Most of us would describe people who earn an annual six-figure sum as ‘wealthy’, given that the average salary in the UK is just under £35,000 a year.
But HSBC’s recent report, ‘Your Money’s Worth: Defining Wealth in 2025’, shows that just one in 10 people earning £100,000 or more would see themselves as wealthy.
From a financial planning angle, it’s important to know that these generations have a very different take on what wealth is
High earners are a key target market for financial advisers, so what implications does this have?
Perceptions
There are many reasons why high earners may not feel wealthy: high inflation, taxes, pressure to ‘keep up with the Joneses’, and so on.
“Our research validated that the more people earn, the more they typically tend to spend,” says HSBC UK head of premier wealth Xian Chan.
It’s about having the freedom to work anywhere you want. It’s about your health and wellness
“Some of it will be discretionary — they ‘need’ to go on that extra fancy holiday or have an extra property — but some of it is not. If you live in a place like London, the cost of renting or paying your mortgage is higher because property is more expensive.”
Chan believes it is important for high earners to have the right tools and support to ascertain where they really stand financially. For some, this will be ‘full fat’ financial planning, but for others it may involve online planning tools such as HSBC’S Future Planner.
Assumptions
It is often assumed that wealthier clients expect to receive face-to-face advice because that is how advisers traditionally demonstrated a high-quality personal service.
However, if those clients do not regard themselves as wealthy, they may be more receptive to digital advice than advisers think.
“I know one advice firm that did a study with all their clients explicitly on the point of client portals,” says FTRC founder Ian McKenna.
We have such an opportunity as an industry with customers who historically haven’t been economic for us
“The advisers were telling the firm that the clients didn’t want client portals. But, when the firm asked the clients, a huge number came back and said, ‘Yes, we do.’”
FTRC has recently conducted its own consumer research in a report called ‘Delivering the business case for digital advice’. It concludes that what people, particularly wealthy individuals, expect from financial advice is changing.
Although FTRC found that the more money people had, the less likely they were to self-manage their investments, wealthy people are not handing all their assets to advisers. Fewer than 10% of people with savings of £500,000 plus or significant pension pots are handing it all to their adviser.
Clients are willing to pay for some services that advisers don’t think are important
Would this change if advice firms took a broader view of the services they offered?
Priorities
Both HSBC and FTRC have identified demand for features that would not traditionally be seen as part of a wealth management or financial advice proposition. For example, HSBC’s premier clients are offered various value-added health benefits such as a GP service.
The reason, says Chan, is that changing perceptions of wealth, particularly among younger generations, mean that it is defined not just by salary and investments.
If you live in a place like London, the cost of renting or paying your mortgage is higher because property is more expensive
“It’s about having the freedom to work anywhere you want and travelling the world; it’s about your health and wellness,” says Chan.
“From a financial planning angle, it’s important to know that these generations have a very different take on what wealth is.”
FTRC’s research concurs with this.
“Clients are willing to pay for some services that advisers don’t think are important,” says McKenna.
Examples include virtual legal guidance and a detailed analysis of how paying a bit more off a mortgage each month would impact a client’s finances.
Our research validated that the more people earn, the more they typically tend to spend
McKenna observes that what somebody with £1m in the bank thinks is important may differ from the view of someone with £100,000.
“We have such an opportunity as an industry with customers who historically haven’t been economic for us,” he says.
“We can supply them with the services they need at a price they can afford and are willing to pay, but their priorities may be different.”
This article featured in the April 2025 edition of Money Marketing.
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