Attracting Wealthy Clients
Who are they and what do they want?
You may have heard the phrase “the rich get richer and the poor get poorer.” It is certainly true that the vast majority of wealth in the United States is concentrated in the hands of relatively few people. But did you know that most wealthy people are business owners?
Money makes money
Money buys professional expertise. It also buys comfort and ease. What I want for you is to attract clients who will earn you the fees you deserve so that you can have more comfort and ease.
The affluent is a great target market for Financial Advisor services (see my ecourse for advisors). Other services that benefit are luxury travel, luxury gifts, real estate brokers and agents, and home designers and architects.
Reach for more!
I have always believed in targeting the higher end of the market. It is much easier to compete where there are fewer competitors than where the market is crowded with Walmarts, Sears, and the JC Penny’s of the world.
During an economic slowdown the competition at the bottom of the market becomes fierce. Consumer confidence forces a decline in spending that has everyone competing for financial scraps. At the upper end of the market, a decline in consumer confidence is less evident. The wealthy spend far less covering their overhead as a percentage of their income than the lower rungs of the market. Let’s face it – the wealthy have far more discretionary income.
Revamp your business!
I believe you can transform your business by targeting wealthy and affluent clients. The demographics of society are changing as we head towards a convergence of baby boomers retiring, more and more affluent Americans inheriting their parents’ nest eggs, and dual income couples without children coming of age in occupations where they have plenty of cash to spend.
This two-part article examines who are the wealthy, how much do they earn, what are their concerns, what do they want, and the top four industry areas that benefit from targeting the wealthy. Read part 2: 7 Ways to Market to the Wealthy - so that you can change your thinking to attract them.
Who are the wealthy?
It’s useful to illustrate the difference between affluent clients and wealthy or high net worth clients. If you’ve ever read The Millionaire Next Door, you know that many truly wealthy people do NOT overly flaunt their success. They remain married to their first spouse, live in older, well-established neighborhoods, and rarely buy a brand new car. They didn’t become wealthy by accident. This group has significant assets to invest and is a no-brainer for financial advisors to target.
This type of client makes purchases based on whether it’s a good value.
Affluent clients on the other hand DO flaunt their success. They live in high priced houses in upscale neighborhoods, drive luxury cars, and dine at the best restaurants. They may have little if any real savings. While they may be high income earners, they tend to spend as much or more than they make. This doesn’t mean that the affluent are not a good target market. They are indeed beneficial to target as they are spenders. This group could certainly use the services of a competent financial advisor to help them create lasting assets for the future.
This type of client makes purchases based on whether it will make them look good.
How much do the wealthy earn?
For simplicity sake, the wealthy can be defined as follows.
Working masses earning from $75,000 to $150,000 per year
Comfortably wealthy earning from $151,000 to $250,000
Serenely wealthy earning from $250,000 to $400,000
Ultra wealthy earning over $401,000
How many wealthy and affluent clients are there?
In terms of numbers, there are 17 million households in the United States with a net worth of one million dollars or more.
The year 1957 had the largest number of births: 4.3 million babies were born. This group turned 50 in 2007 and has significant income to spend. They are also poised to inherit a great deal of money over the next twenty to thirty years.
What are the main concerns of the wealthy?
- They lack time. They are looking for products and services that cater to their lack of time. They are pulled every which way and lack significant time to spend shopping around.
- They are concerned about maintaining their prestige and status. They want approval and recognition from their peers.
- They don’t want to commit any societal faux pas. Wearing the right clothing and looking like they belong are important.
- They don’t want to lose their wealth. They are concerned about maintaining their assets.
What do they want?
- Their lives are complicated. Help make their lives easier. Offer service options that create a sense of simplicity. Offer packages that take the load off them.
- The average wealthy business owner works 50-60 plus hours a week. Help them to save them time. Do things for them that they don’t have time to do.
- Offer good value and integrity in your business. Wealthy people want to know that you have good business values and will be around for some time.
- They want quality products. Don’t try to target the wealthy with run of the mill products or services.
In the next article 7 Ways to Market to the Wealthy we’ll look at the top four industry areas that benefit from targeting the wealthy, seven ways to market to the wealthy, and how you can change your thinking to attract the wealthy.
Some questions I’d like you to think about:
- Do you consider yourself an expert at what you do? How can improve your expertise?
- Are you charging enough to be taken seriously?
- Are you willing to invest in yourself and your business in order to attract the wealthy?
- Are you willing to do the work necessary to increase revenue in your business?
Other resources for Financial Advisors:
"Suzanne’s advice was invaluable when it came time for me to brand my independent financial advisory firm. Our work prior on target market, combined with help selecting my company name and colors and building my website have helped me attract my ideal clients and a consistent flow of leads from my website."
Financial Planner & Leader
"Don’t think twice about hiring Suzanne. Give coaching the time it deserves, be open, and trust that Suzanne will keep you on the right track."
AIF, CRPC, Financial Advisor, New Jersey
"I highly recommend Suzanne's services to anyone who is interested in growing their business and maintaining a healthy balance outside of work as well."
"Working with Suzanne has helped me to develop a distinctive brand. Having a cohesive brand gives me the confidence to network with and approach high level prospects. If I had not hired Suzanne, I would not have made this progress.
CFP® New York
"I truly feel that without Suzanne's guidance, my business would not have flourished. Her expertise in my field helped me produce the results I needed more quickly. But most importantly, she made me safe enough to recognize the weaknesses in my business (and myself). You can fix anything once you recognize the problem!!"