Do Wealthy Americans Use Financial Advisors? Most Do, and Here’s Why

The wealthy use financial advisors because they focus on their area of genius and delegate wealth management to advisors who are subject matter experts in their field. The wealthy want to be good stewards of their money. They often don’t have the time to focus on the markets and managing their money, so they hire advisors to ensure their money grows and is protected.

Affluent Americans do use financial advisors, but their approach is often distinct from those who are still working toward financial independence. While many may seek advice on investments and retirement planning, affluent individuals tend to focus on more complex goals. These include philanthropy, managing multi-generational wealth, establishing succession plans, and fulfilling altruistic aims. For them, it’s not just about growing their assets but ensuring that their wealth aligns with their values and legacy for future generations. They seek a broader, more strategic approach that covers a wide range of financial and personal objectives.

We’re currently working with a long-term affluent client who has already achieved financial independence. At this stage, the focus has shifted from traditional wealth building to establishing a philanthropic foundation that his family can oversee for generations. What’s particularly interesting is that he wants to remain actively involved in the investment decisions for the fund, so we’re creating a structure that allows him to guide the investment strategy while maintaining the foundation’s long-term objectives. This type of goal reflects how affluent clients often prioritize legacy planning and the integration of personal values into their financial strategies.

I’ve found that affluent investors choose to use a financial advisor because they tend to lead busy lives and prefer to delegate their financial management to a professional. By doing this, they are free to focus on their other priorities such as their career, family, and hobbies. Additionally, depending on the complexity of their finances, they can use the specialized expertise of their advisor to address areas such as tax planning and estate planning.

Our clients are incredibly sharp; they hire us because they know their time is better spent elsewhere, like growing their business, spending time with family, or diving into their passions. Lately, though, we’ve been attracting a different breed: business owners by day and hedge fund managers by night (or so I suspect). Their financial IQs are off the charts, and they genuinely enjoy digging into market details and Roth conversions. At first, I felt a little insecure; I didn’t believe our value proposition was strong enough for these clients, so I asked. Their responses surprised me. They said, ‘Sure, I love this stuff, but I won’t be around forever. What I need is peace of mind, knowing there’s a team I trust implicitly once I am gone.’ These folks know something about the meaning of true wealth, building a legacy with people you trust.

Good advisors are now incorporating tax planning into their routine services. Tax considerations are broad, and include, e.g., tax-loss harvesting strategies, Roth conversions, and even ‘I’m buying a new car what account should I pull from?’

When doing consultation calls with prospects, I often tell people that hiring an advisor is not a net-worth-driven decision, but more of a feeling. For example, you may have reached a point where you don’t feel like you can manage their finances fully on your own due to lack of sufficient time, interest, or knowledge; they have an awareness of their gaps in knowledge and feel they’re missing financial opportunities; you feel a sense of financial overwhelm and don’t know where to start. Because so many advisors today offer planning options where an asset minimum isn’t required, it’s become much more approachable to the mass affluent. If you’re experiencing financial overwhelm, searching for an advisor who offers what you need at a price you can afford is much more doable.

Many people assume that financial advisors are primarily for asset management, but today, many advisors offer behavioral coaching, budgeting, debt management planning, student loan analysis, and advising while you’re building wealth. If you’re in a situation where you’re struggling to pay bills, are taking on debt to make ends meet, and can’t afford a financial advisor’s fees, an AFC®, qualified financial coach, or free counseling center would likely be better options. Looking for an AFC® through a program like AFCPE is a great place to start.

Tax strategy and efficiency are important considerations for wealthy clients. Many wealthy clients require advice on non-financial market assets such as real estate, alternative investments, or closely held businesses. Legacy goals also include the advisor helping prepare family members for inherited wealth.

An ideal client would be responsive and willing to listen to the advice they’re given.

The classic answer to matching an ideal client to an advisor is, ‘It depends.’ That’s the beauty of the financial advising profession. As a client with a need, their ideal advisor is often related to the client’s profession or background. Whether a doctor, military veteran, business owner, farmer, etc., each profession has nuanced benefits an advisor would be expected to know to be deemed competent and trusted. The most advantageous service offered that is difficult to articulate in any marketing campaign, is the intangible benefits of an unemotional third party assessing your overall financial health. With that assessment comes the provision of permission, assurance, and comfort, knowing you have a trusted resource in your corner.

When starting with a financial advisor the fit should be high on your list. If there’s no fit, there’s no relationship. What I mean by this is that you want to be sure the challenges and goals you are looking to work through with the advisor are things they have experience helping other families work through too. If the advisor has little or no experience in the areas where you want help, that advisor will not be a good fit. Our firm will not move forward with a family unless we feel confident that we can assist them through the opportunities and challenges they face. This allows us to build long-term meaningful relationships with the family and ensure we do not create a situation where we over-promise and under-deliver. We prefer to under-promise and over-deliver.

The ideal client for a financial advisor is someone who values saving time and achieving peace of mind, particularly as their income and wealth grow. Small mistakes or missed opportunities can have compounding effects, leading to more significant issues down the road. A good advisor is patient and available to explain your options, helping you make more informed decisions about the trade-offs involved in various tax-saving and investment strategies. Even W-2 employees with high earnings can benefit from working with an advisor who applies a tax-sensitive investment approach. Effective tax planning around retirement contributions and withdrawals, spanning both their working and retirement years, can result in significant tax savings over time.

Our ideal client is someone who knows that peace is not found in possessions or things. Peace is found in knowing and being known. As a Christian, this starts with a relationship with Jesus, but also our relationship with ourselves and others. Our ideal client knows they are not at peace but need help in achieving peace by being known and having a plan that helps them realize who they truly are.

Someone who is trying to beat the market, buy a hot stock, or pursue quick gain as their goal in life is not a good fit for us as advisors.

You shouldn’t hire an advisor if you expect them to help you get rich quickly through exclusive investments unavailable to you otherwise. Some advisors may try to promote their ‘proprietary’ approach or sell you complex investment products that often come with higher fees or commissions. It’s easy for advisors to make promises and then take unnecessary risks with your money, hoping for positive outcomes.

When starting to work with an advisor, you should expect to dive into all matters financial and familial. The more information your advisor has, the better they can guide you and help you reach your goals.

A new client should expect their advisor to take time, a lot of time, to get to know them. To understand who they are. This involves asking deep questions about how they feel about money.

When starting with a financial advisor, you should expect a series of meetings to review your current financial situation and explore your short-term and long-term financial goals. During this process, the advisor will gather all the necessary information to create a personalized financial roadmap that guides you from where you are to where you want to be. While the initial process might feel intense, once it’s complete, the advisor can alleviate much of the burden, offering you sound financial guidance and a clear path forward.

A great advisor sets clear expectations from the jump. Their focus should be helping clients master what’s within their control, like tax efficiency, smart diversification, strategic gifting, and proper asset allocation. A great advisor shouldn’t waste time obsessing over what’s beyond your control, like short-term market wiggles, inflation spikes, or today’s panic-inducing market headlines. That’s why capitalism gave us the Wall Street Journal and the Financial Times.