Chicago: “You make it sound so simple,” Helen said as I was leaving, “Why is it that we all make everything about the affluent so complicated?"

This a great question and one that I find myself frequently asking; why does the industry make attracting, serving, and developing loyalty among affluent clients so complex? I’m not certain there is one simple answer, but undoubtedly there is a fundamental lack of understanding from both ends: the affluent investor and the financial advisor.

Of course, this business is all about relationships. It always has been and always will be. Everyone agrees, but there is a disconnect somewhere.

Without getting too heavy on you, I think much of this revolves around social self-consciousness. People are always a bit intimidated around people who they perceive to be wealthier, more powerful, more educated, or of a higher social status. In a way, this might be the root cause—the reason why successfully serving affluent clients seems so complex. To get beyond this self-consciousness, you might want to try a simple exercise that will help you paint an intimate portrait of your affluent clients and centers-of-influence.

Ask yourself the following questions about each of them, and write down your answers.

Back to Basics

  • Career Aspirations / Life Goals (husband and wife):
  • Children (names, ages, school and outside activities):
  • Pets:
  • Extended Family Members (parents, in-laws, siblings, grandchildren):
  • Significant Events (birthdays, anniversaries, graduations, recognition awards, etc.):
  • Hobbies (husband and wife):
  • Concerns / Worries (husband and wife):
  • Charitable Activities (husband and wife):
  • Favorite Restaurants:
  • Favorite Vacation Spots:
  • Surprise and Delight Opportunities:

Or you can make your own list. I simply wanted to give you a visceral feel for the depth and breadth of knowledge required to develop serious affluent client relationships.

After all, that’s what the affluent say they want, according to our research. In our studies of affluent purchase decisions between 2004 and 2007, we found that “clearly understanding my goals and family situation when giving investment advice” was one of the eight criteria affluent investors wanted met when they chose a “go-to” financial coordinator. They also want proactive contact whenever the something happens that could have a major impact on their portfolios. And in our 2008 affluent psychographic research we found that among the factors contributing to an individual’s loyalty to his or her financial advisor is the expectation that the advisor “cares more about me than just my investments.”

Many people make the mistake of thinking that knowing and understanding are one in the same. They are not. You can memorize a piece of information about a client but have no understanding of its significance for that person. Without really understanding your affluent clients, it’s highly unlikely that you will know how to use your knowledge of their needs and interests to strengthen the relationship. For instance, knowing that my youngest son just graduated from high school doesn’t give you much insight into my family’s situation: You need to also understand how we feel about an empty nest situation and how we want to respond to that change.

To help you get to understanding, answer the following questions that focus on execution as they relate to your top 25 clients

:
  • When was the last contact? By whom?
  • When was the last face-to-face contact? By whom?
  • What was the outcome of that contact?
  • What is the opportunity?
  • When was the last surprise and delight action taken? What was it?
  • What is the next surprise and delight opportunity? What will it be?
  • What are the next action steps to be taken with this client? By whom?

None of this is rocket science. As I said, it's really back-to-basics. But it's work. To really understand your affluent clients to the extent that you are able to exceed their expectations and proactively penetrate their centers-of-influence requires a total commitment.

We're very excited about the launch of my new book, The Affluent Handbook - click here to listen to the introduction. Also, if you want to put some structure around your client loyalty process, download a FREE copy of our Know Your Client Worksheet.

Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one. If you have any topic suggestions or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at rich.santos@penton.com.