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Top tips for serving the wealthy
12 August 2010
As IFAs prepare their businesses for RDR, Maria Merricks finds out how to attract wealthy clients and hold onto them. Arguably the biggest challenge for IFAs setting up new businesses or smaller firms looking to expand is getting the first high-net-worth (HNW) clients through the door. Although attracting wealthy clients is no mean feat, advisers who have been successful say perseverance pays off. But how have they managed it? Step one: Define your ideal client and client proposition This might sound obvious, but clearly identifying your target client makes them easier to find. Advisers worried about alienating prospects by choosing a particular niche should not be concerned, according to Martin Bamford, managing director of Informed Choice. He says: “Niche marketing is much easier and more rewarding, because you can put all of your energy into a small group of people, demonstrating you understand and can solve their particular needs.” There is no precise definition of HNW, so advisers need to clarify what it means for them. For Jason Butler, partner at Bloomsbury Financial Planning, HNW clients are those with about £10m of net worth, half of which will be investable. However, Butler insists that the ideal client should have other attributes, aside from their level of wealth. He says: “We look for things such as: how they made their money; are they intelligent, nice, organised and decision-makers; do they have a good contact base and potential to refer us?” Butler’s advice is to draw up a profile of the person you are looking to attract. “Focus all of your efforts on understanding the needs, concerns, challenges, worries, hopes and communication style of this client. From here, define your client proposition. What benefits does your service provide? What can you deliver? What problems have they got that you can solve? “You must understand precisely what it is you do for your clients. It is no longer sufficient to say you are an IFA so can select the best products from the whole of the market. Bamford says: “Consumers have become a lot savvier and more demanding since that was an acceptable proposition.” Step two: Find the ideal client This step, Bamford says, is the hardest and, in the early days, advisers should concentrate on getting their message out there. This can be done by developing professional contacts, creating online content, networking, spending time with prospective clients and keeping up the momentum until you reach your goals. Networking can be a daunting prospect for some people, but Bryce Sanders, president of Perceptive Business Solutions, a firm specialising in training financial service firms in attracting HNW clients, says determination in meeting and socialising with wealthy individuals will be worth advisers’ time. He says: “At any event, try to meet six new people. After talk of family, conversation will always come round to what you do for a living. “Find out who they are, where they work, what they do and then tell them about you. Think, who, what and why: who are you, what do you do and why you are good. The first two will take a minute or so and the last point is to be reinforced each time you see them.” Sanders guarantees that it pays not to be pushy, an important point if you meet a potential client in a social situation: “When someone asks: ‘What do you do?’ respond with: ‘I’m a financial adviser. You probably work with one already,’ and stop. If they do not react, they probably know what you are doing, so change the subject and leave it there,” he says. “They may, however, provide an insight into their adviser relationship. Offer this: ‘It has been a difficult few months, if your adviser has been there for you, they are the best you’ll get.’ If they are happy, leave it. If they suggest there is room for improvement, try to get a business card and offer to call them next week. “At this point, the prospective client has the chance to pretend that they do not have a card. Leave it. If they do give you the card, quickly change the subject to something non-business-related, and ensure you follow up with a call.” Meanwhile, Bamford suggests using the introduction of the RDR as a way of attracting new clients. He says: “If I was starting again, one of my first targets would be IFAs who will not survive the RDR, and form strategic partnerships with them to take ownership of their most profitable clients when they retire. Reaching this group of individuals would mean networking at industry events, as well as direct marketing using mail shots, emails and phone calls.” Step three: Focus on client referrals Once advisers have acquired their ideal clients, it is important they maintain these relationships. Strong relationships can lead to client referrals and IFAs should never underestimate the power of recommendations. Butler says: “Focus your energy on being highly referable. Ask yourself: ‘Are you really the best, and would you, hand on heart, really choose your firm to look after your finances if you were not in the business?’ “Select and train only some of your clients to become your ‘referral champions’. Give them stories to sell, appropriate marketing collateral [a small number of business cards will do] and confidence that you have the capacity to handle new clients and that you will handle such enquiries professionally and respectfully.” Although Sanders agrees that focusing on referrals is an excellent strategy, he warns that some clients are worried to ‘go out on a limb’ where money is involved. “Be honest with them,” he says. “Tell them you want other clients like them; ask for advice and hope they will provide introductions.” Easy referrals, however, will come from ensuring you provide a stellar service and communication is the key, Sanders adds. He says: “Stay in touch and remain accountable with regular reviews. Many people have the impression that financial advisers are there for clients when everything is good, but disappear when it all goes wrong. Make sure that is not the case. Even if you make ten phone calls a day and, throughout a bad time, get shouted at on each call, constantly being there for your clients will be worth your while.” Published by IFAOnline
