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5 Reasons Affluent Clients Choose Their Advisors

Financial Advisors have a tough job when targeting and attracting new clients. By the nature of their relationships, advisors must keep an open and honest rapport that is not tainted with the scent of ‘sales’ tactics. How then, do advisors sell their services to new clients yet avoid traditional sales strategies? The first step is to understand what drives affluent individuals to seek the services of a financial advisor.

Whitefrog discussed with a roomful of our clients the reasons why affluent individuals choose to work with an advisor and what qualities they are looking for in an advisor at a recent round-table dinner discussion. Here is a list of the five most common reasons an affluent client seeks to work with an advisor:

1. It got complicated – The main reason an individual would transition from managing their own finances to working with an advisor is because of the complexity that success brings.  There is usually a catalyst behind this reason, a financial mistake or oversight, that has made it clear to the individual that they are in over their head and need the advice of an expert.  In this situation, advisors should communicate a clear strategy for handling the individual’s situation.
2. Too much time – The second most common reason is that affluent clients spend too much time managing their finances and need professionals that can be trusted with the management of their assets. Key items to discuss with these individuals are the systems you have in place for the management of their assets and a meeting / reporting system that is both streamlined and structured.
3. Better communication – One of the key reasons affluent clients move from one advisor to another is due to poor communication. While many advisors may interpret this as too little communication or lengthy delays in responding to requests (which are bad), it can also mean the opposite:  inundating the individual with information that is unnecessary.  This information overload creates a time and capacity strain on the client. Be sure that you respond to your clients in a timely manner and have the ability to answer their questions succinctly and simply.
4. Minimize tax liability – Death and taxes. While an advisor can’t make taxes disappear, you can appropriately prepare individuals for the challenges they face in the upcoming years. Individuals who are increasing their wealth will continue to face more difficulties (especially in the coming years), so it may be a good strategy to have an in-house or a partnership with a tax specialist that can advise clients on this sensitive issue.
5. Establish a legacy – Whether in their own family or in their community, affluent individuals are concerned with using their wealth for purposes beyond their own needs to help benefit others. Having a track record of working with other individuals to establish a legacy is important, but it is also beneficial to have talking points for legacy building before hand. Having a discussion on building legacy is often a good starting point and gets the individual to share their vision. Find others to help execute that vision.

Deliver your service to clients and continue to meet their expectations.  Build your brand and cultivate relationships. Once you are at that stage with a client, trust them enough to help build your firm and share with them how they can help you grow.  Clients are not going to provide referrals unless they know you have a need.