Wealth Management for the High-Net-Worth Sector 

By Craig Sher, Head of R&D, Discovery Invest

Wealth management for high-net-worth individuals (HNWIs) involves a unique set of challenges and opportunities. 

Challenges Faced by High-Net-Worth Individuals 

While the amounts involved are significantly larger, HNWIs share common investment goals with the broader population: maximizing returns, minimising taxes, and ensuring wealth is efficiently passed on to dependents. However, their investment needs and strategies can be more complex due to varying risk appetites, time horizons, and tax planning requirements. They often seek specialised investment structures and prefer their assets to generate returns in hard currencies. 

Discovery Invest’s Differentiated Approach 

Discovery Invest distinguishes itself in the HNW sector by offering a diverse range of investment products and leveraging global partnerships. Sher explains that the Discovery platform prioritises providing the latest and most effective investment options from around the world. This includes traditional unit trust funds, offshore share portfolio funds, unique structured products, and discretionary fund management solutions. For larger clients, these offerings can be further personalized through Cogence in collaboration with BlackRock, the world’s largest asset manager. 

One innovative product is the USD Capital 200+, which guarantees a 100% return in US dollars if a share portfolio remains flat or increases by at least 0.01% over five years. Additionally, Discovery facilitates offshore money transfers below the prevailing exchange rate, enhancing clients’ investment flexibility. 

We also introduced a Bitcoin Fund housed in a tax-efficient endowment wrapper, specifically designed for clients with high tax liabilities, demonstrating their commitment to providing cutting-edge solutions. 

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The Shared Value Model 

A unique aspect of Discovery Invest’s approach is its shared value model, which incentivises clients to adopt behaviors that lead to better long-term investment outcomes. Research indicates that optimal investment results are achieved by saving longer, saving more, and withdrawing less. These behaviors not only benefit clients by maximising their economic gains but also generate excess profits for Discovery, which are then used to reward clients for their prudent investment behaviors. 

For HNWIs, the larger asset sizes mean they generate up to 7.5 times the value of an average client, enabling us to offer even more substantial benefits. This led to the creation of the Purple client offering, a suite of tailored products for HNW clients. Purple clients receive significant capital boosts to their investments, which they retain if they remain with Discovery, as well as discounts of up to 100% on administration fees and reduced asset management fees. Additionally, we enhance the service experience for these clients, ensuring a high level of personalised attention and support. 

Preparing Advisers for Success 

To thrive in the HNW sector, advisers need access to top-tier products and investment opportunities. Sher emphasises the importance of partnering with providers that offer market-leading propositions. While there is a temptation to offer highly personalised solutions, Sher warns that customisation for its own sake can be a mistake. Often, the best solution for a client might be the one that aligns with the provider’s most robust and well-researched offerings, even if it is not entirely bespoke. 

Managing wealth for HNWIs involves understanding their unique challenges and providing innovative, effective solutions. Discovery Invest, through its diverse product offerings, global partnerships, and unique shared value model, exemplifies how to successfully cater to this sophisticated market segment. 

By focusing on both client benefits and company growth, we create a win-win situation that drives better outcomes for both the firm and its clients.