http://www.pricemetrix.com/big-fish/

Big Fish

May 1, 2013

Introduction

Financial advisors devote considerable effort to attracting and retaining households with substantial assets. There is good reason for this: larger households obviously bolster an advisor’s assets under management and, as previous PriceMetrix Insights papers have shown, increase an advisor’s growth trajectory. For these reasons, talk of catching “big fish” or even landing a “whale” is commonplace in wealth management.

At the same time, discussions of high net worth households contain a certain ambiguity. What, exactly, is a high net worth household? What are their defining characteristics? Which advisors are able to attract them, and in what numbers? In the absence of benchmarks, every advisor, manager and industry analyst is left to their own working definitions. In other words, figurative talk of fish and whales occurs in the absence of data. But the clarity afforded by data is essential to an effective whale hunt, lest one follow the unfortunate example set by Captain Ahab of Moby Dick fame.

This issue of PriceMetrix Insights explores a range of topics relating to high net worth households. The paper provides answers to the following questions:

  • What counts as “high net worth”?
  • What proportion of the market is made up by high net worth households?
  • Beyond assets, what are the characteristics of high net worth households?
  • What do high net worth households pay their financial advisors?
  • What characteristics lead to an advisor getting more than their fair share of high net worth households?

This Insights paper is made possible by PriceMetrix aggregated data representing 7 million retail investors, 500 million transactions, and over $3.5 trillion in investment assets. PriceMetrix combines its patented process for collecting and classifying data with proprietary measures of revenue, assets, and households to create the most insightful and granular retail wealth management database available today.


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