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If you've prospected for millionaire clients, you've probably sought out individuals with social status and the material trappings of wealth. Indeed, the nation's affluent are portrayed in the popular culture as an elite tribe of bluebloods, professionals and corporate CEOs with jet-setting lifestyles. But the reality is quite different. In fact, today's breed of millionaire is more likely to drive

If you've prospected for millionaire clients, you've probably sought out individuals with social status and the material trappings of wealth. Indeed, the nation's affluent are portrayed in the popular culture as an elite tribe of bluebloods, professionals and corporate CEOs with jet-setting lifestyles.

But the reality is quite different. In fact, today's breed of millionaire is more likely to drive a Camry than a Caddie. He or she is a hard-working small-business owner who lives in a relatively modest home and steers clear of debt.

Many financial advisors may be overlooking these folks. Owners of small and mid-sized businesses (those with under 500 employees) make up 39 percent of wealthy U.S. households (with $3 million or more in net worth), according to Tiburon Strategic Advisors, a market research and consulting firm serving the financial-services industry.

“Many people are more interested in appearing wealthy than in developing the discipline necessary to achieve millionaire status,” says Kerry Johnson, a “sales psychologist” and consultant who heads Peak Performance Coaching and has studied the affluent for over 25 years. They may live in million-dollar homes and drive expensive cars, but these “pseudo-affluent” — as Johnson calls them — often use credit-card debt and home equity to maintain that image. And, if interest rates continue to rise, he notes, many of them will deplete their assets altogether. That's not the kind of client who will help you build your business.

What does all this mean for your prospecting efforts? You might start by shifting away from glamorous professions and ritzy neighborhoods and towards small businesses and solidly middle-class areas. And instead of offering expensive perks like fancy meals to hook prospective clients, focus on providing solid education on key topics through seminars. The mid-tier millionaires, who aren't obsessed with status symbols but rather with making their money last, will be less impressed by a a nice Pinot Noir than with good information and smart strategies.

The Who's Who of Millionaires

Most people are clueless about how one becomes wealthy in America, says Professor William Danko, chair of the department of marketing for New York State University at Albany. Danko, who co-authored the landmark book The Millionaire Next Door in 1996, has been studying high-net-worth Americans for over 30 years. His current research still supports that book's central findings: Wealth in America is not accumulated through advanced degrees or intelligence. “More often, it's the result of hard work, diligent savings and living below your means,” he says

You might be surprised to hear, for example, that physicians don't necessarily make great financial-advisory prospects. (Exceptions to that rule, analysts say, include certain lucrative specialties.) “Many brokers are trained to hunt big game in medical facilities, for example,” says Johnson. “But the lifestyles of physicians are often defined by society's expectations. Their incomes have been severely hurt by managed care and rising malpractice costs,” he says. “But, since they're in a prestigious working position, they often find themselves great credit customers and can easily live beyond their means.”

“I know a doctor who earns $400,000 a year,” adds Danko. “The problem is, his lifestyle requires $450,000 a year to maintain. Sadly, he admits he can't afford to retire,” Danko says. High income should never be confused with high net worth, Danko stresses. In fact, the average physician earned $218,000 in 2003, according to the most recent Physician Survey conducted by the Washington, D.C.-based Center for the Studying Health System Changes. And, that number is down from $236,000 in 1995 dollars, when inflation and malpractice insurance rates were far lower than today.

Ultimately, advisors would do better to check out some less-sexy professions for prospective clients. Each year Inc. magazine publishes the “Inc. 500” — a list of the 500 fastest-growing, privately-owned U.S. businesses. From 2002 to 2006, the top 10 revenue earners on those lists were companies in energy, insurance, computer technology, telecommunications, construction, health services, real estate services, environmental services, business services, personal financial advisory, cleaning products, collision repair and defense contractors.

In its April 2005 issue, the magazine also listed “The Top 10 Industries to Start and Grow a Business,” based on the Bureau of Labor Statistics' job-growth projections for 2002 to 2012. Those industries were the following:

  1. Internet and data-processing information services
  2. Computer systems
  3. Software
  4. Employment services
  5. Management, science and technical consulting
  6. Home health care
  7. Personal financial advisory
  8. Childcare services
  9. Arts, entertainment and recreation
  10. Motion picture/video

There are some important common threads among many of the industries where these American millionaires can be found, says Danko: Many don't require a college education. “They lend themselves to family-run businesses, lower start-up costs and have fewer barriers to entry,” he says. “But these owners have built a loyal clientele by truly understanding the markets they're in and how to fulfill their customers' needs on a sustainable basis.”

One great way to reach millionaires in these niche professions is by contacting industry organizations. “The IT technology and computer systems industries, for example, have numerous association meetings,” Johnson says. “Everyone needs speakers, and one of the hottest topics in America is ‘Investing for the Future’,” he says, so try volunteering yourself. Or acquire an association directory: “A ‘warm’ call to a member of the state home health care society may meet with less resistance than you think.”

A Couple of Cases

Rick Martin, who heads Martin & Co. Financial Services (representing ING Financial Partners) in Omaha, Neb., has been working with Johnson for just over two years, learning to identify and court the so-called “truly” affluent. “We have a large number of millionaires in Omaha,” Martin says, “but you'd never guess by looking. We have farmers and small-business owners who've never made more than $30,000 or $40,000 a year, but have scrimped and saved for decades. Now, they find themselves millionaires. They live in average-sized homes, don't wear Rolexes and come to my office in jeans. I think they've worked so incredibly hard for their money that they can't justify spending it on certain things.”

Martin prospects for wealthy clients predominantly through seminars, typically hosting four to six per month on topics like Stretch IRA programs, probate issues and strategies for minimizing estate, retirement and other taxes. Johnson helped him understand that offering free meals is not a great gimmick and that he needs to word his invitations carefully to discourage freeloaders. He's identified his target prospect as someone between 55 and 80 who owns a home and has annual retirement income of $250,000 to $500,000, so his invitations specify that and he tries to pre-qualify attendees. The most critical lesson he's learned, he says, is to never confuse status with wealth, a lesson that might easily be lost on newer advisors. So far, so good. In the two years since he revised his prospecting strategy, Martin says his production has risen from $190,000 to over $400,000.

Joseph Wirbick, senior vice president of Lancaster, Pa.-based Boyd Senior Planning, also hired Johnson to help him drive business growth. “I didn't want to work harder,” the CPA says candidly. “I work four days a week, leave the office at four, and take plenty of vacations. I wanted to work smarter,” he says. “If I made three sales a week, I didn't want to grow by making six. I wanted to make three bigger sales.”

Like Martin, Wirbick prospects mainly via seminars. He, too, learned that finding the affluent required tweaking his invitations and changing the backdrop from dinner at a fancy restaurant to coffee at a “nice but middle-of-the-road eatery. The truly affluent are attracted to a good financial education, not a free meal,” he says. And, he doesn't send invites to the ritziest areas, but rather to solid, middle-class neighborhoods. The changes have paid off: “Now, if I get 20 attendees at a seminar, I find that 80 percent to 90 percent of them have assets of $1 million or more. That just wasn't the case two years ago,” he says. And, in under a year, his net revenues have grown to $1.5 million from $800,000.


The number of U.S. millionaires (people with a net worth of over $1 million (excluding primary residence) rose 8 percent in 2005 to 8.9 million in 2006, according to TNS Financial Services, a global market-research firm headquartered in London. More U.S. millionaires (more than one-third, in fact) make their homes in California than in any other state, says TNS Financial Services.

What's more, millionaires rarely lead pampered lives of luxury. Research from the Claritas Corp., a San Diego-based market-research firm specializing in compiling demographic data for commercial use, indicates that in 97 percent of cases, they live on less than 10 percent of their wealth. In contrast, the flashy jet-setting elite accounts for just 5 percent of millionaires nationwide, according to the research of “sales psychologist” Kerry Johnson.

The average millionaire in this country is 57 years old and the average billionaire is 59, according to statistics from Chicago-based Northern Trust Corporation. Millionaires typically come from a middle-class or blue-collar background and likely graduated from a state university, Johnson says, citing statistics from the Claritas Corp and U.S. Trust in New York.

Billionaires often come from more well-heeled backgrounds. While Donald Bren, Mark Cuban and other billionaires went to state schools — and Bill Gates left Harvard in his freshman year — a recent study of 234 U.S. billionaires by Forbes magazine revealed that the majority finished college and 100 have some form of advanced degree. Only 41 — or 18 percent of those 234 billionaires — didn't get an undergraduate degree, and two didn't finish high school. Where are you looking for new clients?


U.S. counties with the greatest numbers of millionaire households.
County/ Major City State Total Millionaire Households
1. Los Angeles County, Los Angeles Calif. 262,800
2. Cook County, Chicago Ill. 167,873
3. Orange County Calif. 113,299
4. Maricopa County, Phoenix Ariz. 106,210
5. San Diego County, San Diego Calif. 100,030
6. Harris County, Houston Texas 95,593
7. Nassau County, (Long Island) New York 78,816
8. Santa Clara County Calif. 75,371
9. Palm Beach County, Miami Fla. 69,871
10. Middlesex County Mass. 67,552
Source: TNS Financial Services, 2006
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