A new report from PriceMetrix finds that high net worth (HNW) clients — which it defines as those with $2 million in assets — are found, not made.

The firm reports that its data shows that 13% of clients have more than $1 million in assets with their financial advisor, and 5% have more than $2 million. And, it says that it views the $2 million mark as the appropriate definition of today’s high net worth client. Yet, the median household with a financial advisor has $210,000 in investable assets, it notes.

Additionally, PriceMetrix says that its data shows that small households rarely grow into HNW clients. It reports that just 3% of households with less than $500,000 in assets become HNW clients over the following five years. And, only 7% of households with less than $1 million become high net worth investors over five years.

“The number of times small households become high net worth clients is simply too few to merit a significant amount of advisor attention,” said Doug Trott, president and CEO of PriceMetrix. “Advisors seeking to grow should concentrate on finding, not manufacturing large clients. The vast majority of high net worth clients were high net worth from the beginning of their relationship with their advisor.”

In terms of account type, the firm reports that large clients are adding fee-based accounts more often than other clients, and it finds that they are “seeking fair fees but not necessarily the lowest ones”.

It reports that HNW households are more likely to hold fee accounts, with 51% of HNW clients holding fee accounts, compared to just 36% of households with between $250,000 and $500,000 in assets. Additionally, 43% of high net worth households have both fee and transactional accounts, it says. Indeed, 92% of households with $2 million or more in assets have transactional accounts, compared to 85% of households in the $250,000 to $500,000 range.

PriceMetrix also reports that the median revenue on assets (RoA) for fee-based accounts for HNW clients is 0.76%, with a quarter of clients paying 0.45% or less, while, at the other extreme, one quarter of them pay 1.06% or more. It notes that 10% of these clients pays 1.45%.

It notes that, while HNW households do exhibit some price sensitivity, its data indicates that both overpricing and underpricing results in less success with high net worth households. “Our data suggest that deeply discounted prices and a high concentration of small households reduce the likelihood of attracting high net worth households,” said Trott.

The complete PriceMetrix report can be found here: www.pricemetrix.com/big-fish/.