Competition for wealthy investor assets is greater than ever before. More diverse professionals have moved and are continuing to move into the money management business. Furthermore, robo-advisors are slowly and steadily gaining traction, and some of them are likely to eventually cultivate wealthy clients.
Complicating the scenario is the increasing commoditization of just about all financial services, especially money management. These factors are resulting in a number of industry complications, such as greater fee compression and greater difficulties in financial advisors being able to effectively differentiate themselves.
For the great majority of financial advisors, one powerful solution is to become a high-net-worth thought leader. It is so very telling that almost any financial advisor can become a high-net-worth thought leader and benefit. Before addressing how to achieve this goal, let’s look at the advantages of becoming a high-net-worth thought leader.
The Benefits of Becoming a High-Net-Worth Thought Leader
By becoming a high-net-worth thought leader, a financial advisor is creating a professional brand that translates into:
• Substantially more opportunities to do business with the wealthy. From multiplying over-the-transom opportunities, to facilitating client referrals, to using thought leadership content as currency with centers of influence, high-net-worth thought leaders connect with disproportionately more wealthy investors and are excellently positioned to close business.
• Meaningfully greater affluent client retention. From a wealthy client’s perspective, working with a high-net-worth thought leader is like a warm down blanket on a bitterly cold night—it is an extra layer of protection. The wealthy greatly want to work with leading experts, which is just what high-net-worth thought leaders are.
• The ability to considerably speed up the sales process. High-net-worth thought leaders, when engaging with prospects, are to some degree pre-sold. Their stature makes the transition from prospect to client both more likely and relatively quicker.
Another very meaningful advantage for financial advisors to become high-net-worth thought leaders is that it ensures they are knowledgeable about the issues, concerns and the panoply of (usually more sophisticated) solutions for wealthy investors.
What Are High-Net-Worth Thought Leaders?
To begin, a thought leader is:
• A financial advisor whom prospects, clients, centers of influence and even competitors recognize as a leading authority in selected areas resulting in him or her being the go-to expert.
• A financial advisor who significantly profits from being recognized as the expert.
A high-net-worth thought leader is a particular type of thought leader. A high-net-worth thought leader adds one additional criteria to this definition. He or she is …
• A financial advisor who understands the needs, wants and possibilities when it comes to the wealthy and is able to deliver appropriate guidance and solutions.
A high-net-worth thought leader is able to provide wealthy investors with information and insights that can enable them to live better financial as well as fuller lives. This includes being able to direct them to professionals who can help them address a variety of matters that impact their lives. At the same time, the high-net-worth thought leader is recognized as the expert concerning investment management and related services.
The foundation of high-net-worth thought leadership is high-value content, which is information and insights you provide the wealthy that help make them wealthier or more successful or live a better life.
How Financial Advisors Become High-Net-Worth Thought Leaders
As curators of high-value content, financial advisors are pulling together concepts, ideas and solutions that the wealthy will often find very useful. They are taking cutting-edge information and effectively distributing it to prospects, clients and centers of influence.
A number of high-value curated content topic headings prove very useful for those financial advisors working to become high-net-worth thought leaders, including:
• Elite wealth management: State-of-the-art solutions that deliver incredible value to the wealthy.
• Family office insights: What the super-rich are doing and how the less affluent can attain the same results.
• Enhanced lifestyle opportunities: The services from concierge medicine to family security that the very wealthy are using to improve their lives.
Financial advisors who are high-net-worth thought leaders are the experts where expertise means being able to find and deliver the right answer for wealthy investors and their families. This does not mean that a high-net-worth thought leader is a polymath. A very, very small number of financial advisors and their teams are going to be adept with all the topics, all the categories of information and all the potential solutions impacting the wealthy.
Clearly, then, the way for the great majority of financial advisors to become high-net-worth thought leaders is to become curators of powerful and useful information and insights. This includes knowing the technical resources that can deliver services and products not provided by the financial advisor.
One of the essential dynamics of becoming a high-net-worth thought leader and maintaining that stature is being able to provide curated high-value content on a regular and consistent basis. Without question, consistency is critical for a financial advisor to become that go-to expert.
There are various ways financial advisors can ensure they have the high-value content they need to become high-net-worth thought leaders, including curating the content in-house or subscribing to services or professional development resources that are providing a constant stream of information and insights in demand by the wealthy.
Aside from curating high-value content, financial advisors must be able to deliver the material to wealthy investors in order to become thought leaders. There are a number of ways to deliver curated, high-value content such as productizing it, using social media and presenting at events.
Productizing is where the curated high-value content is made tangible. This can easily take the form of bylined articles and reports. E-mailing has been shown to be very useful in delivering this material. Providing curated high-value content through social media is another possibility with the added complication of targeting the wealthy. For many financial advisors, the ability to use the curated high-value content in presentations, such as conferences and breakfast meetings, has proved to be an excellent way of delivering the information and insights.
It is important to realize that without concerted follow-up efforts, monetization is rarely going to occur. Leveraging high-net-worth thought leadership is essential to creating opportunities to close business.
Examples of High-Value Content
There are a multitude of possibilities when it comes to high-value content. Examples include private placement life insurance, captive insurance companies and concierge medicine. Let’s consider each of them.
Private placement life insurance: Being able to legally pay less in taxes is a high priority among most of the wealthy. Private placement life insurance was once effectively restricted to the super-rich, but that is no longer the case. Aside from being advantageous to many wealthy investors, being adept at providing private placement life insurance can very likely result in bringing in enormous amounts of money for a financial advisor to manage.
Providing high-value content concerning private placement life insurance can help enable financial advisors to become high-net-worth thought leaders. As most professionals do not understand private placement life insurance, those financial advisors who are adroitly sharing an understanding of these types of policies are readily positioned as experts and consequently can gain an unfair competitive advantage.
Captive insurance companies: Being able to better manage business risks is often possible with captive insurance companies. For financial advisors there is the strong potential to manage more assets. As with private placement life insurance, relatively few professionals are knowledgeable about them. By communicating high-value content concerning captive insurance companies, financial advisors can move toward being high-net-worth thought leaders and reap the rewards.
Concierge medicine: With significant problems plaguing the health-care system, the wealthy are looking for better answers. Hence, the ability to—in broad strokes—explain concierge medicine can strongly position financial advisors as high-net-worth thought leaders. This has been shown to lead to new client opportunities. Moreover, concierge medicine and wealth management intersect in areas such as addressing the costs of living a longer, healthy life.
Most financial advisors are never going to be technical specialists when it comes to private placement life insurance, captive insurance companies, concierge medicine or the multitude of other high-value content topics that will result in them becoming high-net-worth thought leaders. Provided they can access the technical support or direct the wealthy to the technical specialists, they will reinforce their position as the experts and their financial advisory practices will likely thrive.
Cultivating Centers of Influence
As noted, financial advisors striving to become high-net-worth thought leaders would be wise to provide the curated high-value content to centers of influence. A solid percentage of professionals, such as private client lawyers and accountants, are under considerable business and economic pressure. They too are looking for ways to better serve their wealthy clients and build profitable practices.
One of the biggest problems financial advisors have in cultivating centers of influence is that these other professionals are themselves looking for more business. This often translates into wanting to “trade” client referrals, which is almost universally a mathematical impossibility. Instead, high-net-worth thought leaders can use curated high-value content as a form of “currency.” The information and insights provided by high-net-worth thought leaders can help centers of influence become more successful, including sourcing new and wealthier clients.
Another advantage of delivering curated high-value content to centers of influence is that it can dramatically mitigate the risk these professionals have in referring clients to particular financial advisors. At the same time, the curated high-value content can act to strongly pre-sell wealthy investors before being introduced to financial advisors.
For example, relatively few private client lawyers or accountants are proficient when it comes to private placement life insurance. By helping these professionals come up the learning curve, a high-net-worth thought leader is substantially increasing the probability that when it makes sense for one of their wealthy clients, that financial advisor will be the expert brought into the case.
Often Fame, Then Fortune
There is an empirically and field-proven methodology for financial advisors to become high-net-worth thought leaders. Applying this systematic process produces a very interesting result: Financial advisors become high-net-worth thought leaders first, and consequently their advisor practices become significantly more successful.
The professional brands of high-net-worth thought leaders tend to precede their economic accomplishments. As high-net-worth thought leaders attract more and wealthier clients, what happens is an ever-expanding feedback loop where fame leads to fortune, which leads to more fame and then more fortune and on and on.
As a practical matter, becoming a high-net-worth thought leader is a commanding and formidable professional improvement and business development strategy for financial advisors at all levels of success. It has a multiplier effect if a financial advisor’s current earnings are $100,000 annually or $1 million annually. Remember: Almost any financial advisor can become a high-net-worth thought leader and benefit.
Russ Alan Prince is president of R.A. Prince & Associates.
Brett Van Bortel is director of consulting services for Invesco Consulting.