81. Wealth Enhancement Strategies for the HNI Market

The High Net Worth (HNI) market is the holy grail of financial advisory, this is the key to TOT qualification

To grow as financial advisors, it is very important that we develop and maintain a HNI client base because this would give us the opportunity to acquire competitive advantage by learning to develop solutions for complex financial needs

HNIs are extremely successful individuals who are in possession of large amount of wealth whether inherited, from the practice of their profession or by dominating their business niche 

The usual advisor's pitch of helping them prepare for retirement or education funding for their children usually do not interest them as they can already afford it many times over

Approaches on investment management may get their attention only because they are looking for new outlets for further diversification of their portfolio

What would be a good approach?

A recent study shows that between the trade-off of "price" versus "value", HNI would most likely consider a proposal with clear and concise value proposition, something that would further enhance the benefits they derived from their already substantial wealth base

The same study shows that three years into the pandemic, 67% of Asian HNIs are now more concerned with the costs of medical treatments

A good approach may be a plan that would enhance the "financial protection" afforded by their health fund

One idea I would like to share is the case I am working on now

Client A decided to set up a personal health fund, he would allocate 10M as initial seeding and add a million pesos a year over the next ten years to cover increases in the cost of treatments,  he eventually would like to build it up to 20M

My proposal is a 10M Life Insurance with a 10M CI rider to cover critical illness, annual premium is about 1.25M/year for 10 years

The value proposition is this - while the client can well afford to self-insure, the plan would allow him to pass on the risk of the more expensive critical illness expenses because a CI happening at the onset of this build up plan may deplete his health fund and affect his ability to continue building it up

The value proposition is this plan would immediately "almost" double the benefits of his health fund

Including an investment component to the plan will allow the client to recover the cost of the CI rider making it seem to be cost free during the protection period

Ideas such as this is what would differentiate an ordinary financial advisor pushing for the old and tired approach of retirement/education planning to an advisor capable of coming up with wealth enhancement strategies 

This is a one-hour program that would present several more wealth enhancement ideas that may help in your last quarter run for qualifications, email alijeffty@gmail.com for arrangements for group presentations

all the best my friends!

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