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Lots has been written about what HNW investors want. I’m always fascinated by those unrelated yet conflicting articles: One attests a majority of clients would refer their financial advisor. Another claims a majority of clients are thinking of leaving their financial advisor. I recall the story of the advisor who cold called a person. They weren’t interested in becoming a client. He asked for a referral. They didn’t have one. He then asked if they had a business rival or someone they couldn’t stand. Give me their name. I’ll call them! But what do HNW individuals want in a relationship with a financial advisor?
Let’s start with three qualities that have stood the test of time.
- Helped someone they know. It’s the rationale for referrals. I’ve heard in Asia, the logic is: “I’ll have what he’s having.” A friend buys something. They want the same thing. Suitability is an issue, but at least they are interested.
- Solved a problem similar to theirs. It’s the rationale for niche marketing. They are a doctor with their own practice. They have unique issues. Your practice specializes in medical professionals with their own office and staff.
- Get them organized. Can you make things easy? Investing is your life. It isn’t there’s. It’s might be a component, like accounting services. They need someone to get it done, so they can concentrate on what they do best. Like running their business. Enjoying retirement.
Let’s look at other qualities, largely based on common sense.
- Integrity. You must be trustworthy. Looking out for their interests. Clients don’t want to be second guessing, asking mu accountant or lawyer if this is really good for them.
- Understandable. They get that you are an expert, yet want to know how an investment is supposed to work. One of my clients once said it best. “I want to know what I’m cheering for.” They don’t want to own things they don’t understand if they can avoid it. If they blow up, they look stupid.
- Long Term Relationship. They aren’t leasing a car with the intent of returning it in two years, then getting another one. Wealthy people often stay married for long periods of time. They want to make the right choice up front.
- Know how I want to communicate. The person who seeks to outsource their investments doesn’t want to be called daily, asking for a buy or sell decision. The options trader is different. The client who hasn’t figured out texting yet (there are still some) prefers phone calls. The woman who only texts or uses LinkedIn messaging probably stopped paying attention to e-mails. They have a preferred channel and frequency of contact.
- Preserve wealth. Here’s something obvious about wealthy people. They want to stay that way! They are usually comfortable getting a fair return consistent with their risk tolerance. They don’t need to shoot out the lights. You’ve heard: “You’ve got to speculate to accumulate.” They’ve already accumulated.
- No surprises. They want investments that perform as advertised. They don’t want crises after crisis. You can think of a few investment vehicles going back years, that tried to be all things to all people. They don’t need that. Generally speaking, they take the long view. Most are OK with volatility. Those who lose sleep should have minimal stock market exposure.
- Priced fairly. They aren’t shopping at Wal-Mart. They aren’t shopping at Cartier every weekend either. Although the businesses they own might try to get the best price possible, as individuals they know relationships, knowledge and experience have value.
- One stop shopping. They have lots of financial needs. They don’t want to shop around or start new relationships if they can avoid it. This is why private banking is very popular.
- Proactive. They want some leadership. You are the expert. Think about real estate for the moment. If the apartment next to theirs became available, they would want their realtor to tell them, suggesting they buy it.
- Dividends. Everyone admires Warren Buffet. Generally speaking, he wants to be paid while he waits. He is willing to have a long time horizon, but wants something coming in during the meantime.
You already possess many, if not all of these skills. Do people know?