Gentle Rain Affluent Marketing Blog

Well here’s some good news for financial advisors.

One “I-guess-I-shouldn’t-be-too-surprised” outcome of the recent financial turmoil is that more and more of the affluent are seeking out new financial advice.

Whether it is an outright dismissal of their current advisor (still relatively rare) to actively seeking second opinions, there has not been a better time for advisors to actively pursue the affluent market.

However, that doesn’t mean that marketing to the affluent is necessarily getting easier. Unfortunately most financial advisors still adhere to their time honored approach of “This is me. This is what I do. You should talk with me.” While this may work with the mid-market or the entry-level investor, if one is serious about attracting more affluent clients, one needs a bit more finesse.

This point was emphasized by a recent survey in Investment News that stated, 65% of the affluent have an initially negative reaction to someone who says they are a financial advisor. A meager 5% of the affluent believe the well trod out statement that financial advisors offer, “unbiased advice”.

Why is this the case? Undoubtedly for a variety of reasons, but my own informal survey leads me to conclude that the shear similarity in messages that come from financial advisors must play a role. When everyone mouths the same platitudes it not only gets repetitive, but starts to lack credibly.

The affluent are not shy about what they are looking for. Unlike just a few years ago, what today’s affluent desires is an individual (or increasingly, a team) who can provide a holistic approach to their financial needs. Someone who can serve as the quarterback of their financial game plan.

What this means for the advisor who wants to build more affluent relationships is that he or she must elevate their game so that they are providing advice that that resonates with the level of sophistication of their audience.

For example, many financial advisors assume their prospects have little knowledge or interest in investing. And up to fairly recently, that may have been a correct assumption.

However there is nothing like an economic downturn to turn passive investors into active knowledgeable clients. As one such transformed affluent investor commented, “Given the returns I’ve gotten recently, I can’t do any worse than that guy I’ve been paying all that money to!”

Although advisors can correctly argue that their training gives them a unique perspective on the market, it’s also true that with a modicum of effort, any investor can learn a surprisingly large amount about their financial options. Moreover by simply reading the Wall Street Journal and listening to CNBC, most investors can quickly get a good understanding about the economic factors that affect their investments.

So what doe this mean to the advisor? First, it means that they need recognize that the financial sophistication of their prospects (particularly the affluent) has increased. As one very successful advisor to the affluent said to me, “It is much easier to start the conversation at a high level and then bring it down if you find you’re talking over their heads, then vice versa.”

However the larger issue is how to approach the affluent market in ways that aren’t obvious and overtly “salesy”. How to finesse ones way into long-term relationships. Those strategies are what I discuss here.