A dvisors who aspire to building a high-net-worth practice can take some cues from the medical community.
Back in January 2002, The New YorkTimes ran the following front-page headline: “Doctor's New Practices Offer Service for Deluxe Fee.”
The article went on to detail a practice in which people paid premium prices for premium services — in this case $4,000 a year (in addition to medical costs covered by insurance) in exchange for 24/7 cell-phone access to doctors, same-day appointments, house calls for nutrition and physiology exams and personal accompaniment by doctors to specialist visits.
In essence, these physicians were positioning themselves as “go to” medical providers for about 300 select patients — their self-determined professional capacity.
Obviously, this required the participating doctors to abandon the trappings of a traditional medical business. They quit their hospitals and entered the world of business lines-of-credit, leases and fixed costs as they started their “deluxe” medical practice.
This is not so far removed from what is required of an advisor diving into the high-net-worth market. The high-net-worth niche is crying out for this type of service, and the first step to meeting this demand is to put a stop to the delusional belief that a handful of high-net-worth clients constitute a high-net-worth practice.
Making the Leap
To achieve a true high-net-worth practice (and enjoy the benefits that flow from it) an advisor first needs commitment to the endeavor. He also needs conviction that focusing on this niche is the right thing to do, confidence in his abilities to succeed and the competency to be able to deliver on promises.
Let's break these down:
Conviction means believing without proof. An advisor must be convinced that if he does the hard work, ventures outside his comfort zone, performs his fixed daily activities and maintains his metrics scorecards, he can achieve his goals. This requires reviewing a business plan and asking, “Are the goals believable? Are they attainable?” The answer to both these questions needs to be “yes.”
Confidence can be either the pillar or killer of success. Confident people don't have to sit around thinking and talking about it; they get up and go do it. You can be assured our physicians had negative thoughts and worries fleeting through their minds as they started their “deluxe” medical practice. But we know they acted upon their goals, not their feelings. The most effective method for building confidence is doing specific activities that are directly linked to a serious goal.
Competency evolves from acts undertaken in confidence — not by taking classes or reading books. Competency is also the product of doing the right things. Because a high-net-worth prospect's selection of a financial advisor is primarily emotional, the largest incomes will go to those possessing the best selling and relationship management skills — not the necessarily to the best financial planners. Do you know how to connect in an affluent social setting and then use a financial impact point to position yourself as a high-net-worth financial solutions provider? When asked, are you able to explain your work in a succinct and intriguing manner that creates curiosity and a follow-up question? Can you discuss fees with confidence? Those who cannot answer “yes” to all the above are ill-prepared to attract high-net-worth clients.
While practicing the above, keep in mind that today's high-net-worth investors have a dilemma: They want help in protecting and expanding their assets, yet they are frequently dissatisfied with the help they have been receiving in this area from their financial advisors.
The advisor's challenge is to attack this dissatisfaction head on, with an eye on restoring the client's confidence. A tall order in today's economic environment — but an achievable one for advisors who concentrate on following the steps mentioned above.
What I'm prescribing is a whole new way of doing business — a large leap from the daily activities of a traditional stockbroker, and even several steps beyond the approach taken by many financial advisors. The idea is to replace the one-dimensional relationship of managing a high-net-worth client's investments with one that is multi-dimensional and serves to coordinate every aspect of the wealthy client's financial affairs.
Once an advisor has become convinced of the importance of making the leap, his capabilities will steadily improve. When preparation and activity meet opportunity, success is virtually guaranteed.
Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. oechsli.com