A key for a financial advisor to gain ultra-high-net-worth clients is to know the client before you meet him, says David Friedman, president and co-founder of Wealth-X.
A key is knowing as much about the person as possible and using it, says Friedman. "It's about doing your homework and creating unique experiences based on people's passion and hobbies," he says. "Showing you took the time to understand them implicitly builds trust from the start."
Wealth-X provides intelligence on UHNW individuals and families with $30 million or more in net worth. ByAllAccounts, a data aggregation firm, which compiles client account data within an advisor's wealth management platform or trust accounting system, recently used Friedman as the source of a whitepaper.
The whitepaper, How Wealth Managers are Winning Business with the Ultra-Wealthy by James Carney, president and CEO of ByAllAccounts, examines ways to target the UHNW client.
Friedman feels the market volatility is prompting the ultra wealthy to retrench to the areas where they made their money in the first place. It is also resulting in them dividing their assets between riskier capital, where they are investing in risky private and entrepreneurial pursuits, and risk-managed capital, where they are looking for multi-asset, global portfolios with sophisticated risk management techniques applied.
The wealth manager who is basing his practice entirely on how well he can prepare reports or invest money is setting himself up for failure, the whitepaper says. Instead, "you have to have enough information about them as you can find to anticipate their needs without them even telling you," Friedman says.
"Time is scarce with UHNW individuals," he says. "You need to know the narrative of their lives. Creating trust based on personalized information can be a real differentiator in this part of the market."
New business will often be gained through referrals. In order to obtain referrals, the advisor should have particular targets in mind and make it as easy for the client to make the referral or introduction as possible.
For clients already in the fold, the wealth manager may need to know family dynamics and have the capability to handle family governance, estate, regulatory and tax issues, the report notes.
An advisor should be ready to handle each client differently. An entrepreneur may want to know how to acquire more businesses, while someone who inherited wealth may be more interested in how to pass it to the next generation.
In addition, wealth managers should determine how much of a client's assets he does not control to find opportunities to increase his "share of wallet," Friedman says. "Our clients often find their investors are worth a lot more than they realized."