When I started as a financial advisor, I built my clientele the same way as everyone else. Eventually I learned there was a more efficient (and far more fun) way based on community involvement. Later I applied these strategies on behalf community organizations for fundraising and membership. I even wrote a book about it, “Captivating the Wealthy Investor.” Here’s what I learned:
A Top Down Strategy Makes More Sense Than a Bottom Up Strategy
Prospecting is tough. Most advisors are thrilled to find people willing to talk. Later in the process, you learn if they have sufficient liquid assets to become a client. That’s a bottom up strategy.
Try a top down approach instead. Work to systematically identify prospects within the wealthiest 2-5% of your local market. Learn as much as you can about them. It’s amazing how much information is available about people online. For example, many professions require licenses. Who holds licenses for specific jobs is often available in the public domain.
Approach these people and get some interested in doing business, it’s highly likely they have sufficient assets available to become a good client.
It Can Be Easier to Meet Wealthy People Socially vs. Getting Them on the Phone
We value our privacy. Executives have screeners at work. They might live in gated communities. At a certain point in the lives of many successful people, they actively give back to the community. They support the arts. They become active in their religious organization. They reconnect with their alumni association. They join wine clubs and car clubs.
Think philanthropy. You want people with assets. Philanthropists have money to give away. Local museums and cultural institutions usually produce annual reports listing donors organized by giving tier. People wanting to opt out are listed as Anonymous.
These people often attend events at their favored organization because they want to see how their money is being spent. Annual membership is your cost of entry. It’s usually very low. You can get yourself in the same room with some of the people you identified in your top down research. You might even get an introduction through friends in common.
Everyone Needs Help With Something
The problems with social prospecting in community organizations quickly become apparent. Some folks are 30 years older than you. Others have 100 times more money. How do you talk with them or bring up business?
Meeting wealthy people in social situations is like dating. You need to start conversations with strangers, identify interests in common and lay the groundwork for seeing them again based on those interests.
Once you find those shared interests, you establish your value. People love sharing their passions with fellow enthusiasts or people sincerely interested in learning. You may know things they don’t. Everyone needs help with something.
When do you bring up business? They will ask: “What do you do?” Use this as an opportunity to learn about them. Don’t dwell on business. You first want them to determine they like you as a person.
People Want to Do Business With You, But Haven’t Figured Out Why They Need You
You are meeting plenty of people. You aren’t being pushy. Pushy can come across as desperate. Desperate people don’t get dates. In this case, the opposite of pushy is successful. You explained what you do, but didn’t push it. This implies you are successful. Successful people want to do business with other successful people.
You want to communicate Who you are, What you do and Why you are good. The first two are immediate, the third comes over time. That’s a dripping scenario. They will likely ask “How’s business?” You hear it as “How have you helped someone lately?” You tell short, anonymous success stories. They think: “That’s my problem!” or “I know someone who needs that kind of help.”
You want to learn Who they are, Where they work and What they do. This provides the opportunity to learn about their firm, its earnings, future prospects and competitors. You have plenty of opportunities to spot ways you can help them along with establishing yourself as an expert in your field.
Everyone You Want as a Client Is Someone Else’s Client Already
These wealthy prospects you rub shoulders with are likely middle managers, professionals or business owners. They may do business elsewhere. These people are used to sending out Requests for Proposals (RFPs) to help determine if they will stay with a particular vendor or make a change. It’s business as usual.
Do they carry this procedure over into their personal life? Probably not. They’ve probably had the same homeowner’s insurance policy forever. They likely don’t put their financial advisory relationship under scrutiny either.
Let them know you realize they work with a competitor. You respect that. When do they review the relationship they have with their advisor? You want to compete for some of the business. Can you see them a few days before they have their review meeting?
In broad terms, you position what you can do. Broad, because you haven’t done a financial plan yet. You ask for a specific amount of money. You wrap up the meeting.
When they meet with their current advisor, you are fresh in their mind. Reviews often involve reallocation. Money is in motion. It’s easy for them to take the sell, but not the buy recommendations. They use this as a way to raise money to send to you. You’ve got your foot in the door.
Everyone Should Have the Opportunity to Say No
You may consider some friends off limits. You think money might be tight or they are facing issues. Your information might not be current. Everyone should have the opportunity to say no. If you ask for business politely and they say no, that’s fine. Don’t make the decision for them.
All of these strategies are common sense approaches. Often we overlook them because we want a more complex solution. Why?
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