Affluent Client Acquisition—The Future is Now!

Phoenix: "I think it's time that we focus on growing the practice" stated Mark. "We do a great job for our clients, we have good policies and procedures, and last year we focused on upgrading and transitioning our clients to where we were truly the "go-to" financial coordinator -- and it was a good year. But this year we need to focus on more affluent clients."

Phoenix: "I think it's time that we focus on growing the practice" stated Mark. "We do a great job for our clients, we have good policies and procedures, and last year we focused on upgrading and transitioning our clients to where we were truly the "go-to" financial coordinator -- and it was a good year. But this year we need to focus on more affluent clients."

In listening to Mark, it was apparent that his team had developed a strong foundation for being able to attract, service, and retain affluent clients. However, they were only excelling at servicing and retaining, which means his team was missing numerous opportunities for acquiring new affluent clients.

There are two important facts from our research that you should always have in mind when working with the affluent.

1. Word-of-mouth influence is the king, queen, prince, and princess of affluent marketing. As long as your top clients like you (which I'm sure they do), trust you (which I certainly hope they do), and respect you as a professional relative to their current needs (as Mark's team is now viewed as the "go-to" financial coordinator), they will introduce you to family members, friends, and colleagues. They will allow you to penetrate their centers-of-influence.

2. High-impact rainmaking activities are introductions, referrals, social networking, strategic alliances, and intimate events. Our research on advisors who successfully acquire 10 or more $1 million clients a year and our Rainmaker Best Practices highlight the importance of these face-to-face interactions. It is the fuel for marketing their services to the affluent.

There are two practice-management issues at work here: loyal affluent clients and affluent client acquisition (prospecting). In this issue, I am going to limit the discussion to prospecting and its relationship to servicing your affluent clients.

Prospecting, especially affluent prospecting, continues to be the biggest challenge facing the 21st century financial advisor. Progress is being made, but not enough. In late 2006, we conducted our second comprehensive research project to identify the key indicators that separate high-performance wealth-management teams from all the others. One of the performance indicators was attracting new affluent ($1 million or greater) clients. Only 17% were annually bringing in 10 or more fitting this profile.

This is statistically significance in many ways. High-performance teams are bringing in more affluent clients than individual financial advisors (17% versus 7%). Yet the individuals and teams who are successfully attracting new affluent clients are engaging in the same high-impact activities.

So, what are the high-performance teams and financial advisors doing to successfully attract new million-dollar clients? The answer is quite simple: They are active in the affluent playing field and adhere to a basic process of…

  • Identifying million-dollar (or greater) opportunities.
  • Getting personal introductions and referrals.
  • Orchestrating a subtle face-to-face with new opportunities.
  • Building strong rapport during the first face-to-face encounter.
  • Developing likeability and trust on a personal level.
  • Uncovering a window of opportunity within which to earn professional respect.
  • Managing new opportunities through their pipeline.
  • Clinching the relationship (closing the sale).

In talking with Mark, I asked him how challenging he believed each of these activities were for his team. He wasn't sure, but indicated that finding affluent opportunities and getting introductions was something he personally needed to work on. We had a chuckle as I explained that he had lots of company. According to our Prospecting Challenge Index, we found that nearly 70% of all financial advisors, whether solo or on a team, consider affluent prospecting a challenge.

Naturally, the more challenging an activity is perceived to be, the less likely people are to engage in the activity. Which is most likely the reason Mark's team had put off prospecting for new affluent clients. It is also the reason why…

The Future Is Now!

As you have heard me say, successful people are those who consistently do what the average person either will not or cannot do. Today, the average financial professional, solo or team, is not capitalizing on the affluent opportunity outlined in the two research facts at the beginning of this issue.

Our research begs the question: Are financial advisors, like Mark, simply giving lip-service to affluent prospecting?

Actions speak louder than words. So, as you begin to work your 2007 business plan, it's important that you make certain that affluent prospecting gets special attention. For most advisors, the challenge is simply a perception that is based primarily on inactivity.

All of this can and will change by action—actions in terms of client meetings (fully monetizing the relationship—upgrading) and high-impact activities that lead to a face-to-face meeting (introduction to new affluent prospect by a top client). The following are what we refer to as Rainmaker Critical Path activities, which involve servicing your top clients and prospecting.

Rainmaker Critical Path (high-impact activities)

  1. Client review meetings for client retention
  2. Client upgrade meetings to bring in new assets from current clients
  3. Client networking contacts to find affluent prospects
  4. Referral Alliance contacts to find affluent prospects
  5. Ideal Client prospect introductions
  6. Ideal Client prospect referral contacts
  7. Ideal Client prospect contacts through placing yourself in their path

It is important to be somewhere on this path every day. This will force the issue, but it will not totally solve the prospecting challenge perception problem. Skill training will help, but coaching is the best solution to improving one's affluent prospecting ability. Make a commitment to affluent prospecting, and if you're challenged, hire a good coach.

Without ongoing affluent client acquisition, your commitment to practice management will weaken. You must keep your practice in a growth mode, which means ongoing affluent client acquisition.

If you would like a FREE electronic form to help in managing your pipeline, go to Pipeline Tracker. Also, if you brought in 10 or more $1 million-plus clients over the past year and want to participate in one of our current research projects, visit 2007 Rainmaker Best Practices.

Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one. If you have any topic or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected].

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