14 Ways to Woo the Wealthy | Lord Abbett
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Practice Management

Advisors pursuing ultra-high-net-worth clients should be prepared to provide intensive relationship management.

To gain a competitive edge, advisors pursuing clients among ultra-wealthy individuals and families are using an array of sophisticated techniques designed to build engagement with existing clients and garner interest from new ones.

Defining the size of the market is tricky, though, as there’s some disagreement over the demarcation between high net worth and ultra-wealthy. Gauthier Vincent, a principal with Deloitte Consulting and the head of the firm’s U.S. wealth management practice, believes that the latter group represents the top tenth of the top 1% of global wealth and includes individuals and families with more than $5 million in investable assets. All told, he says, it encompasses approximately $4 trillion in value. The larger high-net-worth market, he says, includes individuals and families with investable assets of more than $1 million, for a total of $7 billion.

The Wealth-X and UBS World Ultra Wealth Report 2013, however, sets the bar a bit higher. According to the report, last year the world’s ultra-wealthy population—which it defines as those with more than $30 million in assets—reached an all-time high of 199,235 individuals, accounting for a combined fortune of nearly $28 trillion.

Yet another report from PricewaterhouseCoopers, Asset Management 2020, “A Brave New World,” predicts that regardless of market size, advisors pursuing ultra-high-net-worth clients should be prepared to provide intensive relationship management. “This group requires heavy-duty modeling and planning from a tax- and legal-structuring standpoint; they need philanthropic guidance, and they tend to be more globally distributed,” says Steve Crosby, a senior managing director at PricewaterhouseCoopers.

Financial services professionals and market experts, like Crosby and Vincent, identify 14 stratagems that can help advisors win and retain business from this ultra-sought-after group:

1. Cultivate relationships with stakeholders.
Most wealth managers tend to focus on the traditional family patriarch or matriarch, or the head of a foundation, and don’t spend much time with their spouses, children, trustees, or foundation managers. This could be a huge mistake.

“When the patriarch goes away,” Crosby says, “since there’s no relationship with the surviving spouse or children, you’ll lose 70 cents to 80 cents on the dollar of the portfolio.”

2. Understand what makes these clients tick.
Advisors must also truly understand the very specific needs and circumstances of each individual and family they pursue.

“Marketing to this group is not about talking to them about the latest hot investment or your service. It begins with understanding what’s important to them,” explains Rachel Perkel, head of marketing for wealth management at Wells Fargo Private Bank. “They may have family members they need to care for, or family members with special needs, for instance. Find out their unique interests and what they want their legacy to be.”

3. Engage with prospects and clients on a meaningful level.
Wealth managers who gain a deep understanding of their clients beyond their investment portfolios can engage with them in more profound ways. This might entail sending them thought leadership pieces on topics of interest to bond over a common interest.

“So much of wealth management at the high end is about the relationship and having discussions as a trusted advisor,” says Crosby.

4. Host highly targeted informational programs and networking events.
Programs on a host of topics, ranging from discussing wealth-related issues with children to new legislation, can serve as both an engagement strategy and a sales technique.

Gauthier Vincent recommends organizing affinity groups: “Some wealth providers create forums not only to educate clients, but to open opportunities for clients to network with one another.”

5. Segment and then segment again.
The ultra-wealthy aren’t drawn into a wealth management relationship by telemarketing calls during the dinner hour. It’s become essential for wealth managers to properly and granularly segment their ultra-wealthy prospects, and then develop highly tailored and customized outreach.

“It’s never a one-size-fits-all approach. More and more wealth management firms are trying to segment their client base, not just in terms of wealth tiers, source of wealth, or type of business but in terms of behavior,” says Vincent. “For instance, some ultra-wealthy clients, and even high-net-worth clients, feel they are part of the elite and want to be treated differently. They want very hands-on service.”

6. Pay attention to millennials.
There are approximately 90 million millennials who will inherit their parents’ wealth as the baby-boomer generation dies off. Often, it makes sense to reach these younger investors through their parents.

Sean Kelley, senior vice president for wealth management at UBS Financial Services, has built his multigenerational family practice by engaging with younger investors through their parents. “Children from wealthy families know they will be beneficiaries of trusts or other money that will come to them down the line and they want to be engaged,” Kelley explains. “I bring in the children with the parents’ blessing.”

7. Rely on referrals.
According to Steve Crosby, about 60% of leads come from referrals. Existing clients provide around 30% of the total, with another 20% from third parties, such as accountants, lawyers, and actuaries who serve the ultra-wealthy.

“We generate meaningful business from referrals,” notes Wells Fargo’s Perkel. “Frankly, we could be getting more. Relationship managers aren’t always comfortable asking and they should be.”

8. Discuss philanthropy and social impact.
Ultra-high-net-worth individuals not only tend to give big to charitable organizations but they also are concerned about the social impact of their philanthropy. This group appreciates philanthropic guidance and a deep understanding of the causes they are passionate about.

9. Couple smart investments with social responsibility.
Ultra-wealthy individuals think carefully about how their investments are benefiting others. “Millennials in particular are not necessarily in it just for the money—they’re in it to make the world a better place,” Crosby notes. “They want to build schools and build houses for people who need them, while still making a buck.”

10. Expand the suite of special services and offerings.
Advisors and their firms have to devise unique, tailored services to retain ultra-wealthy clients. In general, the higher the level of wealth, the more innovative the service offerings need to be. They can range from concierge services, like bill paying and travel arrangements, to more complex services, like scheduling maintenance on the family jet and planning proactively to respond to a medical crisis while traveling overseas.

11. Manage holistically.
Working with clients on their comprehensive financial needs can become a competitive differentiator that can also build client loyalty.

“Stock and bond brokers are a dime a dozen. I’m more of a problem-solver,” says UBS’s Kelley. “Wealthy individuals have various financial needs that can involve help with estate, investment or tax planning, as well as charitable giving. If you can solve a problem and demonstrate the ability to help these clients in other ways, you’ve elevated yourself above the rest.”

12. Hold clients’ hands when necessary.
High-touch personalized service is very appealing to some clients and intrusive to others. “Some clients might need more hand-holding, while others meet with their wealth managers twice a year,” says Wells Fargo’s Perkel. “In general, wealthier individuals are very busy, so every interaction needs to count.”

13. Work with family offices.
It behooves advisors to learn to work well with the gatekeepers of wealth—professionals with the responsibility of managing vast individual or family wealth—and develop a relationship with those managing the client’s finances.

About a quarter of ultra-high-net-worth wealth is handled through family offices, says Vincent. “That means it’s the staff’s responsibility to evaluate the wealth managers for the family.”

14. Use technology.
Don’t assume that older clients aren’t technologically savvy. “Many senior citizens who are wealthy can be plugged into their advisors through technology,” Crosby points out. “They’re able to see information and process it in a very effective way. Older people are one of the biggest growth areas for smartphones and tablets.”

Pursuing the ultra-wealthy segment of the market is one of the most demanding and time-intensive marketing initiatives a wealth manager can pursue, but it can also be the most rewarding. By diligently applying the above techniques, an advisor can effectively woo and win an ever-larger share of the world’s wealthiest clients.

— Peggy Bresnick 



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