. Yet, it offers so much more to investment advisors.

CRM platforms are critical to financial advisors. They allow them to create tailored communications, generate targeted business insights for their ultra-high net worth clients and prospects, automate workflows, and increase profitability.

More advanced CRM solutions are embedded with artificial intelligence. It enables them to analyze data, predict trends, and provide wealth managers with deeper insights into their HNW and UHNW clients’ unique needs, interests, and investment preferences, thus maximizing the potential for long-term profitability. The CRM guides investment decisions and improves the service offered by any financial advisors.

PMSs that include CRMs are critical for wealth management professionals who advise HNW and UHNW clients. Not only do they allow advisors to build closer customer relationships, but they also integrate functions that drive user adoption and support compliance processes.

Performance, Engagement, and Trust – Delivering a Superior Client Experience

A key element for succeeding in wealth management is technology that allows advisors to work more efficiently by focusing on what is most important – the client experience. But what does customer experience have to do with financial services, you may ask? Everything.

Indeed, wealth advisors must support their clients through financial market turbulence, life and career changes, and personal ups and downs – all key factors of success that define the client experience. The client experience is uniquely important in HNW and UHNW, where Performance, Engagement and Trust are at a premium, given the high level of complexity and the multiple layers of a wealthy client’s needs, wants, and expectations.

WealthTech has revolutionized the traditional wealth management industry with the advent of platforms featuring targeted tools and capabilities at the intersection of financial services and new technologies. They have overhauled existing wealth management products and services, and taken the customer experience to a whole other level. HNW and UHNW advisors who have access to such platforms can leverage these tools to their advantage and to their client’s ultimate benefit.

Modeling: Scenario Analysis Tools and What-if Capabilities

Strategic what-if scenario modeling, scenario analysis, and portfolio analysis are all critical aspects of strategic portfolio management that help wealth management advisors adapt and adjust effectively to shifting circumstances.

While the importance of scenario analysis and what-if planning is a no-brainer, these are rarely well executed. Fortunately, the latest WealthTech solutions propose capable scenario-planning tools that deliver meaningful insights and practical decision-making support through all investment types, according to a client’s long-term goals.

Given the high stakes involved in HNW and UHNW, these aspects are especially critical when dealing with the complex portfolios of wealthy investors. Such tools and capabilities allow you to quickly understand the choices available to adjust, adapt, and rebalance portfolios. For instance, in situations of crisis, you can always stay ahead and ensure your client’s ongoing and future success, while reducing risk and exposure.

Scenario-planning capabilities are also extremely flexible and can be applied to multiple forms of assets, products, capabilities, programs, projects, and any other portfolio that needs management.

Difficulties of UHNW wealth management

As ultra high net worth (UHNW) families increase in wealth, they encounter increasing complexity and legal and regulatory challenges. Some UHNW families may become quite wealthy, yet they may face difficulties expanding wealth and pursuing goals, even when new business ventures are beneficial.

Some wealthy families may consider a family office, and their large family wealth can also push them to work with a team of advisors: financial advisor, estate lawyer, attorneys, accountants, etc.

Due to many factors UHNW families are at greater risk of poor financial planning than high net worth investors, HNW investors are less likely to have an approach to wealth management where capital is placed in real estate, hedge and private equity funds, or buying bonds in the secondary market. In a market crash, UHNW investors would be much worse off than HNW investors because of their higher-risk portfolio.

For financial advisors and wealth management companies, using the best tools available can make the difference between keeping and losing high-profile investors.

How much do you need to qualify as HNW?

A wealth management firm will classify individuals with significant liquid assets between high-net-worth, very-high-net-worth and ultra-high-net-worth investors:

  • High-net-worth investors (HNWs): Individuals or households with assets valued between 1 million and 5 million dollars.
  • Very-high-net-worth investors (VHNWs): People or households who have liquid assets worth between $5 million and $30 million.
  • Ultra-high-net-worth investors (UHNW investors): People or households who own liquid assets of more than $30 million.

Learn more about HNW and UHNM wealth management

Although the households within HNW investors (HNWI) have substantial assets, financial advisors, wealth managers, or other services are often required to be on hand, as they are not only used with financial planning, investing and taxes, but also in managing trusts, real estate planning and access to hedge funds or private equity firms.

People with the most liquid assets are the most attractive clientele for a wealth management team, given they are targeted for higher charges per client, especially for their firms in-house developed personalization plans. Additionally, wealth management firms may set different minimum requirements depending on the level of a client’s assets.

Net worth, however, is just the beginning; from investment strategies to estate planning to asset management, HNW and UHNW investors have to be considered differently by experienced wealth managers.

Differences between Ultra High Net Worth and High Net Worth

Both high net worth and ultra-high net worth (UHNW) individuals have reaped the rewards of personal financial planning services. Both need specialized advice on how to use their wealth, but there are still differences in their approach. UHNW are likely to employ their wealth managers to access global investments and invest in less typical types of investment, such as fine art and collectibles.

How do UHNW individuals invest their money?

The UHNW client segment tends to be slightly older than HNW investors, and their preferences for investment accounts may differ. A great example is the higher rate of charitable giving in UHNW investors, or the reinvesting of profits instead of using them towards additional spending.

Following are investable assets favoured by UHNW investors:

  • Worldwide portfolios
  • Property
  • Equities
  • Bonds/Fixed Income
  • Cash/Currencies
  • Private Equity
  • Collectibles
  • Gold/Precious Metals
  • Cryptocurrencies

Experience it yourself, see the difference