The Complexity Curve and Excelling with High-Net-Worth Clients

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Recently I had to ask a client, “Remember when I told you that there would come a time when your financial life got to the level of complexity that we needed to bring in a CPA?”

“Mmmhmm,” responded the client – who had always self-prepared their tax return.

“Congratulations,” I told her. “We are there.”

Our firm began working with this client as soon as she graduated from medical school. In the early days, it was cash flow management. Next, it was preparing for a dual-income household with no kids. Then, a few short years later, there was dual income and kids. As her life blossomed before us, so did her career.

Meanwhile, as an associate, I transitioned into partnership tracks and later into acquisitions, mergers, and buyouts. Initially focused on maxing out a 401(k) plan, I soon shifted to diversifying my portfolio and incorporating real estate investments. Life became increasingly complex as my net worth grew.

Serving a HNW audience

As financial advisors, we all aspire to serve high-net-worth (HNW) clients who require complex financial strategies and comprehensive wealth management. Still, for our firm, that was never our target avatar. Rather, it just happened naturally.

We once told one of our financial advisors the difference between an HNW and an “average client” (normally meaning between $1 million and $3 million in net worth was simple: nothing. Either way, they’re entrusting you with their entire life’s savings, so you better get it right.

As life becomes more complex, financial planning demands more than just a basic understanding of financial planning. It requires an unwavering commitment to continuous learning, building a strong team of experts, and staying ahead in an ever-evolving industry. This is especially crucial as you navigate the “Complexity Curve,” a concept highlighting the increasing complexity of financial lives as net worth rises.