By Gordon Ross
How do you equip your firm to target larger clients? How do you do it without having to knock down your firm and start again?
First: should you actually do it?
Let me be clear, I am not saying you turn away a large client that walks through your door, but it is important to ask yourself whether you should devote time and resources to pursuing larger clients.
What the fastest growing firms have in common is that they have a very specific target client in mind (irrespective of size) and they then obsess over what that client wants. For example, some firms might say that their target client is relatively small and suspicious of a “Wall Street approach,” so they build an investment offering that is efficient, simple to understand and low cost. It is hard to argue with that.
Sure, but let’s say we definitely want to do this, what is the first step?
First, make sure you build out the capabilities required to actually handle a large client if they walk through the door.
If we look at your investment platform first, if a prospect was to have a portfolio of Hedge Funds and Private Equity, would your firm know how to analyze those and suggest a road forward? If this is a challenge, the good news is that much of it can be brought in from outside. At Dynasty we work with a number of third party research solutions, such as Callan Associates, to help build out due diligence capabilities.
What about your client reporting process? Can it handle a client that wants to use multiple custodians or has plenty of alternative investments? This is where it is crucial to have a top client reporting solution. It can turn the client reporting process into something advisors are actually proud of and use as a selling point. The ability to give the client something that feels personalized to them is crucial.
As for non-investment related service items, what if your client was a company founder and was looking to sell their firm. Would you be able to help them with that process? For example, our Network firms work with a group of investment banks that cater towards the RIA industry. They are very used to working with advisors to find a solution for the end client and it allows the advisor to maintain that position of being the QB of the client’s financial affairs.
Does your firm have a financial planning process that you meet the demands of an UHNW individual? This is a key area where we see plenty of hiring right now and many firms are utilizing technology (such as eMoney or MoneyGuide Pro) to build out their capabilities.
The power of COIs
There is a philosophy that an UHNW client is not going to respond to any direct marketing. What is more likely is that the individual already has a team of advisors (lawyers, accountants, etc.) and they will look to them to advise them on who to hire as a financial advisor.
We strongly recommend firms focus resources on building relationships with Centers of Influence (COIs). The best firms treat their COI pipeline the same way they view their prospect pipeline. They categorize COIs by importance and devote resources to treating their top COIs like royalty.
For example. Corbenic Partners in Pennsylvania is a firm in our Network that specializes in working with franchise owners of fast food restaurants. They focus much of their marketing and outreach on COIs that specialize in this area too and the overall result is that many COIs that operate in the franchise world know Corbenic as the “go to” firm.
Be careful what message your marketing is sending about your firm
What you put out into the market place will speak volumes about your firm’s core competencies. What topics has your firm written about in the past? What is the target client your advertising is aimed at? What does it say about your value proposition? Sounds pretty obvious, but let’s say that your firm is well equipped to deal with large liquidity events, does it say this anywhere on your website or in any PR your firm has done in the last three years?
If your firm is not presenting to the world that you have structured processes to handle the types of challenges faced by UHNW clients then there are plenty of firms out there that are clearly communicating that value proposition to the market.
Coming back to the example of Corbenic Partners, they package their services very specifically for franchise owners. For example, cash management is actually a big issue for these clients and Corbenic frames much of their marketing around illustrating these core competencies.
Crafting your marketing so that you prove you are the solution to a very specific problem is especially important for COIs because any good COI will do research on you before recommending your firm to a prospect. You need to equip that COI with good evidence that you are the right firm to recommend.
The strategies we have talked about in this article do not require you to strip down your firm and start again. Rather we believe building out the capabilities that a large client would expect, while communicating to the world that you can actually cater to their needs, is crucial.
Gordon Ross is Director of the Enterprise Group at Dynasty Financial Partners.