Friday, May 24, 2024

Essential Strategies for Winning High-Net-Worth Clients


Key Takeaways

  • The percentage of high-net-worth individuals is on the rise, leading to an increased need for financial advisors who are attuned to their needs.

  • To capitalize on this opportunity, you need to understand the HNW market, who these individuals are, and what they need from advisors.

  • Get strategies to help you not only attract HNW clients but also deepen these relationships.


Is your firm in growth mode, wanting to attract high-net-worth (HNW) clients? There are easy-to-implement strategies to attract and retain them. But first, let’s look at a snapshot of the HNW demographic and what these individuals are looking for in an advisor.

HNW Clients: A Breakdown

Assets Traits* Needs
  • HNW investors have at least $5 million in liquid financial assets (e.g., cash on hand or an asset that can be readily converted to cash)
  • Ultra-HNW investors have more than $25 million in liquid financial assets
  • 94% are college graduates
  • The average age is 65
  • 63% are retired
  • 28% work with advisors when they have a specific need, such as retirement planning
  • 16% rely on advisors for all investment needs
  • Holistic investment management expertise
  • Understanding of their long-term vision 
  • Expanded services to create more of a “one-stop” relationship

* According to a blog post from The Advisor Coach, citing research from the Spectrem Group

While all clients have different wants, needs, and goals for their money and future, the amount of wealth they hold can influence what they value most from a financial advisor. Securing this demographic can significantly propel your firm’s growth trajectory, but the challenge lies in effectively winning these HNW clients.

Free Download: 7 Ways to Position Yourself to Serve High-Net-Worth Clients [Get the Infographic]

Winning HNW Clients

So, how do you set yourself up to attract and win high-net-worth clients? Here are four key steps to start with:

Referrals, an important part of any advisor’s growth strategy, may play an even greater role in acquiring HNW clients. Leverage your network! Your existing client base and other strategic partnerships and centers of influence (COIs), such as attorneys and CPAs, are ideal contacts to reach out to.

The best way by far to gain introductions to new potential clients is to ask existing clients that you like and trust if they know anyone who could potentially benefit from working with your firm.

Adam Spiegelman, CFP®, Spiegelman Wealth Management

Once you get referrals, tell them your story, including what makes you the best choice for them.

Commonwealth advisor Gail Simons, CFP®, of The Highbridge Financial Group, starts the conversation by sharing why she chose the field and what she hopes to help her clients accomplish. Simons asks aspirational yet targeted questions and establishes herself as the “go-to person” and “an indispensable source of advice.” Advisors likely know more about their clients than almost anyone but the clients’ doctors, so it’s vital to create that kind of rapport.

If I could wave my magic wand and be everything you’re looking for in a financial advisor, what would that be?

Gail Simons, CFP®, The Highbridge Financial Group

For Spiegelman, this means responding to client inquiries or requests within a few hours. His firm takes on only six to eight new clients per year to maintain a staff-to-client ratio that’s low enough to allow them to provide such personalized service.

Be prepared to speak about the wealth management partners and experts you have access to. Simons often deals with complex estate planning needs and tax-driven investment strategies. Spiegelman often refers his clients to estate planners, CPAs, life coaches, mortgage brokers, and contractors. Other unique planning questions arise around business transitions and how to be fair and equitable to clients’ heirs.

Commonwealth advisors know they can reach out to our experts when necessary. Simons often leverages Commonwealth’s Investment Advisory Consulting team for a second opinion. The Advanced Planning and Insurance and Annuities teams are lifelines as well. Simons reassures her clients, saying, “If I don’t have the answer, I do know how to get it!”

To help scale his practice, Spiegelman uses model portfolios to manage investments. He relies on our Investment Management and Research team to provide product knowledge on private equity and nontraded REITs and our Advanced Planning consultants for solutions to concentrated single-stock positions.

Retaining HNW Clients

As with most client relationships, communication is critical to retaining HNW clients. They need to know that you are regularly monitoring their finances and are ready to act when necessary. Showing you care on a personal level by recognizing anniversaries, birthdays, and other milestones also matters. “I call clients, especially HNW clients, at least four to six times per year,” Simons stated. “I also send out communications Commonwealth provides when I find them timely and relevant.”

Spiegelman also calls clients regularly and meets face-to-face at least once per year. He sends out a weekly newsletter, invites clients to lunch or dinner, and hosts an open house from time to time. And he gets creative when recognizing special events; he once sent an OSU Beavers bottle opener to a client’s son when he graduated from college. This gesture prompted the clients to reach out, ultimately leading to a productive financial planning discussion.

Deliver Value to All Clients

Whether you reach your overall HNW growth goal or not, the strategies you use to attract HNW clients are the same as those that will appeal to all prospective investors who can bring tremendous value to your firm. In the end, being up front and direct with all your clients is the best approach, and this transparency will solidify their trust in you.

HNW Infographic - Cover Final

FREE DOWNLOAD

7 Ways to Position Yourself to Serve High-Net-Worth Clients

Don’t miss your opportunity to leverage HNW clients for growth. Learn actionable steps you can take to rise above the competition.

Editor’s note: This post was originally published in August 2019, but we’ve updated it to bring you more relevant and timely information.





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