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How You Can Attract UHNW Clients

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What is an Ultra High Net Worth (UHNW) investor?  

High net worth (HNW) and ultra high net worth (UHNW) are classifications used by the financial services industry to denote an individual or family with a high net worth.

There’s no precise definition of how rich someone must be to fit in this category, but the most commonly quoted figure for membership in the high net worth categorization is at least $1 million in liquid investable assets.

UHNW is generally regarded to be worth much more. According to CNBC, there are now 145,000 U.S. households worth $25 million or more and more than ten million millionaire households.

To put that in perspective, one out of every thirty households will be worth a million or more. On the other hand, only about 1 out of every 2,200 households have reached $25 million or more.

I prefer to use statistics, which means I will look at percentiles. Here are household assets ranked by percentile, from PriceMetrix Insights:

  • 50th percentile (median) – $210,000
  • 80th percentile (top quintile) – $685,000
  • 95th percentile – $2,165,000
  • 99th percentile (top 1% of households) – $6,470,000
  • 99.9th percentile – $27,800,000

Knowing this, how can you attract these UHNW investors? Let’s start by understanding their characteristics…

Traits of UNHW investors 

To find information on UHNW investors, I went over to the Spectrem Group. Spectrem did a lot of high-quality research on UHNW investors, and here’s what they found:

  • 94% of UHNW investors are college graduates.
  • 45% have advanced college degrees.
  • 21% have their MBA.
  • The average age of an UHNW investor is 65, but only 8% are below 54 years old.
  • 63% are retired.
  • 14% are semi-retired.
  • 23% are still working.
  • 12% are managers.
  • 8% are educators.
  • 6% are business owners.
  • 29% call themselves self-directed investors.
  • 28% are event-driven investors, who use an advisor for specialized needs such as retirement planning or finding alternative investments.
  • Only 16% are advisor-dependent, relying on an professional for all investment needs.

Here are some more facts, mostly from The Wealth-X and UBS World Ultra Wealth Report, which compiles and analyzes information about UHNW investors: ​

  • 87% are male.
  • 91% are married.
  • 4% are divorced.
  • 3% are single.
  • 2% are widowed.

The most popular hobbies among UHNW investors are sports (golf, skiing, football), philanthropy, hunting, fishing, education, and aviation. Among women specifically, the top hobby is philanthropy.

Among both men and women, the most popular philanthropic cause is education, followed by health.

Another finding is that they spend $1.1 million per year on luxury goods. Their top purchases (in order) are:

  • Travel/hospitality
  • Automobiles
  • Art
  • Jewelry/watches
  • Private aviation
  • Yachts

Getting any ideas yet?

How you can attract UHNWs: 

1. Understand their specific needs. 

No financial advisor can (or should) try to serve everyone. Each niche requires a different suite of services, level of expertise, etc. If you don’t have a niche, take a look at my articles on why you need a niche and best niches for financial advisors.

Within the HNW investor niche, their needs include estate and tax planning, wealth management advice, family governance advice, and philanthropic planning. In fact, philanthropic planning should be one of your areas of expertise – remember how most UHNW investors give to charity?  That’s some food for thought.

Bear in mind that these clients tend to have more complex financial situations. Many UHNW clients employ a broad wealth management focus, with taxes being one of the biggest hot buttons.

2. Go where they are. 

Cold calls, direct mail, and online marketing are all proven ways to build a phenomenal book of business. But when it comes to UHNW investors, these marketing methods don’t serve financial advisors as well. After all, high net worth investors aren’t farmed. They’re hunted. That’s why you have to go where they are.

Fortunately, you have some clues to help you figure out where they might be. You now know that the most common cause supported among UHNW investors is education. This means you’d be smart to show your face at university fundraisers and education-focused charities.

If you are a college graduate, getting involved in your alumni network is an incredible way to build your business. As you go to more events and meet more people, you will begin to see the key players.

3. Focus on your referral process.  

Finding UHNW investors on your own is difficult, but once you’ve found a few, you have a gateway to quality introductions. This is because HNW individuals tend to hang out with other HNW individuals. They live in the same communities, vacation in similar venues, and attend similar social events.

Every happy UHNW client you have is a gold mine of future business. A referral from these individuals will be worth more because their peers will look to them for wealth advice. If someone with a net worth of $25 million tells a friend, who is worth only $3 million, to use your services, the person worth $3 million is more likely to listen.

With this level of clientele, you should make referrals a big deal. Thank your referring clients and be willing to spend more (both time and money) to show them that you appreciate them.

The UHNW market is not an easy one to break into, which is why you should treat the referral process with the respect it deserves. If you want to get more referrals, check out 5 Reasons Why You’re Not Getting Referrals.

4. Think quality.  

UHNW investors demand quality. Once again, I refer to the statistics; if they’re spending over $1 million in luxury items each year, you better believe they demand the best of the best.

This means you should be developing a brand that is well-designed and highly-positioned. Start thinking about different high-quality brands and how you can immediately (both consciously and unconsciously) tell the difference. Your prospects can tell the difference just like you can, so invest in quality marketing materials to attract them.

Speaking of quality, it’s worth mentioning that your HNW and UHNW clients are willing to pay for the greatest value.

The PriceMetrix study also found that advisors who priced their services between 75 and 100 basis points of invested assets had the same amount of production directly from HNW households as those who priced between 50 and 75 basis points. There’s no difference there, so you might as well be on the higher end.

However, when price went below 50 basis points or more than 100 basis points, the number of HNW clients dropped off. That means that HNW investors are not price sensitive – they are value sensitive. You want to be in the value range.

5. Be willing to play the long game.  

You will not attract UHNW investors overnight. The previous four tips all take time, but the effort and money invested will be more than repaid once you get one or two clients.

In 1970, Harvard sociologist Dr. Edward Banfield, wrote a book called The Unheavenly City, and it described one of the most profound studies on success ever conducted.

Dr. Banfield wanted to find out how and why some people became financially independent over the course of their working lifetimes. He found that family background, education, intelligence, connections, and so on didn’t matter nearly as much as one thing….  “Long time perspective.”

That’s what Dr. Banfield called the attitude that was the single largest determinant of success. The people who became the most successful in life were the people who took the future into consideration while planning and making decisions.

This same idea can be applied to your career as a financial advisor; if you’re willing to invest in yourself now and put the work in now, you can reap the rewards later. That’s really how you attract UHNW clients. There’s no magic bullet (that’s for sure) but you can certainly maximize your chances of success by playing the long game.

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