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Why Your Future Client Is High Net Worth

Why Your Future Client Is High Net Worth

The middle class is toast. In the wake of the financial crisis, middle class families in the U.S. are burdened by too much debt, the rising cost of health care, fewer jobs and the ever-increasing price tag on retirement.

Financial advisors in the future who want to prosper need to hitch their star to high net worth clients, including , maybe even especially, those from outside the U.S. who are seeking a dynamic asset allocation approach designed to deal with rising global market and economic volatility.

It’s a reality that advisors need to embrace, but all too many are behind the curve. They are using old-fashioned methods to appeal to clients who are rapidly disappearing and who will in the future not be able to afford their products and services.

Mike Casey, a financial journalist and editor at the Wall Street Journal, explored these trends in his book, The Unfair Trade: How Our Broken Financial System Destroys the Middle Class. “The damage that is being done to ordinary, middle-income Americans means that the pool of these clients from which advisors can draw business won’t grow as quickly as it might have been,” he says. “A profound amount of wealth has been destroyed and it isn’t coming back.” 

This doesn’t mean that advisors should cut loose all of their babyboomer clients today. That would be foolish. As Casey notes, financial advisors can still find opportunities in the form of baby boomers who have secure employment and who are entering their peak earning years. But the real opportunity for financial advisors rests in the young wealthy, who are looking for advisors who can proactively help them manage their wealth with a wide variety of investments, including the new options that are coming due to the JOBS Act such as crowdfunding, impact investing and other value propositions which appeal to them.

To appeal to the new face of high net worth, especially the young wealthy, advisors need to embrace niche branding and marketing. The first step is to decide exactly what group of high net worth customers you want to serve, and to define that niche as narrowly as possible. Then get to know that niche inside and out – who they are, what they want, where they live and where they want to go – and target messages to appeal to that audience.

And while you’re painting that niche portrait, remember that 98 percent of all those who inherit wealth switch advisors. That’s both dangerous and represents a huge opportunity. Unless you define your brand, and fast, and communicate it to the marketplace you’re very likely to lose clients as your older clients pass on wealth to the younger generation. Conversely, you have the opportunity to pick up new young wealthy clients that other advisors can’t retain if you present yourself in the right way.

While generalities don’t cut it as far as niche marketing goes, it is still useful to have an idea of what the new young wealthy as a whole look like. The new face of high net worth and ultra high net worth is more international than in the past, Casey notes. “Without a doubt, the next generation of wealthy consumers will be more international in makeup,” he adds. “Already we’re seeing the ranks of high net worth individuals filling with Chinese and other names.”

I’ve seen that in my trips to Hong Kong and Kuala Lumpur. Many of those high net worth individuals – if they aren’t already here – are likely to come to the US in search of sophisticated financial advisors who can manage their investing portfolios and financial affairs. They want access to the best products and services available (which only the US can currently provide) and are savvy enough to be able to differentiate between those advisors who can really deliver on their promises and those who can’t.

Therefore, advisors need to be more nimble than ever in terms of developing and presenting an international perspective for these potential clients in terms of crafting portfolios that dynamically respond to volatile markets and economies. “These consumers will invest across borders and so will need expertise that draws on an international perspective,” Mike Casey says. “And to the extent that the instability and volatility of the present is not resolved, their portfolios will need to be dynamically managed with shifting allocations that depend on how the macro economic environment evolves.”

Not only do advisors need to offer the right advice, they also need to connect with clients where they are. That means social networking and mobile marketing. Young high net worth clients are not going to ask their parents or friends for a referral to a financial advisor and meekly pick up the phone and make an appointment; they are going to take any recommendations and search the web, doing their own due diligence. They will want to see robust social media profiles, posts on current events and cutting edge issues, and they’ll want that information delivered on their mobile device, not on a website that uses Flash Media that won’t display on their iPhone 5 or HTC One X.

So, for advisors who want to connect with high net worth prospects, they need to adapt to this new reality.  It’s time to figure out a niche, rethink your brand and get it out there, or get left behind.


April J. Rudin is the CEO of TheRudinGroup, a wealth marketing firm which creates campaigns and strategies for attracting and engaging UHNW/HNW clients for wealth managers, family offices, private banks, non-profits and others.  Specialized expertise in next gen wealthy, social media and digital messaging.



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