The financial advice game may have changed, but here are some old standbys that are essential for working with the affluent.
It's amazing how empirical data can provide you with a blinding glimpse of the obvious. Our most recent study tells us that today's affluent consider it extremely important that their primary financial advisors provide unbiased financial advice. Can you imagine? Essentially, today's affluent want a financial advisor to be exactly what the industry has been promising for the past 10 years: a trusted advisor. I recognize this is a broad statement, but we can break it down into very specific criteria.
Our most recent research has identified the 10 most important factors today's affluent are looking for in their primary financial advisor. I've taken to referring to this list as the 10 Affluent Commandments.
The 10 Affluent Commandments
My financial advisor must…
- Always have my family's best interest in mind when he makes decisions.
That the affluent feel compelled to identify this factor as a commandment speaks volumes. We are dealing with a very skeptical consumer.
- Fully disclose all fees.
This is textbook and a result of years of confusing pricing and mistrust in the industry. However, this doesn't mean that the affluent are looking for steep discounts. They want to pay a fair price for the services they are receiving, but they want to know what exactly they are paying.
- Resolve all problems quickly and to my satisfaction.
It's always easier for financial advisors to talk with clients during bull markets. Yet, the affluent need good counsel during these tough times more than ever. Solve whatever problems you can, and remember unnecessary client worry is a problem that good communication can resolve.
- Consistently meet my investment expectations.
The only way to meet a client's investment expectations is to successfully manage those expectations. Incorporating an Investment Policy Statement into your practice would be advisable.
- Provide me with clear and timely communication.
This should be a simple matter, but from the affluent client's perspective there is room for improvement. Be careful about relying too heavily on impersonal contact (emails, newsletters, etc.) — the affluent want direct communication.
- Deliver high-level personal service to my family.
You must consistently deliver Ritz-Carlton-quality service — and improve upon it.
- Focus on overseeing my family's financial affairs, not marketing his/her practice.
Do not let the sales person in you shine through. The affluent are very mistrustful of sales and marketing people, so you need to have nearly invisible sales skills.
- Should possess industry knowledge in breadth and depth.
The affluent want you to be a true knowledge worker and to grasp the complexities of their families' financial affairs. The more you know the more value you can provide.
- Keep me informed of any events that might impact my family's portfolio.
Good or bad, whatever the news, the affluent want to be informed. This requires timely communication during tough times.
- Care more about me than just my investments.
The affluent do not hold their financial advisor responsible for this category five financial tsunami (they blame “Wall Street” and “the government”). But they do want to be reassured that their financial advisors truly care about their families. This requires knowledge, empathy, and is defined by actions.
The common thread woven throughout these 10 Affluent Commandments is commitment and principles. The affluent want their financial advisor to be totally committed to them as well as their profession. They also are demanding integrity. The game has changed, but in a way, all of this is back-to-basics. If you approach it with the right attitude, crisis can bring out the best in you.
is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients.oechsli.com