What Is Ultra High-Net-Worth Wealth Management?
Written by Tiffany Woodfield, TEP, Associate Portfolio Manager, CRPC®, CIM® and John Woodfield Portfolio Manager, CFP®, CIM®
When it comes to ultra-high-net-worth wealth management in Canada, it’s essential that you work with a firm with specialists who understand your situation and have helped similar individuals or families.
You're likely seeking specialized financial services and strategies tailored to your situation. You may also wish to understand the challenges and opportunities in managing significant wealth more deeply.
From investment and tax planning to estate planning and personalized advisory services, there's a lot to consider. This blog offers guidance on finding experienced financial advisors and wealth management firms who can provide comprehensive and customized solutions to protect your wealth.
TABLE OF CONTENTS
- Let's Define High Net Worth, Very High Net Worth, and Ultra-High Net Worth
- Basics of Ultra-High-Net-Worth Wealth Management in Canada
- Common Wealth Management Services for UHNW Families
- How Do Ultra High-Net-Worth Wealth Management Firms Work?
- The Unique Needs of Ultra-High-Net-Worth Families
- Investing Strategies
- Risk Management Considerations
- Retirement Planning
- Estate Planning
- Income Tax Planning Support
- Philanthropy and Charitable Giving
- The Role of Family Offices
- The Importance of Regular Financial Reviews
- The Importance of Teaching Children Financial Literacy in UHNW Families
- Choosing the Right Financial Advisors
- Common Questions
Let's Define High Net Worth, Very High Net Worth, and Ultra-High Net Worth
There is plenty of confusion about what Ultra High Net Worth means. Let’s clear that up!
- High net worth (HNW): Individuals with $1 million to $5 million in investable assets.
- Very high net worth (VHNW): Individuals with $5 million to $30 million in investable assets.
- Ultra-high net worth (UHNW): Individuals with $30 million or more in investable assets.
These categories help identify the distinct financial planning needs at each wealth level.
While HNW families often focus on foundational wealth-building strategies, VHNW families face growing complexity in managing their assets, particularly with advanced tax strategies and global investments. UHNW families with $30M+ assets typically require custom solutions, including cross-border planning, family governance, and legacy preservation.
At SWAN Wealth, we help high-net-worth and very high-net-worth families and individuals who are facing cross-border complexities.
Basics of Ultra-High-Net-Worth Wealth Management in Canada
For individuals with considerable wealth, the approach to financial planning must address all critical financial aspects of managing and growing wealth. This includes investment management, tax planning, estate planning, and risk mitigation. The wealth management industry has evolved to cater to the needs of ultra-high-net-worth families, ensuring they receive specialized strategies tailored to their unique circumstances.
Here are the basics that UHNW families need to consider:
1 - Investment Management
UHNW families require advanced investment strategies to preserve and grow their wealth over generations. Key considerations include:
- Diversification: Spreading investments across multiple asset classes such as equities, fixed income, real estate, private equity, and alternative investments to reduce risk.
- Tailored Portfolios: Custom-designed portfolios that align with specific financial objectives, risk tolerances, and time horizons.
2 - Tax Planning
Effective tax planning is essential for minimizing liabilities and maximizing after-tax returns. Key considerations include:
- Cross-Border Taxation: For families with assets or residency in both Canada and the U.S., addressing cross-border tax compliance is crucial.
- Trusts and Tax Shelters: Leveraging legal structures like family trusts to minimize tax exposure and protect assets.
- Capital Gains Optimization: Strategically managing the timing of asset sales to minimize capital gains taxes.
3 - Estate Planning
Affluent families must plan for the seamless transfer of wealth across generations. Important components include:
- Wills and Trusts: Establishing clear legal documents to outline asset distribution and avoid disputes.
- Succession Planning: Preparing family members or external managers to take over family businesses or assets.
- Philanthropic Legacy: Structuring charitable giving through foundations or donor-advised funds to align with family values while offering tax advantages.
4 - Risk Mitigation
Managing risk is a cornerstone of UHNW wealth management. Key areas include:
- Insurance Solutions: High-value insurance policies for life, property, and liability coverage to safeguard assets.
- Market Volatility Protection: Strategies such as hedging or alternative investments to mitigate market risks.
- Geopolitical and Currency Risks: Addressing risks related to global investments and foreign exchange exposure.
5 - Family Governance and Wealth Education
Ultra-high-net-worth families often implement governance structures to preserve their wealth and ensure alignment among family members.
- Family Councils: Forums for making collective decisions and resolving disputes.
- Financial Education: Teaching the next generation about responsible wealth management to prepare them for stewardship roles.
Common Wealth Management Services for UHNW Families
Wealth management for UHNW individuals and families typically includes:
- Investment management to align portfolios with financial goals.
- Tax planning to minimize liabilities while maximizing after-tax returns.
- Estate planning to ensure wealth transfer is both efficient and aligned with family values.
For those seeking additional support, family office services provide a one-stop solution for managing all aspects of wealth.
How Do Ultra High-Net-Worth Wealth Management Firms Work?
UHNW wealth management firms offer a highly customized approach. They combine expertise in investment strategies, tax efficiency, and legal frameworks to address the unique needs of affluent clients. In Canada, many firms are also equipped to handle cross-border complexities, such as managing wealth across U.S. and Canadian tax jurisdictions.
The Unique Needs of Ultra-High-Net-Worth Families
Affluent families face distinct challenges, including:
- Aligning family financial goals.
- Educating younger generations on responsible wealth management.
- Navigating complex legal and tax systems.
By prioritizing family governance and education, these families can foster long-term financial health and preserve their legacy.
Investing Strategies
UHNW families often use diversified investment strategies, such as:
- Alternative investments like private equity or hedge funds.
- Real estate portfolios designed for steady income and long-term growth.
- Sustainable and impact investments that align with personal values.
These strategies are tailored to mitigate risks while capitalizing on market opportunities.
Risk Management Considerations
Managing significant wealth comes with risks, from market volatility to unforeseen life events. UHNW families often employ advanced risk management strategies, including:
- Diversified investment portfolios tailored to their financial objectives.
- Insurance solutions to protect against unexpected financial setbacks.
A cross-border financial advisor can provide insight into how to safeguard your wealth while pursuing long-term growth.
Retirement Planning
For ultra-high-net-worth families, retirement planning involves far more than securing basic income needs.
It’s about maintaining your desired lifestyle, protecting your wealth, and ensuring long-term financial security. A tailored retirement plan must address tax efficiency, investment strategies, and healthcare considerations while aligning with broader family legacy goals.
Income streams often come from diverse sources, including investment portfolios, real estate, private equity, and business interests. Advanced strategies - such as withdrawing from tax-advantaged accounts in a structured manner - can help optimize after-tax income.
Retirement planning also involves contingency measures to protect against unexpected economic shifts, such as market downturns or rising inflation, ensuring your wealth remains resilient. If you have wealth in Canada and the U.S., working with a cross-border financial advisor can help.
Estate Planning
Effective estate planning is critical if you have a very high net worth. Estate planning ensures that your wealth is transferred according to your wishes while minimizing taxes and preserving your legacy. This involves:
- Creating wills and trusts.
- Establishing charitable foundations.
- Structuring assets to ensure a smooth transition.
- Doing comprehensive tax planning.
Your wealth management team should lead you through the estate planning process, acting as a guide and connecting you with the appropriate lawyers and accountants.
Income Tax Planning Support
With substantial wealth, even small changes in tax laws can have significant impacts. Tax planning strategies for UHNW families include:
- Cross-border tax planning for multinational assets.
- Leveraging deductions and credits.
- Structuring investments to minimize taxable income.
Philanthropy and Charitable Giving
Many UHNW families incorporate philanthropy into their financial plans. Charitable giving provides both personal fulfillment and potential tax benefits. Structured approaches, such as donor-advised funds or private foundations, allow for impactful giving while optimizing tax efficiency.
The Role of Family Offices
Family office services offer a comprehensive approach to managing wealth, from investment strategy to estate planning. These services are particularly beneficial for UHNW families, as they centralize financial management while offering tailored solutions for unique needs.
The Importance of Regular Financial Reviews
The financial world is constantly changing. Regular reviews ensure that your strategies remain aligned with your goals and adaptable to economic shifts. A trusted financial advisor can help you stay proactive in adjusting to these changes.
The Importance of Teaching Children Financial Literacy in UHNW Families
If you're raising children in an affluent family, teaching financial literacy is a critical part of your legacy planning.
Without a solid understanding of financial concepts, the next generation may struggle to preserve and grow the wealth you’ve worked hard to build. Educating your children about managing wealth, understanding investments, and making informed financial decisions ensures they are prepared to responsibly handle the opportunities and challenges that come with significant assets.
Financial literacy fosters independence, instills accountability, and helps prevent the pitfalls of mismanagement, safeguarding your family's legacy for generations to come.
Choosing the Right Financial Advisors
Finding the right financial advisor and wealth management team is critical for anyone with a high net worth. Look for a team with expertise in cross-border planning, a proven track record in managing substantial assets, and a commitment to understanding your unique objectives.
Make sure you feel comfortable speaking with your financial advisor. Ensure they have the experience and qualifications required to manage your investments and provide guidance as you continue to grow your wealth.
Common Questions
Which financial institutions in Canada serve clients with ultra-high net worth?
Canada’s major banks, including RBC Wealth Management, BMO Private Wealth, and TD Wealth, have dedicated divisions for ultra-high-net-worth clients. In addition, at SWAN Wealth Management, we help high-net-worth and very-high-net-worth clients who have cross-border ties and wish to have their investments optimized to minimize tax and ensure diversified income streams.
If you have an ultra-high net worth, should you have your investments managed by a private firm or a bank?
Depending on your needs, you can choose between a private firm and a bank. Banks provide a wide range of integrated services, while private firms often deliver more personalized, boutique solutions with a higher degree of customization. Private firms may also have specialized expertise in cross-border or niche investment strategies. If you work with a bank, make sure that you're not being sold packaged products with high fees.
Are trust and estate planning critical for individuals with ultra-high net worth?
Trust and estate planning help ultra-high-net-worth individuals and families minimize taxes, protect assets, and ensure a seamless transfer of wealth. These strategies also align with legacy goals, safeguard family dynamics, and establish governance structures to prepare the next generation for managing significant financial responsibilities effectively. Estate planning is an absolutely critical part of wealth management.
What are the top UHNW wealth management firms in Canada?
Top firms serving ultra-high-net-worth clients include RBC Wealth Management, SWAN Wealth Management, BMO Private Wealth, and CIBC Private Wealth. These firms provide a wide range of services, from advanced tax planning and estate solutions to customized investment strategies and family office services tailored to substantial assets.
How much do UHNW wealth management firms charge in fees?
Fees typically range from 0.5% to 1% of assets under management, depending on portfolio size and complexity. Additional fees may apply for specialized services, such as estate planning. Many firms offer tiered pricing, with lower rates for higher levels of managed wealth.
How can I choose the best ultra-high-net-worth wealth management firm?
Start by assessing your needs, including tax planning, investment strategies, or cross-border expertise. Look for firms with a strong track record, transparent fee structures, and personalized service. A good advisor understands your unique goals, communicates proactively, and provides comprehensive solutions aligned with your financial objectives.
What are family office services?
Family office services provide comprehensive wealth management tailored to affluent families. They include investment management, tax and estate planning, philanthropy strategy, succession planning, financial education for heirs, and administrative services like bill payment and record-keeping. These services simplify complex financial affairs and align with long-term family objectives.
Which financial assets can a family office help manage?
A family office can manage a wide range of financial assets, including investment portfolios, real estate holdings, private equity, business interests, and alternative investments like art or collectibles. They also oversee cash flow, liquidity, and financial instruments tailored to ultra-high-net-worth families’ unique goals and risk tolerances.
Next Steps
If you’re a Canadian resident or are planning on moving to Canada or the US and need assistance with moving and optimizing your investments, estate planning, wealth management and portfolio management, please get in touch. At SWAN Wealth, we specialize in Canadian financial planning, cross-border financial planning and cross-border wealth management.
Read More
If you’re planning a cross-border move, these articles and guides will help you simplify your move and ensure you’ve covered everything.
- Looking for a Cross-Border Financial Planner or Advisor?
- Financial Advisors in Canada
- How to Choose a Financial Advisor in Canada
- Fiduciary Financial Advisors in Canada
- Finding a Wealth Manager in Canada
About the Authors
Tiffany Woodfield is an Associate Portfolio Manager licensed in Canada and the USA, a Chartered Investment Manager (CIM), a Chartered Retirement Planning Counselor (CRPC), a Trust and Estate Practitioner (TEP) and the co-founder of SWAN Wealth Management, along with her husband, John Woodfield. Tiffany advises clients who live in Canada and the United States and want to simplify their cross-border financial plan, move their assets across the border, and optimize their investments to minimize their tax burden. Together, Tiffany and John Woodfield help their clients simplify their cross-border finances and create long-term revenue streams that will keep their assets safe whether they live in Canada or the U.S.
John Woodfield is a Financial Management Advisor (FMA), a Chartered Investment Manager (CIM), and a Certified Financial Planner (CFP), and in 2007 was inducted as a fellow of the Canadian Securities Institute (FCSI). As a portfolio manager and CFP®, he works with clients across Canada. John Woodfield’s clients are families, individuals and business owners who understand the importance of comprehensive wealth and investment plans driven by the lifestyle they want to lead.
Schedule a Call
Schedule a 15-minute introductory call with SWAN Wealth Management. Click here to schedule a call.
