As wealth in the U.S. becomes more concentrated at the top, financial advisors may start acting more like family offices in providing “white glove services” to meet clients’ more complex needs, according to the latest report from Cerulli Associates.
In what the Boston-based data provider and consultancy calls its “Moving Upmarket Issue,” Cerulli forecasts that the high-net-worth market, or those with $5 million or more in investable assets, will grow annually at about 9.3% to surpass $30 trillion in total assets by 2028. For advisors, that will mean more clients seeking services beyond asset allocation and financial planning, such as estate planning, risk management/insurance and tax planning.
“Substantial asset accumulation creates financial sensitivities to market changes, prompting HNW households to seek advisors who are accessible and communicative, especially during periods of potential market volatility,” Cerulli’s team wrote in its report. “Consequently, advisors must deliver a ‘white glove experience’ and superior levels of service across every aspect of the client service spectrum.”
Cerulli also points out that the movement toward offering more services is already underway among the more than 50,000 HNW-focused advisors. In 2024, advisors offered HNW investors an average of 12 services, up from 10 in 2017. In addition, a higher percentage of advisors provide services such as charitable planning, trust administration, and private banking than they did in the past.
“Cerulli expects continued growth in the adoption of these services, as firms across all wealth management firm types aim to service wealthier and more intergenerational families,” the firm wrote.
Chayce Horton, an associate director in Cerulli’s wealth management practice, said that, while the firm doesn’t have a formal projection of HNW advisors in 2028, it’s “safe to assume” that there will be more servicing of the sector, and at higher asset counts.
“There will be advisors that enter the industry and/or shift their focus to this demographic, but there will also be efficiency gains on a per-advisor basis as well,” Horton said. “All in all, I would expect both the 50k figure to go up as well as the $368 million [in assets per advisor figure today] as well.”
The shift is happening in part due to client demand. In the U.S., wealth has grown more concentrated in the past five years, with the HNW set increasing fivefold from 2010 through 2014, an estimate Cerulli worked up with U.S. government data. In 2010, 70% of the population had less than $5 million in assets; today, that cohort is down to 46%. Meanwhile, those with $20 million or more went from 10% in 2010 to an estimated 25% in 2024.
That wealth concentration is only set to increase with what Cerulli sees as an ongoing $105 trillion “intergenerational wealth transfer.”
“Although those under age 40 control just over $5 trillion in financial assets as of 2024, these households are expected to inherit nearly half a trillion dollars this year,” the researchers wrote. “Cerulli predicts this figure will surpass $1 trillion each year by the end of the decade.”
It remains to be seen how far advisors will go to meet these clients’ needs. The researchers note that HNW practices balance being all things to their clients and remaining profitable. Currently, many are using a mix of in-house and third-party services.
Firms were more likely to outsource trust administration (53%), tax planning and compliance (49%), risk management and insurance (37%), and bill-pay services (26%). However, they were less likely to outsource in areas such as consolidated reporting for a client’s assets (6%) and cash management (8%).
“Larger firms have been able to develop service offerings in-house, which can potentially reduce costs and increase margins,” Cerulli wrote. “Drawing external expertise to the firm also can help attract more wealthy clients.”
Added services are also bringing higher fees and disparity in fee models. Overall, asset-based fees for HNW clients grew from 54 basis points in 2020 to 59 in 2024. For instance, separate service and subscription fees have increased, while commission-based fees have fallen, according to Cerulli’s survey.
Finally, the researchers noted the likely increase in advisors offering alternative asset investing for the HNW market.
In 2024, about half (49%) of advisors said they do not use alternatives in their portfolios, partly due to liquidity concerns and product complexity. However, another 81% said they believe incorporating alternatives will enhance and differentiate their offering.
“Ultimately, both asset managers and wealth management home offices play a critical role in the adoption of alternatives,” Cerulli wrote. “A large motivator for advisors to adopt alternatives is understanding the overall business impact, despite the challenges of liquidity, the product complexity and price, and the subscription/redemption process.”
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