Four Ways to Attract Affluent Clients
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Last week, I wrote about a California advisor who transitioned her book to focus on affluent clients. Central to her success was the understanding that marketing to affluent investors requires a different approach. Attracting HNW clients is all about credibility – as a result, it’s typically lower key, takes longer and requires an upfront investment of time and effort to position yourself to interact with HNW prospects.
Here are four strategies that I have seen help many HNW advisors attract clients. These principles apply to prospecting more broadly – even if your target client has $500,000 rather than $5 million, you can still adapt them to your situation.
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Strategy One: Become the safe choice
Successful HNW advisors typically have fewer than 100 clients and a high minimum-asset threshold, allowing them to deliver a personalized and high-quality experience.
But many HNW advisors go beyond assets in the clients they target. Similar to the advisor I profiled last week, who became the go-to advisor in her community for women going through million-dollar plus divorces, these advisors focus on a defined client profile. Every advisor has read articles describing the advantages of narrowing your focus:
- As a specialist, you’re able to develop expertise that lets you serve these clients in a way that generalist advisors can’t match;
- You’re able to establish credibility and narrow-cast your marketing to reach prospects more efficiently; and
- As you add more clients from within a community, your visibility grows, word-of-mouth kicks in and you become the safe choice for these clients
My conversations with advisors who’ve built HNW practices suggest that the decision to focus is the single most important ingredient in their success. And this isn’t just true of advisors – Michael Porter of the Harvard Business School, considered today’s leading thinker on strategy, says that successful businesses aim to be different from competitors, rather than trying to be better. In other words, they focus on being specialists rather than generalists.
So why then do most businesses still operate as generalists? Porter believes that these businesses make the mistake of concentrating on what they’re giving up rather than what they’re gaining from a specialist focus. One starting point is to identify two or three clients in your book who fit a profile upon which you’d like to focus. That’s how one advisor started with a single client who owned an auto dealership and turned it into a niche that now consists of 15 multi-million dollar clients representing over half of his practice.
You can read more about Porter’s views here. And for more about transitioning to a specialist focus, you can read about why specialists earn twice as much as generalists and becoming the safe choice for target clients.