Strategic Planning for High-Net-Worth Individuals
- Jack Borys
- 3 days ago
- 2 min read
Image: https://stock.adobe.com
Today in the United States, the number of individuals with over $1 million in liquid assets surpasses six million Americans, according to Wall Street Journal. This growing number of high-net-worth individuals requires more financial planning strategies for how these individuals can manage their wealth. Some of these strategies help navigate the trickier tax situations, riskier investments, and put more focus on estate and legacy planning.
To generally be considered a high-net-worth individual, you need to have between $1 million and $10 million in liquid, investable assets (ultra-high net-worth individuals typically have between $10 million and $30 million). With large numbers of assets, comes more precise financial planning. Josh Brehm, senior vice president and wealth management advisor at Merrill Lynch says that, “ the financial planning really depends on the structure of their wealth and what their aspirations are.” Differentiating from management based on the size of wealth for most individuals. These implementations of strategies and plans are more focused on preservation, growth, and control, rather than just returns.
Here are some popular strategies used by financial advisors to manage the wealth of HNWIs:
Asset diversification is a very important part in wealth management for HNWIs because these individuals are dealing with a much larger sum of capital. Investments can be diversified amongst many different forms of investments in order to minimize potential losses. Having a larger portion of liquid assets allows for unique investing opportunities, such as private investments. These opportunities require at least $1 million in assets, or at least $200,000 in individual income, in the last two years. These are rules given by the SEC.
Another important focus for HNWIs is tax optimization. This is arguably the most important. High-net-worth individuals generally fall in higher tax brackets. Advisors look for ways to help minimize taxable income and the tax burden. Common tax tools used by advisors can be asset location, tax-loss harvesting, charitable giving strategies, deferred compensation planning, and state tax optimization.
Risk management planning is important for HNWIs because of market volatility, recessions, large purchases, and fluctuations in retirement timing. Because of the larger scale of assets and investments for these HNWIs, the potential gains and losses are multiplied. Some useful risk management and asset protection strategies include umbrella insurance, property entity structuring in the form of LLCs or LPs, trust structures, business succession planning, and asset titling strategies.
As the population of high-net-worth individuals in the United States continues to grow, the importance of thoughtful and comprehensive financial planning becomes increasingly clear. Managing substantial wealth requires more than chasing returns, it demands strategic diversification, tax efficiency, and proactive risk and legacy planning tailored to each individual’s financial structure and long-term goals. While no single approach fits every investor, these core strategies highlight how disciplined planning and professional guidance can help high-net-worth individuals preserve their wealth, navigate complexity, and position their assets for sustained success across generations.
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