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Financial Planning for the Emerging Affluent

Written By: wealthtender
Reviewed by: Mike Reyes
Last Updated July 29, 2022

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Are you a busy professional in your 30s or 40s beginning to accumulate wealth? A financial advisor who specializes in serving emerging affluent clients can help you enjoy life more with less money stress.

In the US, households with investable assets of $500K to $1M are generally known as the mass affluent. If you’re on a trajectory to join this group of approximately 6 million households in the next few years, you’re counted among a group known as the emerging affluent.

Many emerging affluent individuals and couples earn an above-average income and are early in their careers. And many have handled their finances on their own through this point. But as significant life events such as starting a family, making a career change, or moving to a new town disrupt the status quo, the guidance provided by a specialist financial advisor can prove timely and incredibly valuable.

You’ll likely find dozens of nearby financial advisors well-suited to help you reach your money goals with a personalized plan. But it may be more difficult to find a financial advisor who specializes in serving the emerging affluent.

Fortunately, many financial advisors offer virtual services so you can meet online no matter where you (or they) live. This means you can choose to hire a specialist financial advisor who lives hundreds of miles away if you decide their knowledge and experience working with emerging affluent clients like you is a better fit to help with your unique financial planning needs.

Financial Planning for the Emerging Affluent

💡 In the Q&A below, you’ll gain insights from financial advisors who work with emerging affluent clients in their 30s and 40s to help them make smart decisions to enjoy life more today while preparing for a comfortable retirement in the future.

💸 Smart Money Insights for the Emerging Affluent

This page is organized into sections to help you quickly find the information you need and get answers to your questions:

  1. Q&A with Financial Advisors Specializing in Serving Emerging Affluent Clients
  2. Get Answers to Your Questions About Financial Planning for the Emerging Affluent
  3. Browse Related Articles

Q&A: Financial Advisors Specializing in Serving Emerging Affluent Clients

Eight Questions with Carleton McHenry, CFP®

We asked Leavenworth, Washington-based financial advisor Carleton McHenry to answer questions he often

Q: What is a common financial planning challenge unique to the emerging affluent that you frequently encounter when working with your clients? How do you work with them to overcome this challenge?

Carleton: Typically it is a job or career change.  Many are working high stress, high paced jobs and they want to find a way to achieve more balance in their life.  They want to make sure they are maximizing their earning potential in their peak earning years, but they also don’t want to burn out and lose other important things in their life, such as their family or health.  

We help our emerging affluent clients get a better understanding of where they currently stand financially and what things would look like if they did something else – Perhaps they are pushing towards a big promotion, knowing that it will lead to earlier retirement and more financial freedom. Or changing to a different job in the same industry that might be less pay but less hours, or moving to a different career that might allow them to have more balance.

We help them evaluate their executive compensation packages and determine if they do make a change, what is the best way to maximize their income potential and keep both their personal and financial goals aligned. 

Q: For individuals and couples who fit into the emerging affluent category and are unsure whether or not they should hire a financial advisor at the current point in their lives, what guidance can you provide to help them make a more informed and educated decision?

Carleton: I would start with asking whether or not you enjoy managing your finances on your own.  If you enjoy it, do you also have the time to do it effectively?  If you can answer yes to this as well, then you may not need to hire someone.  

But one last thing – ask yourself what your time is worth and how many hours are you putting into managing your finances?  If this is a significant number and your time is worth a lot, perhaps you should consider hiring a professional who could do this for you.  

This person can be a sounding board for you and your family when needed as well as being able to step in and continue managing your money for your family in the event something ever happened to you.  Is having that additional peace of mind worth it to you?

Q: How do the services you offer the emerging affluent distinguish your firm from other advisory firms?

Carleton: Our entire focus is on serving this niche of people we call emerging affluent.  They are coming into affluence and wealth, whether making it on their own or through inheritance, and they need guidance on how to manage it in a way that will improve their quality of life.  

Most of our clients are going through major transitions in their lives, and there are a lot of decisions they have to make that will impact them financially.  They want to make sure they make the right choices in these situations and are well prepared for anything.  

Our clients are typically Generation X, but we also work with younger Millennials as well.  Many are in the technology field as well as offshoots of this industry.

A lot of other firms are focused on the retiring Baby Boomer niche, but this is not us.  Our clients are usually still in the wealth accumulation phase and may have many more years of their career still left to go.  Many seek financial independence more than retirement.  As such, we help our clients in these areas.

Get to Know Carleton McHenry, Financial Advisor for the Emerging Affluent:

View Carleton’s profile page on Wealthtender or visit his website to learn more.

Q: When you first speak with an emerging affluent individual or couple, what questions do you like to ask to better understand their unique circumstances and determine how you can best help them achieve their goals?

Carleton: We always start with this concept called Return on Life or ROL.  We ask them “Are you managing your money in a way that is improving your life?”  We have them rank and score 10 different areas of their life, and then we dig deep into those areas to see what is going on and where they need help.  

We also uncover their past history and philosophy about money through a tool we use in our Return on Life (ROL) process.  This is a very interesting exercise with couples as oftentimes, each individual has a different philosophy in a certain area, such as spending or saving that will conflict with their significant other.  This can be a reason why that area may score less than others, and can be a source of tension in the family.  As we work with a couple to determine the best way to manage their finances, we also do our best to align their financial philosophies to create a more holistic plan for their family. 

Q: For emerging affluent clients who are thinking about a career change and worried about the ramifications of giving up their primary source of income, what guidance do you often suggest they consider to help make an informed decision?

Carleton: We not only suggest but run the what-if traps on lots of different scenarios to show them how things could play out.  

This could include not making any money for the next 12-24 months and how this would impact them financially.  Do they have other things to fall back on for support – a working spouse, borrowing from a friend or extended family member, etc. Can they cut back on their lifestyle expenses?  Do they have stock options from work they can exercise and liquidate to provide a longer financial runway?  How will this impact their long-term financial goals? Will a career change mean pushing back retirement? 

All of these things have to be factored into the mix and planned accordingly, which is where we come in and help.  This is the reason we get to know our clients on a 360 degree level so we can help them make better and more informed decisions in areas such as this.  

Q: For emerging affluent couples with aging parents likely to require financial assistance, what actions do you suggest they consider taking sooner rather than later?

Carleton: We suggest they factor this cost of care into the mix for aging parents.  

Will they need assisted living help?  Will they need full-time care?  Memory care?  Other?  Can they provide this care in-home or will it require an outside facility?  Are there other family members willing to help out?  Is their estate plan updated to reflect all of this?  

Q: What questions do you recommend emerging affluent individuals and couples ask financial advisors they’re considering hiring to help them decide if they’re a good fit?

Carleton: We recommend first going to the advisor’s website and getting a better understanding of who they are and their story.  Who do they help?  What is their background and experience level?  How are they compensated – fee or commission?  What are their fees?  Are they holding themselves out as fiduciaries at all times when working with their clients?  Lastly, check their disciplinary record with the regulatory bodies to make sure they don’t have anything negative reported there.  

Q: Is there a particularly memorable experience or a moment you recall with an emerging affluent client when you first realized they have unique opportunities and circumstances when it comes to their financial planning needs?

Carleton: I think we realized this early on if you read our own personal story.  

My wife and I left the big city in search of more, and we found it in the beautiful Cascade mountains here in Leavenworth, WA.  

We are now meeting lots of people who have done the same or who are looking to do the same.  COVID has only sped this up where people can now work from virtually anywhere in the world but there might be some sacrifices they have to make along the way in order to accomplish this and make it truly work. 

What our clients all have in common is this desire for more – a way to maximize and achieve their best Return on Life (ROL).  When you’re living your best life, you are truly happy!  You stop chasing money, and your money starts working for instead of against you.  

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