UHNW Prospect

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May 8, 2009 9:20 pm

Need some different viewpoints here...

One of my best clients introduced me to a friend who is retired and worth about $50 million.  We had dinner and when I asked if I could be of any service to him, he stated that if I had any good investment ideas, I should definitely give him a call to discuss them.  He said that he invests in all kinds of instruments and that he has three buckets... his "safe" bucket, an intermediate bucket, and his risky investments (he bought a LOT of Ford stock at $2).

My assumption is that being this wealthy, his "safe" money is taken care of... most likely all wrapped up in accordance with his estate plan.  Again, this is an assumption, not factual knowledge.

My ultimate goal, obviously, is to handle his safe money, the estate plan, etc..  However, I feel that he is positioning me to be a salesman (ie.  coming to him with good idea after good idea) instead of functioning as an advisor to him.  Additionally, I'm really not good at picking stocks and don't like "risky" investments.  I'm more conservative and value-oriented.

I'm not saying that just being a salesman to him is a bad thing... at that level of wealth any trade he makes would most likely be sizeable.  But I don't want to get started off on the wrong foot here.  I don't want to forever be pegged as an investment salesman.  My goal is to become a trusted advisor, planning and managing a good portion of his money.

How would you proceed?

May 8, 2009 9:51 pm

His "safe" money advisor doesn't do stock trades or other transactionable business, this is why he is asking you to do it.  You are already off on the wrong foot as he is talking to you about his play money.  Of course you invited this by asking the "service" question.  You should have asked him a UHNW question, like "What do you think of Obama's proposed tax changes?"  I don't care if he is a Dem, he doesn't like them.  Follow up with "my firm and I help premier investors such as yourself keep more of their own money, I'll give you a call next week to discuss a couple of ideas."

May 8, 2009 10:07 pm

I agree...

 
He is open to hear ideas, just change it from investment pitching to actual planning.
May 8, 2009 10:25 pm

Why not ask your prospect what they are expecting from you and then determine if they'll be a good fit for what your expertise is in?

May 8, 2009 11:06 pm
deekay:

Why not ask your prospect what they are expecting from you and then determine if they'll be a good fit for what your expertise is in?

 
Forget that. This guy has been around the block and if he is worth $50Mil you can't d*ck around. He is offering you the chance to earn a piece of his business. Give him an idea that will build trust and a muni fits the bill.
May 8, 2009 11:12 pm

I would go with the muni idea above, not that I have any clue what a guy with $50 million is thinking. .... Give him your best 'safe money' ideas and try to position yourself as his No. 1 advisor. It sounds like that's what you do for your regular prospects. You might earn his respect for being true to yourself and not falling all over yourself just to sell him some crazy growth idea. If you're already having dinner with this guy, you might be able to get into his circle a bit and get some referrals or do business with some of his network.

May 8, 2009 11:20 pm

This is a $50mm prospect and the best you can come up with is pitching him a muni?  Wow.  This is multi-generational wealth.  Why not talk to him about estate preservation strategies?  Maybe something like form a trust, fund an annuity with the trust as the owner, children as annuitants, grandchildren as beneficiaries.  Skip that nasty estate tax issue for an entire generation.  Keeps your money in your family.  Get about 60 years of tax deferred growth.

May 8, 2009 11:22 pm

Lets hear it guru ? What would you do ?

May 8, 2009 11:30 pm
Sam Houston:

This is a $50mm prospect and the best you can come up with is pitching him a muni?  Wow.



Maybe whip out the ICA guide?

Seriously, I'd love to hear what this guy is looking for -- and what the UHNW are all about, just in case I doorknock one.



May 8, 2009 11:30 pm
Sam Houston:

This is a $50mm prospect and the best you can come up with is pitching him a muni?  Wow.

 
That's what I was thinking...he could at least propose some Growth Fund of America.
May 8, 2009 11:32 pm

CIB is all he needs.

May 8, 2009 11:35 pm
Sam Houston:

This is a $50mm prospect and the best you can come up with is pitching him a muni?  Wow.  This is multi-generational wealth.  Why not talk to him about estate preservation strategies?  Maybe something like form a trust, fund an annuity with the trust as the owner, children as annuitants, grandchildren as beneficiaries.  Skip that nasty estate tax issue for an entire generation.  Keeps your money in your family.  Get about 60 years of tax deferred growth.

 
Sorry, was editing the post with a solution as you guys were asking for an idea.  Here it is off the top of my head.
May 8, 2009 11:43 pm
buyandhold:
Sam Houston:

This is a $50mm prospect and the best you can come up with is pitching him a muni?  Wow.



Maybe whip out the ICA guide?

Seriously, I'd love to hear what this guy is looking for -- and what the UHNW are all about, just in case I doorknock one.



 
Damn...you beat me to the American Funds punch line.  I thought it was pretty well served up though.
 
As far as what the UHNW want, we transferred in $500k from a lady a couple of weeks ago worth about $20MM.  She is trying us out specifically with actively traded stocks.  I'm not a huge fan of it, but my partner handles it.  I bring up to her what I do, safe money and protecting income streams, and now I have her and her husband coming to a retirement income planning dinner.  Maybe I'll get to do $1MM into a VA, who knows.  She said how much she liked her muni portfolio, so I don't need to go there...for now.
 
All of their money is in their businesses, munis, equities, and cash.  Other UHNW people have some real estate.   But for the most part, for as much money as they have, their investments can be pretty simple.
May 8, 2009 11:48 pm
Sam Houston:
Sam Houston:

This is a $50mm prospect and the best you can come up with is pitching him a muni?  Wow.  This is multi-generational wealth.  Why not talk to him about estate preservation strategies?  Maybe something like form a trust, fund an annuity with the trust as the owner, children as annuitants, grandchildren as beneficiaries.  Skip that nasty estate tax issue for an entire generation.  Keeps your money in your family.  Get about 60 years of tax deferred growth.

 
Sorry, was editing the post with a solution as you guys were asking for an idea.  Here it is off the top of my head.
 
Sam, WTF.  Empty your inbox. 
May 8, 2009 11:51 pm

Sorry, turns out I get a lot of PMs.  Mostly death threats.

May 9, 2009 12:00 am
Sam Houston:

This is a $50mm prospect and the best you can come up with is pitching him a muni?  Wow.  This is multi-generational wealth.  Why not talk to him about estate preservation strategies?  Maybe something like form a trust, fund an annuity with the trust as the owner, children as annuitants, grandchildren as beneficiaries.  Skip that nasty estate tax issue for an entire generation.  Keeps your money in your family.  Get about 60 years of tax deferred growth.



Okay, first of all I didn't just have dinner with him, but with my client, his wife, the prospect and his wife.  I couldn't get into that type of conversation at dinner.  This dinner is an annual thing I do for my clients when they come home from wintering in Florida - it's not about business.  So I had about 20 seconds to ask my "service" question to the prospect privately as we were walking out of the restaurant.

Again, this is an assumption, but I would figure that he had his lawyers draw up an estate plan long ago.  There may not be a need there.

I'm more concerned about two weeks from now, when I call him to meet me for coffee and I present some ideas.

 
May 9, 2009 12:05 am
Sam Houston:

His "safe" money advisor doesn't do stock trades or other transactionable business, this is why he is asking you to do it. 



Highly unlikely.  With that kind of money, I seriously doubt any advisor would deny this type of client a service they desired.  And before you say he's with some type of RIA/Fee-only/Managed Money advisors, I think (but am not certain) that he is with a big wire like SB or ML.  So stocks transactions are available.

May 9, 2009 12:06 am
etj4588:
Sam Houston:

This is a $50mm prospect and the best you can come up with is pitching him a muni?  Wow.  This is multi-generational wealth.  Why not talk to him about estate preservation strategies?  Maybe something like form a trust, fund an annuity with the trust as the owner, children as annuitants, grandchildren as beneficiaries.  Skip that nasty estate tax issue for an entire generation.  Keeps your money in your family.  Get about 60 years of tax deferred growth.



Okay, first of all I didn't just have dinner with him, but with my client, his wife, the prospect and his wife.  I couldn't get into that type of conversation at dinner.  This dinner is an annual thing I do for my clients when they come home from wintering in Florida - it's not about business.  So I had about 20 seconds to ask my "service" question to the prospect privately as we were walking out of the restaurant.

Again, this is an assumption, but I would figure that he had his lawyers draw up an estate plan long ago.  There may not be a need there.

I'm more concerned about two weeks from now, when I call him to meet me for coffee and I present some ideas.

 
 
This is the idea for the second conversation. First conversation was three sentences, "taxes?, I can help, I will call."  Easily accomplished in 20 seconds.
May 9, 2009 12:18 am
etj4588:
Sam Houston:

His "safe" money advisor doesn't do stock trades or other transactionable business, this is why he is asking you to do it. 



Highly unlikely.  With that kind of money, I seriously doubt any advisor would deny this type of client a service they desired.  And before you say he's with some type of RIA/Fee-only/Managed Money advisors, I think (but am not certain) that he is with a big wire like SB or ML.  So stocks transactions are available.


 
 
Let me phrase it a different way.  You don't call your lawyer for a $10 parking ticket.  You only call him for important stuff.
May 9, 2009 5:52 am
Ron 14:
deekay:

Why not ask your prospect what they are expecting from you and then determine if they'll be a good fit for what your expertise is in?

 
Forget that. This guy has been around the block and if he is worth $50Mil you can't d*ck around. He is offering you the chance to earn a piece of his business. Give him an idea that will build trust and a muni fits the bill.
 
So why not do the counter-intuitive thing and not throw up product? 
 
How do you know a muni fits the bill?  What about a CRT?  Or Life Insurance?  Or real estate?  Or investing in YOUR business? 
 
You have no clue what he wants or needs, so why not ask him what he wants or needs?