Six Ways to Attract the Affluent | Lord Abbett

Tracked Funds

You have 0 funds on your mutual fund watch list.

Begin by selecting funds to create a personalized watch list.

(as of 12/05/2015)

Pending Orders

You have 0 items in your cart.

Subscribe and order forms, fact sheets, presentations, and other documents that can help advisers grow their business.


Practice Management

Strategic alliances with other professionals can help advisors draw valuable clients.

This Practice Management article is intended for financial advisors only (registered representatives of broker/dealers or associated persons of Registered Investment Advisors).

Many financial advisors may ask themselves: What is the most effective way to attract multimillion-dollar clients? These high-net-worth (HNW) clients can be quite valuable, because working with them may allow advisors to decrease their client count while increasing their income at the same time.

One of the best ways to grow your HNW client roster is by forming a strategic alliance. A good strategic alliance can entice valuable clients and help trigger considerable growth in your business. In fact, I have seen advisors who master this strategy double their net income and triple their assets under management (AUM).

A sizable majority of advisors (61%) we surveyed in 2007 said that their five best new clients came from referrals from other professionals. That’s far better than the usual basis of referrals, existing clients, who were cited by just 23.4% of advisors as being the source of their most-valued new clients. Although this survey is almost a decade old, I have observed that the same holds true today.

That said, strong strategic alliances take persistence and, most important, a well-organized process. Here are six key steps in empowering advisors to build alliances that can generate results.

1) Have a well-defined client experience in place. This alone won’t persuade a potential alliance partner to work with you, but you’ll be sunk without it. That’s because you will need to demonstrate to any potential partners that you have a systematic, replicable process that enables you to deliver great service to clients on a consistent basis.

As you’re surely aware, professionals such as accountants and attorneys are often reluctant to work with advisors or send referrals their way. One big reason is they worry they are sending their top clients into a lion’s den of uncertainty. But by having a carefully crafted, well-defined process for working with affluent clients, you will be able to show these professionals exactly what their clients will experience when they come to you.

2) Know your potential alliance partners. Good potential partners are those who work with affluent clients in your target market, are in a position to build trusted and long-term relationships with those clients, and want to grow their businesses. That gives you plenty of options to consider.

Accountants and attorneys are the obvious first professionals with whom to consider forming alliances, because they work with clients on key financial issues that relate to your role as an advisor. In particular, private-client lawyers who specialize in trusts, estates and asset protection can be great resources.

There are many other types of professionals who fit the bill, including life insurance specialists, association executives, business brokers, investment bankers, consultants, CEO groups, property casualty agents, and media outlets.

3) Identify ideal partners to pursue. Don’t feel overwhelmed by all the options. You can winnow down the list of potential allies pretty quickly by creating a profile of the ideal strategic alliance partners who will guide your search efforts. This profile should include traits you’d like to see in a potential partner, as well as non-negotiable attributes.

Armed with an ideal profile, you can create a master list of candidates. Your first step should be to ask your wealthiest, most ideal existing clients with whom they work. The CPA Directory is a great source for finding accountants, as is your local or state CPA Society. For attorneys, there’s the American College of Trust and Estate Counsel.

At this point, it’s time to make calls and reach out to potential partners. Tell them you would like to discuss joint opportunities during an exploratory meeting. This is a tough call for many advisors to make—it can feel a bit like cold calling. But you may be shocked by how many “Yes, let’s meet” responses you receive. The reason is simple: these professionals often need help with business development and growing their practices, too.

4) Begin the consultative strategic alliance process. This is a series of meetings to have with potential partners that will ensure all stakeholders are clear about expectations and goals. It’s designed to maximize success if you choose to move forward with a partner—as well as to help you recognize when it’s best to move on and look elsewhere.

The first step is the aforementioned exploratory meeting, during which you interview the candidate about issues such as the key services their clients are currently asking for, what their ideal clients look like, what the professional does to differentiate the firm from the competition and some of their biggest marketing successes to date.

If you proceed together, the next step is to meet with any other key decision makers within the firm to assess their openness to working collaboratively on behalf of shared clients. This is also an ideal situation in which to discuss the systematic approach you use with your clients to ensure great experiences.

5) Create and present an action plan. From there, you’ll move on to develop a strategic action plan that you and your alliance partner can use to create a road map for a successful relationship. This plan should include a description of the challenges and opportunities facing the potential alliance partner, the benefits to the other professional of entering into an alliance with you, and a series of steps you recommend taking together to serve your mutual clients and grow your respective businesses.

For example, consider launching a pilot program in which you first take the firm’s partners through your investment process. Then offer your services to the firm’s 10 top clients. Once you’ve proved yourself to partners and the top clients, you can extend your service offering to the rest of the client base.

Your plan also needs to include some sort of economic glue that will keep the alliance together for the long term. Economic glue can include a revenue-sharing arrangement, but it also can be created by helping the other firm grow its business and address its challenges.

You should develop the plan in partnership with the key professional at the other firm you are working closest with. By collaborating, you won’t miss any important points and will increase the chance of getting the crucial buy-in from any other partners.

When you present the plan to stakeholders, you will highlight all the reasons why an alliance makes sense—for you, for the other firm and for the clients you’ll be serving together. Listen for pushback and adjust accordingly, if it makes sense to do so. Ultimately, you should reach an agreement to form an alliance and move ahead.

6) Communicate and track progress regularly. Once everyone is on board, implement your strategy to work together and set up a series of check-in meetings so you can track your progress.

The Bottom Line
Executing well on these steps is not an easy or fast proposition. But there’s no denying the power that well-crafted strategic alliances can have on your business.                 

—By John J. Bowen Jr.

John J. Bowen Jr., a Financial Planning columnist, is founder and CEO of CEG Worldwide, a global training, research and consulting firm for advisors in San Martin, California.


Please confirm your literature shipping address

Please review the address information below and make any necessary changes.

All literature orders will be shipped to the address that you enter below. This information can be edited at any time.

Current Literature Shipping Address

* Required field