For Wade Evans, prospecting for the high-net-worth client involves trying to hook the biggest fish, literally. Evans, a Baton Rouge, La.-based RIA drops $20,000 a year to take a few dozen of his biggest clients and most promising prospects on a week-long Cajun fishing expedition. The annual event has become increasingly popular, with referrals lining up to cast a line.
When it comes to bagging trophy clients — and who isn't trying to lure rich clients and their rich fees these days? — it pays to be imaginative. Marketing doesn't just mean, as Evans notes, the “golf cliché” or the occasional lunch. It can include lavish client appreciation dinners, adventure outings and special events (one advisor rents out a portion of the Los Angeles Zoo; another buys rodeo tickets).
Some reps host their own sumptuous affairs for prospects and good clients. David Blisk, founder of independent financial advisor Legacy Advisors in McLean, Va., has invited hundreds to his soirees. Entertainment has included gambling as well as swinging to the big band sound or two-stepping to country music.
“We try to do one major event a year, and other smaller touches annually; some social, some educational,” says Blisk. It's important not to go over the top. “But it's not like we're going to serve a high-net-worth client with Styrofoam cups. We have fine china instead,” he says. “If you have a divorcee who spends $140,000 annually on her dry cleaning bill, you can't impress her with coupons.”
Let's be frank: Social climbing can bring in business, too. But if you're not a member of the social register and/or aren't cozy with newly minted millionaires, creativity counts. “A lot of brokers think you can send a wealthy person an invitation in the mail to come to a seminar, but that doesn't work,” says Sharla Hamil, a registered rep with CEG Worldwide, a New York-based consulting firm. “You really have to be focused and create personal relationships.”
After learning that a wealthy prospect was a boat enthusiast, a Seattle broker tried, but failed, to entice his prospect with invitations to big West Coast boat shows. But because he wasn't plugged into the entrepreneur's social set, he couldn't get an introduction. So he dropped by the harbor where the local entrepreneur's 90-foot boat was docked and wrangled an invitation onboard. Noting that the prospect repeatedly yelled to the crew of his second boat across the harbor, the broker brought him a two-way radio set to simplify communications. He turned a much-needed gift into management of a chunk of the trophy's $40 million stock portfolio.
That was the start of a beautiful relationship.
“Friend raising precedes fund raising,” says C. Richard Weylman, a consultant who specializes in marketing to the affluent and author of Opening Closed Doors; Keys to Reaching Hard to Reach People. “If you're actively involved in organizations where you're rubbing shoulders with the kind of people you want to do business with, because you know them personally, you can shorten the sales cycle.”
In other words, put yourself where you will run into the right kind of prospects.
At a tony auction in Connecticut's wealthy Fairfield County, for example, an older widow confided to a broker that she wanted to create a trust to care for her cat, something her current broker, who had been her late husband's advisor, dismissed with a laugh. “This was what she wanted and no one would listen to her,” says the broker, who oversees $100 million for her clients. Within months, she had not only created the trust, but also won some of the widow's millions to manage. “And I'll get the rest of the account, which is about $20 million, eventually,” she says.
The Rich at Play
A Manhattan-based rep chose Spain's Costa del Sol for vacation last summer, not just for the weather, but also for the well-off vacationers that play there. “You go where the affluent are, do what the affluent do,” he says. While his dream of landing a European Internet titan or a Saudi sheik didn't pan out, he met many rich Americans in his nightly forays to Pangia, a branch of the hot Manhattan club. “I exchanged business cards with a lot of people, and one contact, a wealthy U.S. entrepreneur with a sizable stock portfolio, looks like it might pan out,” he says.
Be warned, however: If you do pursue the rich and famous through social endeavors, retain a professional distance. Peter Bacanovic didn't. The former Merrill Lynch broker who moved through swank Manhattan circles became close friends with Martha Stewart and former ImClone CEO Sam Waksal. Now Bacanovic could face charges in the investigation of Stewart's sales of ImClone stock ahead of a negative FDA announcement about the company's cancer drug, Erbitux.
And be patient. “Part of the problem is that brokers expect results immediately,” says Lynn Mathre, an independent financial advisor in Houston. “My largest client took almost three years of contact, though it was subtle — meeting up at charitable events or connecting through business acquaintances,” she says. Mathre joined the planned giving committee of the Houston Grand Opera, which, she says, “puts me in front of a lot of potential clients.” She is also spending more money on tickets to the opera, rodeo, sporting events and other entertainment, to court new clients and retain existing ones.
Steve Sanduski, a principal at Omaha-based Peak Productions, a consultant in financial marketing, calls it “love-affair marketing.” His advice: “Try to work with people who have the same passions and interests as you do. It all makes your clients feel so wonderful and special about you and what you do for them that they want to reciprocate over and over again by providing you with referrals just like themselves.”
Do Well By Doing Good
Nothing attracts wealthy citizens better than charities and cultural organizations. Thomas Van Dyck, a San Francisco-based managing director of philanthropic and social investment consulting at U.S. Bancorp Piper Jaffray, volunteers for causes he personally finds worthwhile. His clients — entrepreneurs, wealthy heirs and even celebrities — expect their broker to be active in their favorite social causes.
“My clients want the world to be a better place, and want to be working with someone who hopes to help solve today's problems in creative ways.” Is that prospecting? “Doing the work I'm here to do, yeah, that's a way to bring in new business,” he says.
Van Dyck, who manages a group of four brokers overseeing $500 million, is on the board of Earthrights International, which pushes for human rights, environmental causes and greater corporate and government accountability. Other brokers in his group sit on nonprofit boards serving the homeless and supporting AIDS sufferers and gay rights. Does all of this translate into more than a 60-hour workweek for the brokers? “Yes,” he says, “but it's part of who we are, what we do.”
Steve Booren, a Colorado-based rep who manages some $250 million in assets, takes a different path. “I tell our clients that instead of sending them a fruitcake over the holidays, I'll make a donation to the homeless or sponsor families for Thanksgiving or Christmas in their name,” he says. “I don't spend money on client appreciation events or marketing. I, and my clients by extension, would rather contribute than eat rubber chicken at the Marriott.”
