Wealth management for large private fortunes (+€500,000)
Who is concerned by wealth management for large private fortunes ?
Wealth management for large private fortunes is addressed to any person holding financial wealth in excess of 500 000 €, excluding the principal residence. Above that threshold, wealth management changes in nature : it is no longer merely a matter of saving, but of organising, protecting and transmitting capital often spread between securities, life insurance, rental property and company shares. Wealthy individuals, designated internationally by the term HNWI (High Net Worth Individuals), face specific issues : diversified asset allocation, tax optimisation of wealth, protection of the spouse and transmission of the estate to the following generations.
Effective wealth management rests on a global and tailor-made vision. At Harlington, we design a wealth strategy which articulates legal structuring, tax engineering and transmission, so as to grow and durably secure your capital. Discover below the pillars of wealth management dedicated to large private fortunes, illustrated by concrete cases encountered in our files.
Five practical pillars of wealth management for large private fortunes
Pillar no. 1 : diversified asset allocation
Asset allocation is the primary performance lever in wealth management. Above 500 000 € of financial wealth, concentrating savings in a single vehicle (euro funds, real estate or shares in a single company) entails disproportionate risk. Diversification consists in spreading capital across several asset classes – international equities, bonds, private equity, real estate, structured products and cash – according to your investment horizon and your risk tolerance.
Take the example of Mr and Mrs Dupond, company directors who transferred their business and have 1,2 M€ of capital to invest. A suitable asset allocation enabled them to secure a defensive sleeve intended to cover their income needs, while investing a dynamic sleeve geared towards long-term growth.
The role of wealth advice is to define, with you, the target allocation and to make it evolve over time. Regular rebalancing keeps the risk profile consistent, whatever the market fluctuations, and avoids decisions dictated by emotion.
This diversification goes hand in hand with a rigorous choice of wrappers (securities account, life insurance policy, capitalisation contract, PEA), since each vehicle offers a different tax framework that directly affects the net return on your financial wealth.
Pillar no. 2 : tax optimisation of wealth
Tax optimisation of wealth aims to reduce the tax burden on income, capital gains and the holding of assets, in strict compliance with the law. For an HNWI, every investment decision must take account of its tax dimension : choice of wrapper, trade-off between distribution and accumulation, use of tax-relief schemes or of suitable holding structures.
By way of illustration, a family holding a substantial rental property portfolio may choose between direct ownership and ownership through a company subject to corporation tax (SCI à l’IS), in order to smooth the taxation of rents and prepare for its onward transmission. In the same way, life insurance remains a central tool : after eight years it offers a privileged tax framework on withdrawals and an advantageous transmission regime (article 990 I of the French General Tax Code).
Pillar no. 3 : estate transmission
Estate transmission is the central issue for large private fortunes. Planning ahead reduces inheritance tax, which can reach 45 % in the direct line, and avoids family disputes. The tools are numerous : gift in full ownership or of the bare ownership with reservation of usufruct, donation-partage, Dutreil pact for company shares, or life insurance.
In the case of the Pichegru family, the transmission of a family company was organised through a donation-partage coupled with a Dutreil pact, allowing an exemption of 75 % of the value of the shares transferred. The splitting of ownership also enabled the parents to retain the income while transferring the bare ownership to their children at a lower tax cost.
Pillar no. 4 : protecting your wealth and your spouse
Protecting your wealth also means anticipating the hazards of life : death, loss of autonomy, incapacity or professional setbacks. For Mr and Mrs Jardin, the priority was to ensure the surviving spouse a constant standard of living and immediate access to liquidity, without depending on the settlement of the estate.
Several mechanisms can be combined : adjustment of the matrimonial regime, a tailor-made life insurance beneficiary clause, a mandat de protection future and, for the most complex estates, recourse to the fiducie-gestion (the French-law fiducie used for management purposes). The aim is to guarantee that your wishes will be respected whatever the circumstances.
Lastly, responsible wealth management incorporates personal protection cover and cover for the long-term care risk, so that funding for possible home care or medical accommodation does not erode the capital intended to be passed on.
A wealth strategy for every stage of life
Wealth management for large private fortunes is not a standardised product: it is bespoke support that evolves with your family, professional and tax situation. Every asset allocation or transmission decision forms part of an overall vision, unique to your wealth.
The need for comprehensive, coordinated support
Beyond 500 000 € of financial wealth, performance no longer depends on investments alone, but on the coordination between financial management, legal engineering and the tax optimisation of wealth. Comprehensive steering avoids contradictory decisions and maximises the net after-tax return.
That is why Harlington brings avocats and wealth specialists around the same table, so that family law, tax law and wealth management speak to one another in the service of your objectives.
This coordinated approach secures every stage: building, growing and protecting your wealth and transmitting your estate, so that your capital serves your projects and those of your family over the long term.
Pillar no. 5: philanthropy and the transmission of values
The final pillar of wealth management for large private fortunes concerns philanthropy and impact investing. Many HNWIs wish to give meaning to their fortune by supporting causes close to their heart, while optimising the tax framework of their donations.
This is the case of Mrs Dubois, a retired former doctor with no children, who had a comfortable estate that she did not wish to see revert to the State. She set us three objectives: to preserve her wealth so as to want for nothing during her lifetime, to grow it prudently, and then to fund chosen causes on a lasting basis after her death.
Several solutions make it possible to structure such an approach: setting up an endowment fund, a gift or a legacy to a foundation recognised as being of public utility, or subscribing to socially responsible investment vehicles. These arrangements give entitlement to substantial tax reductions while guaranteeing that the funds will be allocated in accordance with your wishes.
In Mrs Dubois’s matter, we set up a dedicated structure which funds cancer research and the studies of young talents from disadvantaged backgrounds, with rigorous monitoring of the use of the funds and the possibility of redirecting them if a Beneficiary no longer meets its commitments.
Philanthropy thus becomes a natural extension of wealth management: it makes it possible to pass on not only capital but also values, while lastingly associating your name with the causes you have supported.
There are many other wealth management and fortune management strategies, suited to each situation : bespoke asset allocation, tax optimisation of wealth and transmission of the estate to future generations. Do you hold financial wealth of more than 500 000 € (excluding your main residence) ? Contact Maison Harlington for a personalised and confidential review of your situation, in order to design a solution perfectly suited to your wealth objectives.
Frequently asked questions on wealth management for large private fortunes
From what level does one speak of wealth management for large private fortunes?
One speaks of wealth management for large private fortunes from a financial wealth of more than 500 000 €, excluding the main residence. Beyond that threshold, the issue is no longer merely to save but to organise, protect and pass on capital spread across several asset classes.
What is an HNWI (High Net Worth Individual)?
An HNWI (High Net Worth Individual) is a wealthy individual with a high level of financial wealth, generally above 500 000 € or even one million euros. Such profiles call for bespoke wealth management combining asset allocation, tax optimisation and the transfer of the estate.
How can the tax burden on a substantial wealth be reduced?
Tax optimisation of wealth rests on the choice of vehicles (life insurance, PEA, capitalisation contract), on the trade-off between direct holding and holding through a company (SCI subject to corporation tax, holding company), on the division of ownership between usufruct and bare ownership and on transfer arrangements such as the Dutreil pact. Every decision must remain in strict compliance with the law.
How can an estate be passed on while limiting inheritance duties?
The transfer of an estate is planned for by means of the gift of bare ownership with reservation of usufruct, the donation-partage, the Dutreil pact (75 % exemption on company shares) and life insurance (the regime of article 990 I of the French Tax Code). Planning ahead makes it possible to reduce duties that can reach 45 % in the direct line.
Why call upon an avocat specialising in wealth management rather than a bank?
An avocat specialising in wealth management brings a global and independent view which brings together family law, tax law and wealth management, with no conflict of interest arising from the sale of financial products. This coordinated approach secures every stage: building, protecting and passing on wealth.
The House of Harlington since
2006