Migrating Up Market: How to Find, Win, and Retain High-Net-Worth Clients. “How do I move up market? How do I attract and retain more high-net-worth clients?” These questions I commonly hear in conversations with financial advisors and CPAs. In my day job, I spend my time meeting with financial advisors, CPAs and attorneys across the Southeast region. For the past 30 years, my firm has partnered with advisors to manage high-net-worth investment portfolios (typically with a $1 million minimum)—particularly for clients referred to as the “working wealthy.”
“How do I move up market? How do I attract and retain more high-net-worth clients?” These questions I commonly hear in conversations with financial advisors and CPAs. In my day job, I spend my time meeting with financial advisors, CPAs and attorneys across the Southeast region. For the past 30 years, my firm has partnered with advisors to manage high-net-worth investment portfolios (typically with a $1 million minimum)—particularly for clients referred to as the “working wealthy.” These are highly successful individuals who have either saved a pool of financial capital during their working years, inherited their assets, developed their wealth in real estate, or sold their business.
I’ve written previously on how a sound investment methodology, disciplined risk and tax management can help attract and retain these clients, but how can an advisor that employs sound investment management take it take it a step further?
My aim with this article is simply to highlight some of the best practices I’ve observed from working with some of the top advisors in the industry, while working with City National Rochdale.
Obviously, the most important piece of the puzzle is having a sound investment process, risk management discipline, active tax management, and above all subscribing to strict ethical standards. For the purposes of this article, I want to take the next step and assume that the trusted advisor is embracing a sound, prudent investment methodology, centered on the tenants of modern portfolio theory, employing tax and risk management. So, we must ask ourselves, if we are doing these things listed above, what are some things we can do next to attract and retain clients in our practice? What are some of the top advisors in the marketplace doing?
Find
Meeting the Right Prospects
Sometimes, just finding the right prospects can be a challenge. One common thread we have found among successful advisors and CPAs is that their clients are more than just business to them—they’ve forged positive relationships through shared interests and communities.
When it comes to networking, it’s important to find events that not only attract your desired clientele, but also involve organizations and activities that you have a personal interest in. Sharing a passion with a prospect is a great way to break the ice, and getting involved in your community can be an organic way to find potential prospects.
Below are a few examples:
• An advisor we work with is the past president of a local school board, a position that allowed him to meet a lot of people (some of whom eventually became clients) and show that he cared about the community.
• Another advisor donates to the community from a fund with his firm’s name on it—a great way to both publicize his business and give back to the community
• A CPA who is an avid hunter who meets a lot of great prospects at his local safari club, for which he is a board member.
We have also worked with advisors who’ve served on city councils, run for public office, or otherwise worked to make a social impact. Through these activities, they able to both meet potential clients and build credibility to help eventually win them. In addition, civic groups such as Rotary, Kiwanis, and other civic clubs can help you get involved in your community and find prospects.
Some financial professionals have come up with more creative ways to engage high-net-worth individuals. Here are a few real-world examples from the field.
An At-Home Networking Event
One advisor we work with has a friend who had recently added a state-of-the-art, chef-style kitchen to his house as part of a remodel. Recognizing an opportunity to create a social event that would both showcase the friend’s new house and get in front of high-net-worth prospects, the advisor asked the friend to let him host an event for clients and prospects. The advisor invited a local chef who was very popular in the community and who turned out to be a great draw. The chef described his process as he prepared each course, and the mix of clients and prospects enjoyed a nice dinner together. The event gave the advisor an entertaining and successful way to engage many high-net-worth prospects in a relaxed social environment.
Turning Passion into Opportunity
We partnered with one of our advisors, who is an avid racecar driver, to host an event for prospects at a local road course that included both a 45-minute instruction session on how to drive racecars and an investment presentation, thereby combining a pitch session with an entertaining activity. The advisor then taught each prospect how to drive the course by sitting in the passenger seat and instructing them. He also offered defensive driving classes for teenagers and asked his best clients to bring their children and grandchildren in for a lesson on how to avoid obstacles they may encounter as new drivers. By turning his passion into a business event, the advisor was able to connect with potential clients on a personal level.
CPAs Helping CPAs
After getting his start as a traditional tax practice, one CPA we work with eventually began offering wealth management services to his clients. Seeing a business opportunity, he reached out to fellow CPAs and presented himself as a resource to help them expand their practices as he had. With his unique business model, this CPA presently partners with other CPAs to offer wealth management services to high-net-worth clients. Collectively, they manage several large relationships and present solutions as a team. This approach allows them to scale their respective practices and meet new prospects.
While the specific activities and networking events available to you will vary depending on where you are, we hope the examples given here can serve as a springboard to help you find new ways to get in front of prospects.
Win
Engaging the Prospects
Even if they’re impressed by your credentials, clients want to know if you’ll be the right fit for them—and the criteria are very subjective. It’s important to find ways to stand out from the competition and showcase your skill set. Sometimes, that involves getting creative.
For example, one advisor’s office had a decorative board to greet visitors by name at the door, making a unique welcome sign the first thing they see. This was an impressive way to show the team’s dedication and commitment to providing a personalized touch.
Here are a few winning strategies we’ve seen from advisors:
Emphasizing the “Why”
One of the top producers in the country at his firm, this advisor has a unique feature to his practice. When you walk into his office as a prospect, one of the first things you see is the firm’s “Why Wall,” which is filled with images of real clients posing with something they want to accomplish once their financial goals are reached. A few examples include a client on their boat, vacationing in their motorhome, or with their classic car at a car show.
“We believe that people need a clear vision of what they want to accomplish in life—something that drives them to do the hard work and save the money today so that tomorrow, they can live the life that gives them joy,” the advisor says. “We started hanging pictures of our clients’ visions in our office. The Why Wall helps us to remember the objective behind what we do as an organization. It is easy to spend time and money on today, but you need a strong why in order to spend time and money on tomorrow.”
Quality Time Off the Grid
A wealth planner we work with had an opportunity to present his firm’s services to a large prospect who’d recently sold their business. Determined to make an impression, he rented a cabin in the mountains, where he was able to spend quality time with the prospect with minimal distractions—and even spend a little time fly fishing with the prospect in at nearby stream. The wealth planner brought all of the providers he was proposing, including City National Rochdale, to this intimate setting, giving the prospect a chance to really get to know him and the people he works with.
Focusing on the Big Picture
An advisor we work with approaches his practice as “effectively structuring a family office for clients, but not requiring a family office net worth to qualify.” He not only offers quality asset management, but demonstrates to clients that he has a hold on the big picture and provides a structure and experience similar to private banking.
Retain
Maintaining a Positive Client Relationship
Even after you’ve put in all this work to attract a new high-net-worth client to your firm, you shouldn’t simply rest on your laurels. While performance, reaching goals, and reviewing and adjusting strategies where necessary is paramount, a successful advisor will go the extra mile to maintain a positive client relationship. Here are a few examples.
Mixers for a Good Cause
One advisor hosts annual events for his clients, and each year, he chooses a different theme. This year, he picked a Wild, Wild West Casino Night at his local country club. Not only are these events mixers for his clients, but he has also built in ways to raise money for charity.
The advisor also applies a unique philosophy to working with clients. “We can't control what happens in the stock market and whether the client’s investments outperforms or underperforms over any given time frame. So we don't focus on that. We help fun, generous individuals transition from successful careers to significant second acts by developing a financial plan that both addresses their needs and brings up things they haven’t considered—like tax strategy. While we can’t predict how an investment opportunity will perform, we can show them how the difference our strategies can make over the long term. When you have conversations that show hard dollar value like tax efficiency and get to the heart of what people really want to do in life, managing their money is a secondary conversation.”
Communicating Dedication
When it comes to communications, this advisor ensures that his clients know he’s dedicated to them as people. Through video newsletters and birthday wishes, he makes sure to add that personal touch. And when his clients come in to review their accounts, he goes beyond the standard investment review to provide a comprehensive review of their financial picture as it relates to their lives and goals.
Clients, Community, and Charity
One firm we work with hosts an annual weekend event for their high-net-worth clients. What started two decades ago as a way to get involved in the community eventually raised millions in donations for March of Dimes and the Pat Summitt Foundation and evolved into a client event.
Many clients visit from out of state, and asset managers host lunches, dinners, and golf outings. The clients are housed in a single hotel to give them the chance to network, better know each other, and learn about the advantages of working with the firm. Not only does the event help with client retention, but it encourages referrals. This event has proven to be a great way to engage clients and raise money for charity.
Conclusion
Hopefully, this article has given you some good ideas to help you grow your practice. The most important elements are always centered on a sound investment strategy, a passion for helping others, and willingness to get involved in our communities. If we always strive to maintain excellence in everything we do, our work should be considered a success.
Michael Adair, CFA, AIF® is Managing Director, and Senior Vice President with City National Rochdale. Based in Alabama he works closely with the firm’s high-net-worth clients, entertainers, and athletes through relationships with financial professionals, CPAs, and estate planning attorneys.
