Understanding The Affluent

Are you targeting the affluent? Are you interested in acquiring clients with larger pools of assets? Of course you are. Every financial advisor is aiming for larger client accounts these days, and in particular, they are trying to capture a piece of what has become known as boomer affluence. (By now, unless you have been living in a closet, you've heard more than you probably want to about this boomer

Are you targeting the affluent? Are you interested in acquiring clients with larger pools of assets? Of course you are. Every financial advisor is aiming for larger client accounts these days, and in particular, they are trying to capture a piece of what has become known as “boomer affluence.” (By now, unless you have been living in a closet, you've heard more than you probably want to about this boomer cohort, but read on. I've got some good advice.)

For years I have been saying to anyone who will listen, if you are serious about working with the affluent you must become a student of the affluent. So what do we know about them? The majority of today's affluent originate from what was once America's rock-solid middle class. In other words, most of your ideal prospects have not spent their childhood years being educated at boarding schools and raised by nannies — they are like you and me. And whether you believe it or not, they have middle-class values just like you and me. They are probably living a lifestyle that was not accessible to them in childhood, and some of them aren't even able to fully appreciate it.

Here are a few affluent boomer facts from our research worth knowing:

  • Ninety-three percent of them are self-made, and know what it's like to “work your way up” the ladder of success. Yes, they recognize that they are successful, but they don't like being referred to as either affluent or wealthy — that's for the trust-fund babies.

  • They work long and hard, many averaging over 50- to 60-plus hours a week. These affluent boomers are time-crunched, and crave convenience at every level, which is why it is important to hold face-to-face meetings when and where it is opportune for them.

  • They are a highly stressed-out group. Many of these individuals come from dual-income families, and are working feverishly just to maintain their current lifestyles. The kinds of lifestyles they want to lead go well beyond the basics of raising, educating and marrying off their children, which, by itself, requires a lot of time, attention and money. They also expect expensive vacations, country-club memberships, three or four cars, and so on.

  • Thirty-nine million of these boomers are now 50 years old or older. That said, they do not like being referred to as “seniors” or “aging boomers.” They also happen to be the most self-centered and least civic-minded generation in recorded history.

  • They talk about retirement, but are increasingly pushing back that retirement timeline and continuing to work.

Most financial advisors spend millions to advertise to this group. But advertising raises expectations, and our survey respondents send a clear message about that: To secure their long-term business, you must walk the walk by becoming fully competent at providing the solutions they want. You must deliver value by offering the necessary range of services. You must provide highly personalized, relationship-driven service.

Of all the findings from our Affluent Purchasing Decision (APD) research, the most surprising was our respondents' intense skepticism toward basic sales and marketing techniques — especially when it comes to financial services. Another surprising result was their level of consumer savvy. You might think people with giant disposable incomes and middle-class backgrounds would conduct less research about their purchasing — and would be less discriminating — because they can “afford” to make mistakes. The opposite is true. Today's affluent are more discerning, because they've learned from past mistakes. But as crusty and defensive as these well-heeled prospects can be, they will do almost anything for you once you prove yourself — once you break down the barriers and develop a relationship based on mutual trust and professional respect.

Which brings us full-circle on today's affluent: Serve them, cater to them, put up with all of their idiosyncrasies, provide top-quality products and services (that they need and want), and they will reciprocate with loyalty and positive word-of-mouth influence (which is the how they make major purchasing decisions). Continue to study the affluent and you will be prepared to fully capitalize on the changing affluent demographics.

Writer's BIO: Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. oechsli.com

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