Ultra-high-net-worth investors offer great promise to ambitious advisors: challenging work, increased revenue, and the promise of a deep pool of referrals. However, they’re also finicky, expensive, and difficult clients to serve well and keep happy. There are also no shortcuts to building a successful practice with these clients. Successfully attracting UHNW investors takes commitment, time, patience, and discretion.
Here are 4 things you can do to attract UHNW investors.
1. Understand your Target Market
Not all UHNW clients are the same and it’s wise to target a specific subset within this class of investor. Are you interested in working with wealthy tech entrepreneurs? Families with inherited wealth? Owners of a closely held business? Each of these investors has very different needs and priorities and you’ll need a different approach for each one.
No advisory firm can serve every kind of client profitably or successfully. Each requires a different suite of services, expertise, level of staff contact, and personality. Some clients want advisors who can handle every question and problem; others expect a more hands-off relationship. Knowing what kind of client suits your personality, abilities, and long-term vision will result in happier clients, happier staff, and a better long-term outcome for your practice.
2. Open Your Mind
When you’re serving HNW and UHNW clients, you’re not selling products or services. You’re selling solutions to their problems and addressing their explicit and implicit needs. To uncover these investors’ needs and differentiate yourself from the product and performance peddlers, engage your mind and really listen. Remove yourself and what you can offer from the conversation and ask as many open-ended questions as you can. UHNW clients don’t just need wealth management advice; they need estate and tax planning, philanthropic planning, and help with family governance issues. Even if you don’t have deep knowledge about a particular subject, you’ll be able to speak with prospects across the breadth of their needs and you’ll be able to recognize issues and opportunities.
3. Create Intelligence Briefs About Each Client
Advisors who succeed in this space spend a lot of time doing their homework on each prospect and client. They want to know as much as they can about the client’s personality, idiosyncrasies, and past history so that they have a base of knowledge to work from when meeting. UHNW clients don’t have a lot of spare time and the more you know about them before they walk in the door, the better your meeting will go. You’ll also have greater opportunities to personalize the experience by connecting with the client’s passions and interests. Knowing a lot about each client will also give you greater confidence in each meeting.
4. Manage the Referral Process
Every happy UHNW client you have is a diamond mine of future business. Most advisors get their business through referrals from accountants, attorneys, and their current clients. However, many advisors don’t handle referrals properly.
To be successful, you have to manage as much of the referral process as you can, start to finish. Do your homework on a client to know who among their friends, family, and colleagues would be a good fit for your practice. Develop a plan for how you would like to meet that person and how your client can make the introduction.
You need to phrase your requests as explicitly as possible in order to get the best results. The problem with generic phrasing like, “if you know of anyone who could use my services…” is that it puts too much responsibility on the client to identify what you do, who else might benefit, and how to broker the relationship.
Instead, be specific when you ask clients for referrals: tell them explicitly what you are looking for in new clients and what value you can provide. This takes much of the work away from your client and allows them to focus on simply making the connection. If you can find an easy way to meet (like at a charity ball or golf tournament,) it’ll make the process much more natural.
Remember, the UHNW market is not an easy one to break into. Most advisors who’ve had success in this space took it slowly, working with one client at a time until they could start transitioning away from lower-end accounts. They were also willing to transform their practice away from simple planning and embraced the complex needs (and constant work) that their clients required.