Skip navigation

Definition of Affluent Investor

or Register to post new content in the forum

19 RepliesJump to last post



  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
May 13, 2010 4:56 am

In a social situation, an aquaintance asks, what do you do?

" I've been a financial advisor for about a decade, helping affluent clients with investments. "

What comes to mind, in terms of account minimum, when you think of the words, " affluent investor " ? 

May 13, 2010 12:27 pm

Investable assets of >250k

May 13, 2010 1:32 pm

If you say that to an ordinary person at a cocktail party, they are thinking of $1mm+ portfolios.  I can guarantee you that virtually nobody that has a $250-750K portfolio considers themselves "affluent".  To most people, "affluent" sounds a lot like "rich" or "nearly rich".  You picture someone driving a Mercedes or Range Rover, a well-landscaped home, going on nice trips, etc.  So unless you want to turn people off, I wouldn't tell people that you serve the "affluent", unless you are really only looking for $1mm+ portfolios.  Plenty of my clients have net worths well north of $1mm (with 401K, pensions, homes, investments, etc.), but live in 40 year old ranches and drive pickups, and never earned more than 100K per year.  They would NOT consider themselves "affluent".

That word also might only work well in an area of extreme affluence, where you want to sound exclusive.

May 13, 2010 3:16 pm

I would say affluent is $1M plus... if you have $250K and you are 55, you are screwed....

I think if you cage it and say "mass affluent" then $500k+...

But why not just say( i hate your line already but)... I work with investors who have a minimum investable portfolio of (then name your amount)....

By the way as soon as you say "financial advisor", they are looking for somewhere else to go..

May 13, 2010 4:07 pm

 Right. I like the idea of just stating the minimum in a social conversation.

I played golf with a wealthy investor yesterday, who asked me what I do, and asked if I specialize. It was easy to give him my message, and he talked about his business during the rest of the round.

Here's what I'm trying to say, if anyone wants to help me create a line you don't hate.

(I don't want to get into a debate about my simple service or wrap accounts, because they have been working for me for over a decade, and I'm just looking to pick up four or five million new AUM on the golf course this summer.)

1. 100k min.

2. Wrap accounts with mainly low cost ETFs (indexes). Flat management fee.

3. Focus on stock-bond allocation, growth and income. For example, in the last ten years, in a flat stock market, most of our growth has come from stock dividends and interest  from bonds and cash.

Minor tactical adjustments (bond sectors, energy, materials, U.S. , international, etc.) based on economic expectations or oppportunities.

4. High level of personal service - small support staff . Long term relationships.

5. General financial planning advice (experienced CFP). Big picture: how do your investments now affect your taxes in retirement, if you die today, how does your family take cash flow from the portfolio?

I maintain a broker dealer affliation so I am fully licensed and regulated to work with insurance, annuities, mutual funds and other investment and protection vehicles.  

(Looks like I got this down to five fingers talking points.)

May 13, 2010 4:34 pm

Milyunair, No offense, but isn't that pretty much what EVERY advisor has to offer?  I mean, you may be REALLY good at what you do, but if you just summarize what you stated above, it would be like a brochure for a wrap account at a wirehouse.

I would focus more on the problems you solve, or the specific client-types you work with (tailored to who you are with or who you want).  Also, something to make you sound a bit different than the typical wirehouse advisor (sorry if that's what you are).

I would try to work with points 4,5,6.  What exactly is "personal service"?  That's what every big firm professes to offer.  Maybe indicate something with point #4 that sparks interest, rather than just "asset allocation".  What do you hope to accomplish with it?  Downside protection?  What do your results say about how you manage money?

Investors today are looking for something unique.

May 13, 2010 4:49 pm

1. 24, I agree the millionaire next door got there by keeping his head down. But I think he wants to be treated like he's special. He knows he's affluent, and wants to be recognized. These days, that's probably looking more like 250k - even though a million ain't what it used to be. For the purpose of symantics, and words, and PR, I think he still wants to stretch.

2. Good points. I want to think about them. The thing is, what I do is profoundly simple. I think I can show people who I am ( on the golf course), and need to deliver some meat.

Break it down more, telling people how unique you are just comes down to a lot of BS. Being simple and straight forward is a form of differentiation.

I am definitely selling the idea of understanding how you pay me as your advisor. That is a  huge trend and a great hook. Do you even know how your advisor gets paid? Most people don't. Ironically, when you expose the 12b1 fees and jack up the (visible) wrap fee, folks don't mind paying you. That's a form of differentian that ties into stuff guys are hearing on the radio from Mutual Fund Store and others.

 But let me think about it, I want to refine my elevator speech.

May 13, 2010 6:05 pm

The only point I was making is that if you tell a potential prospect that you only cater to "affluent" investors, they might make the assumption that their 500K portfolio won't cut it.  Or, other than their 500K 401K, they might not have much else.  And many people just don't equate a big 401K balance with "wealth" (in their own minds). 

A lot of us (us as in advisors) don't think about it much, but it is much nicer to have a client with a $500K 401K but huge pension and SS income, rather than a $750K client that needs to take 8% withdrawals every year.  Most of my clients have pensions, so there are very few that actually have to take regular withdrawals from their IRA's.  One is going to get wealthier every year, one is going to get poorer every year.  I have some clients that have 100K in guaranteed income every eyar between pensions and SS.  That's probably worth $1.5mm in terms of overall wealth.

Not sure where I was going with that, other than the fact that some people just can't see their entire "wealth picture" for what it is, and you jsut don't want to turn people away that may have "quiet wealth".

May 13, 2010 6:29 pm

B, I totally agree. For that matter, my broker dealer affiliation allows me to provide different services and get paid in different ways, so new clients don't have to be rich. And "rich" people can be a pain in the butt.

That's great out-of-the-box thinking to point out that a pension implies greater net worth. That's what I'm looking for, a marketing and positioning discussion.

I watched the body language on my golf partner yesterday perk up when I said, " lots of personal service". I'm wondering about what goes on in the mind of the affluent. Come to think of it, there are a few books out there I should check.

May 13, 2010 6:31 pm


By the way as soon as you say "financial advisor", they are looking for somewhere else to go..


Thats why I'm always evasive.  People flee if they think there is the slightest possibility that you are going to sell them something.  I dont answer the question directly and when prodded I tell them don't worry I'm not taking on new clients.

You would be surprised at how many people want what they can not have.

May 13, 2010 6:42 pm

My kind of sale. First they flee, and then they come circling back around the campfire.

May 13, 2010 6:45 pm

That's a good point.  I actually hate the term "financial advisor".  It just screams "salesman!".  I simply have never thought of a very good way of responding to this question.  If I were independant, I might say something like "I run an investment firm".  I can think of all kinds of good lines, but they just sound corny in practical use.

May 13, 2010 6:57 pm

That's because everyone (insurance only salespeople, not rrs) started calling themselves advisors, about fifteen years back.

I use, " I manage portfolios for my clients, using low cost index funds, like Vanguard. As a CFP, I provide comprehensive personal financial advice. I've had my own practice for () years.

If they ask more, I give it, before turning the focus back on them.

Premier, in all seriousness, if a HNW social companion starts drilling into my business ( do you specialize, how are you affiliated, how long) I am going to have some well-honed answers that demonstrate focus, commitment, differentiation with social finesse. Because, where appropriate ( depending on if the guys are just talking golf, or talking big) I am going to expect some interesting answers from him about the how and why of his success.

Tell me most guys don't want to talk about that. Business aside, it's fun to think and learn about the other guy's business.

May 14, 2010 2:16 pm

Why not, "risk consultant"... says you work on fee, consulting is so broad it could mean anything... Risk applies to everyone...Further in the conversation if they ask why you just didn't say you were a financial advisor, metion that that is whay everyone calls themselves and what I do is much different.

May 14, 2010 2:47 pm

Good converstion guys!

I ski here in Colorado and meet people from all over the world. I get asked several times a day in ski season what I do to make a living in such a great place.

It is true telling someone that you are a Financial advisor is like saying you are worship satin. Complete silence. 

I tell them I own an independent financial planning frim here in town. I have also followed with I only work with select clients.

They are mostly tourist so I know I will not pick up clients and I would rather hear about them on our  ride up the mountain.

To pick up clients and get my name out ino  the community I joined a ski club that meets every week and ski's  together. 

It is true you need to join groups and do things you truely enjoy and then you will find common ground with your prospects and clients.        

May 14, 2010 4:21 pm


It is true telling someone that you are a Financial advisor is like saying you are worship satin. [/quote]

I've found that people are more put-off by worship of rayon and other man-made fibers.  I myself am drawn to praise and adoration of silk.  Sometimes a guy just wants to feel special underneath....

May 14, 2010 4:21 pm

Good points. Get to know them socially, first. People in groups talk about you when you're not around. Getting those first clients is the slow part.

May 14, 2010 4:43 pm

Aug 8, 2015 9:36 pm

The definition of an affluent investor differs from county to county and many times city to city; even within the same state. An affluent investor in Santa Clara County CA may live in the hills with the CEOs of high tech companies or may live in an agricultural area. Each area will have its own section of affluent investors and the portfolios managed will differ significantly. My belief is an affluent invest may defined by the belt of investors with investable assets the range of 35% and 95% of average investable assets on average within the subset vicinity being considered. Red Blake