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How to Steal Clients in a Bull Market

Affluent loyalty is not determined by market fluctuations.

One advisor recently asked me, “How can you get affluent clients to change advisors when the market’s at an all-time high?”

His question highlights a misconception that has been around for a long time: When the markets are up and client portfolios are growing, you may assume everyone is happy. But that’s not necessarily correct.

One of our clients, for example, a true rainmaking team, brought in $32 million in September and $28 million in October. They also had an $8 million new client confirmed, but didn’t formally include that because all the funds had yet to transfer. Many advisors would celebrate bringing those assets in over a five-year period. What gives?

Whether it’s lack of training, not understanding affluent investors, fear, laziness, or some combination of these, many advisors use the bull market as an excuse for not prospecting.

Affluent Reality

  • Affluent loyalty is not determined by market fluctuations.
  • Affluent loyalty is determined by a combination of the comprehensive nature and professionalism of the services provided, and the quality of the relationship.
  • When markets are up, affluent clients do not credit their financial advisor for their portfolio’s performance.

Stealing Affluent Clients

Truly understanding the above (affluent reality) is a requirement for stealing clients. It’s also helpful to understand the perception gap between affluent clients and their advisor. For the past decade in our surveys of affluent investors and advisors, we asked questions to determine how the relationship was perceived. With very little variance year-to-year, a little over 25 percent of affluent clients viewed that they had a social relationship with their advisor, whereas nearly 75 percent of advisors thought they had social relationships with their affluent clients.

Opportunity awaits advisors with the right attitude. At least three-quarters of today’s affluent clients are not ideal clients, meaning they’re poachable if approached properly. Today’s affluent also want a primary advisor capable of overseeing the multi-dimensional aspects of their family’s financial affairs. For years we’ve been telling the industry that the affluent want a personal family physician of finances, or to use football parlance, a financial quarterback.

To get into your poaching persona, think of yourself as that good doctor at a social event, asking someone who’s been blowing their nose, “Have you had a flu shot?” Your version of the flu shot question is to simply ask, “Has your advisor reviewed your financial plan recently?” If not, you’re in. If they don’t have a plan, you’re in. If they don’t have a strong relationship with their advisor, you’ve got a foot in the door. Another approach is to ask, “When was the last time you had all of your financial documents reviewed?”

Both questions are intended to stimulate dissatisfaction, create a bit of pain, as our research is clear that the affluent want all of this being handled by their advisor.

Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients.

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