Are you a money advisor looking to enter or expand your reach in the high net worth (HNW) market? This customer segment includes next-generation business owners, executives, creative professionals, and heirs with net worth of $5 million or more.
These prospects represent a diverse group with unique challenges and life goals that go well beyond wealth creation. To attract and retain HNW customers, you need advanced technical expertise and differentiated skills in people and family dynamics management.
How can you acquire or refine these skills? Earn Certified Private Wealth Advisor® (CPWA®) certification. of the Investments & Wealth Institute (IWI) is one way to achieve this goal. But is it worth the time, effort, and money you invest in the process?
To help you with your decision, let’s take a look at what obtaining a CPWA certification means and the benefits it can bring to wealth managers looking to serve HNW clients.
What is a CPWA certification?
The CPWA certification program incorporates a unique, multidisciplinary approach to addressing the financial needs of HNW clients. Applicants to the program can choose between two enrollment options:
A 6-month online program including a week of face-to-face classes at a world-class business school
A 12-month online-only program
The requirements are:
Finally, you must pass a four-hour final exam with 135 questions.
What are the top reasons to consider the CPWA?
The key benefits cited by many consultants with this certification are:
Competitive differentiation in the crowded HNW market
More confidence in working with ultra-high net worth clients
Advanced knowledge specific to solving complex planning challenges
Potential for higher compensation and career advancement
And recent data tells us that CPWA certification can be an effective way to grow your practice. According to Cerulli Associates, CPWA practices have the largest average client size in the industry:
what will you learn
The CPWA program syllabus is designed to provide you with the theoretical and practical techniques you need to serve HNW clients – and to pass the required certification exam. The 11 core themes are divided into the following 4 categories:
1. Wealth Management. To optimize planning for the super-rich, it’s important to understand the big picture. This segment will help you analyze and recommend tax efficient solutions and learn how to build and manage portfolios that meet complex HNW objectives.
tax planning. This in-depth look at HNW-specific taxation will help you discuss strategies with clients, simplify planning, and help you work effectively with your clients’ tax attorneys.
portfolio management. In this segment, you’ll improve your skills in aligning wealth accumulation techniques, risk management, tax awareness, and portfolio strategies with your clients’ resources and goals.
risk management and asset protection. You will learn to evaluate appropriate insurance and wealth strategies to protect clients during life events such as marriage, divorce, and death.
2. Human Dynamics. Working with each customer segment requires strong expectations management, decision-making and relationship skills, but you’ll need to hone your skills as you serve the wealthy.
Ethics. As you learn to identify and classify ethical and regulatory issues across the wealth management spectrum, you’ll be confident working with a discerning client base.
behavioral finance. Cognitive and emotional biases can interfere with a client’s ability to make informed decisions. By learning to recognize biases, you are better able to correct or supplement these tendencies.
family dynamics. Tailored strategy for family organizations, trusts and businesses depends on your understanding of key family roles, family office infrastructure and the intricacies of client acquisition.
3. Legacy Issues. If you are new to the complexities of how charity and estate planning solutions help clients transfer wealth, this segment will provide you with the advanced skills you need.
Charitable donations and foundations. You will learn to assess the ins and outs of public and private charities, foundations and trusts, and the tax implications of giving strategies in complex client scenarios.
Estate Trust and Transfer of Assets. Although portions of estate planning may be outside of your area of responsibility, a thorough understanding of estate transfer, end-of-life planning, and trust issues is essential to the work of an HNW wealth advisor.
4. Specialty Customer Services. Associated with the broader planning and portfolio management needs of HNW customers, there are unique challenges to business planning.
Executive Compensation. This section addresses the valuation of stock options, deferred and stock compensation plans, and concentrated stock situations, including rules, limitations, and tax implications.
closely managed companies. Representing a significant portion of the $5 million+ client base, close-knit business owners need advisors who can make appropriate recommendations on business structures and their tax implications, purchase and sale arrangements, valuation methods, the business life cycle and succession planning.
Retirement. To guide clients with large assets through the distribution phase, you must understand the order of returns, analytical projections, tax treatments, Roth conversions, distribution requirements and the valuation of qualifying plans, and net unrealized appreciation (NUA) rules.
So is CPWA certification a worthwhile investment?
If your business goal is to attract and retain HNW clients, the knowledge and insights of a CPWA certification can help you better target and serve this area of the consulting market. However, make sure you have a clear plan before you get started. Building lasting relationships with your desired clientele always depends on the service offerings your company has and the customer experience you provide.
Advanced financial planning strategies for wealthy clients
Discover creative, comprehensive financial planning solutions—from wealth protection to charitable giving—to meet the unique needs of your high net worth clients.
Commonwealth and IWI are separate and unaffiliated entities. Please consult your member company’s policies and obtain prior approval for all designation/certification programs.