UHNW Prospect
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“Again, this is an assumption, but I would figure that he had his lawyers draw up an estate plan long ago. There may not be a need there.”
It doesn't make sense to make this or any other assumption. Why not ask him questions? As for this specific assumption, it might be correct. An estate plan drawn up long ago, however, may very well not satisfactory for today. Also, lawyers put together legal documents. We handle the funding. I know that when someone tells me that there attorney has taken care of their estate planning, there are absolutely other things that should be done.He may own Muni’s. That doesn’t mean that he should own them.
It seems to me that all assumptions are unreasonable when the alternative to making assumptions is to simply ask questions. My advice would be to ask some questions and then lead with whatever will maximize the chance of making him a client.Look, if you keep up this kind of second-guessing of yourself, this prospect will turn into a china-egg and NOTHING will get done.
#1 - Get an idea of his expectations and make sure that you know what YOUR expectations are and that there is a fit. #2 - Complete a fact-finder. Never assume ANYTHING with ANYBODY. If he balks, you need to explain that for you to do your best work, you need to know the kind of planning that has already been done. I think it's funny how a lot of investment guys get dollar signs in their eyes when they hear about other people's money. The relationship is the same, the advice is the same. If you're ready to drool over this guy, then you're not ready for a relationship with a guy with an 8-figure net worth. His money doesn't matter unless he sees that you can provide value and that you see that he will fit in the practice you are trying to build. Be ready to say that his expectations aren't a fit if they really aren't a fit for you and the kind of work that you do.Muni bonds are terrible… He would be better of in an EIA or possibly a lot of whole life…(I switched to italics to indicate the sarcasm)
Ice I agree... if you have $50MM networth, you probably have $2-3MM in some type of liquid form... Muni's are great way to go..I understand the whole get a spot at the table theory, but if you wanted to be Martha Stewarts personal chef, you wouldn’t start with a PB&J. Tease him with a bigger concept. If he doesn’t like it ask why. In twenty seconds, he has already discussed his three buckets of money. He wants to talk about himself.
munis are a safe bet, but if you wanna get his attention, show him a convertible bond. this guy is intrested in ~special situation ideas~ so bring him something unique and timely. and ask him to place a sizable trade. have conviction in your idea.
do good for him and there will be perks...lots of perks. go get em!!![quote=Sam Houston]Sorry, turns out I get a lot of PMs. Mostly death threats.[/quote]
How fitting…
[quote=iceco1d]
Let me preface this by saying that I'm not being a d*** here.
But, as I look on this page, I see posts from 3 insurance heavy guys, that PROBABLY do most of their business with regular people (i.e. "I can make a decent buck selling insurance...almost everyone I meet is a qualified prospect). Not saying you don't have experience with UHNW people, and not saying you do. But PLEASE illustrate an example where approaching this guy with a couple of good, solid, muni bonds is going to be a problem. Please also illustrate an example for me, where a guy with $50MM in net worth (lets assume, he's not on death's doorstep - since he was at this dinner, and socializing pretty nicely, and lets assume that at least a few $MM of this net worth, is liquid and investable), should NOT have exposure to high quality municipal bonds? I hear what you guys are saying about planning - the approach with the muni is STRICTLY to get him to place an order, and get you "at the table" with his other advisors and professionals. After you get him to place 1 trade, go hog-wild with anything else you want to try to do. Get a seat at the table first. A muni is probably his best shot @ doing it. Bondguy, chime in whenever you are ready. I'm sure you've landed various HNW, and even maybe UHNW prospects, by getting a seat at their table by selling them a good local muni first...correct me if I'm wrong.[/quote] It's not a question of whether approaching him with a Muni Bond is a bad idea or not. This isn't just a cold call. There's at least a small relationship which means that it is very likely that the guy will meet face to face. I just think that asking the guy, "What's your biggest financial concern?" or something else that gets him talking is a better way to go than to pitch a product. He may say, "I'd love to generate some more tax free income." He may say, "I have more money than I can ever spend. I just want to figure out the best way to pass my wealth onto my kids." If it's the former, munis can be great for him and pitching a good bond would be a great way to get a seat at the table. If it's the latter, what good are munis? What's the point of generating tax free income for someone who doesn't need income? What would he do with the tax free income? Reinvest it in more Muni's? What's the end result if he invests $5,000,000 in munis and gets an average of 5% over the rest of his lifetime, which unfortunately, only lasts 5 years? It grows to $6,380,000. After Federal and State estate taxes (assuming50% federal and 16% State), his beneficiaries will get $2,170,000. When Bond Guy is cold calling, he is just looking for prospects/clients. I think that takes a very different approach than when someone is saying "I want this specific person as a client." When you want a specific person as a client, I think that it would be common sense to ask that person what it is that they want to accomplish. This is especially true when the rep has the ability to get face to face with him on a favorable basis. Ice, let me ask you a question. What is the advantage of pitching a muni bond instead of actually talking to the guy to see what makes him tick? (My practice does not focus on UHNW. There is no net worth focus in my practice. It focuses strictly on occupations. Attorneys, CPAs and business owners are the only people that I call and will go see without a referral.)At least I have not been banned 17 times and counting, have a competing site, and still post here more than my own site. Did I miss anything Bobby?[quote=Sam Houston]Sorry, turns out I get a lot of PMs. Mostly death threats.[/quote]
How fitting…
Ice, he didn't invite that meeting to take place. We'd all be broke if we were waiting for that invitation. The OP should ask for that kind of meeting. Since they just had dinner together, there is a very good chance that he would get the meeting. If the guy balks at the meeting and says, "I'm just looking for the occasional good investment idea", absolutely use munis to get in the door.
I guess my point is that we don't have to guess at a way to get in the door when there may be a sign out front that says, "Welcome. Please come in."A second meeting will take place. He meets with his retired buddies 3 times a week for coffee in their hometown, so I told him that I was vetting a few ideas in light of the current market conditions and that what I could do was call him to meet for coffee to discuss - he said “absolutely”. So I’m not worried about getting a second meeting.
The reason I’m even asking about this is because eight years ago I inherited a HNW doctor who thought of me as an investment salesman. It took me until last month to finally become his one and only advisor by ACATing everything to me. I don’t want this to take a similar course in terms of time, so I’d like to be proactive about shifting his paradigm about me from the get-go.
The guy is 70 years old and I don’t think he’s going to hand over everything to me after working with others for many years. Someone said that he is giving me the opportunity to earn a piece of his business - I think this is correct. However, having the “fact finding” conversation may be a turn-off to him. Don’t you think this type of guy has been approached like that at least 100 times over the years?
I hate to say it, but after the giddiness of getting in with this guy wore off, I felt like Charlie Sheen to his Gordon Gekko… and that’s not where or who I want to be.
At least I have not been banned 17 times and counting, have a competing site, and still post here more than my own site. Did I miss anything Bobby?[/quote] A competing site.... That is a bit of an overstatement.. that site sucks.. no one is ever there the last post is always from 3 months ago..terrible site..[quote=HAAIC] [quote=Sam Houston]Sorry, turns out I get a lot of PMs. Mostly death threats.[/quote]
How fitting…
[quote=iceco1d]
Let me preface this by saying that I'm not being a d*** here.
[/quote] Whenever someone begins a sentence like this, inevitably he winds up being a d1ck.[quote=iceco1d]I see your point. I suppose I took this…
[quote=etj4588] when I asked if I could be of any service to him, he stated that if I had any good investment ideas, I should definitely give him a call to discuss them. [/quote] as, "I'm just looking for blah blah blah" and NOT necessarily a new wealth management plan. Maybe I'm being too much of a puss with my interpretation... [/quote] He may mean "investment idea". My experience is that in a lot of cases "investment idea" doesn't mean squat. It means, "I am not sure what I want to do with my money, but I have no way to verbalize exactly what I want. Therefore, I'll say I want an 'investment idea.'" And FWIW, I don't have a minimum to work with someone. However, I have many clients who are HNW. They just happen to have most or all of their wealth tied up in their business. Munis may be the way to go. So may an EIA or WL or real estate or penny stocks. Ultimately I'll find out what he wants and sell it to him. You'll try to sell him and have no clue if he wants it."However, having the "fact finding" conversation may be a turn-off to him. Don't you think this type of guy has been approached like that at least 100 times over the years?"
I don't know. Maybe having investments pitched towards him without asking questions will be a turn-off. It doesn't have to be a full in-depth fact-finder. If you simply ask him about what he wants to accomplish, it will tell you the direction that he wants to take.
[quote=anonymous]
“However, having the “fact finding” conversation may be a turn-off to him. Don’t you think this type of guy has been approached like that at least 100 times over the years?”
I don't know. Maybe having investments pitched towards him without asking questions will be a turn-off. It doesn't have to be a full in-depth fact-finder. If you simply ask him about what he wants to accomplish, it will tell you the direction that he wants to take.
[/quote]I get that... but he's the one that told me to call him with an idea.
So… call with an idea.
Just be sure that you can back up the suitability of the idea with proper fact-finding.[quote=etj4588] [quote=anonymous]
"However, having the "fact finding" conversation may be a turn-off to him. Don't you think this type of guy has been approached like that at least 100 times over the years?"
I don't know. Maybe having investments pitched towards him without asking questions will be a turn-off. It doesn't have to be a full in-depth fact-finder. If you simply ask him about what he wants to accomplish, it will tell you the direction that he wants to take.
[/quote]I get that... but he's the one that told me to call him with an idea.
[/quote] Yes, but you can't possibly have a good idea for him without knowing what he wants to accomplish. If he doesn't want to meet, he doesn't want to meet, but you have no idea if he wants to meet or not because you have not asked him. "Call me with an idea." is not equivalent to "Only call me with ideas. I don't want to meet.". Phone call: You: It was nice meeting you the other night. I do believe that I have some ideas that may be of great interest to you. First, though, I want to find out a little bit of what exactly you had in mind. Do you have time to grab a cup of coffee this week or is your schedule a little freer next week? Him: Blah, blah, blah You: Great. I'll see you on Thursday. Either the guy is going to meet with you or not. If he won't, it's more than likely that when he said to call him with ideas, he was blowing smoke up your ass.
[quote=anonymous]
Either the guy is going to meet with you or not. If he won't, it's more than likely that when he said to call him with ideas, he was blowing smoke up your ass.[/quote] As I said earlier, I'm not concerned with getting the second sit-down. I'll get it. After thinking about his for a while, I feel as though I may have to begin with this prospect by coming up with some good ideas to get him comfortable with me. Meet with him a few times, grow the account, and then start bringing up some estate planning techniques like purchaseing life Insurance in an ILIT to pay estate taxes... and then see where that conversation goes. Timetable should be about six months or so. Thoughts?