Advisors who want to attract high-net-worth clients need to get out of their comfort zone and learn to sell themselves personally in social situations, according Matt Oechsli of Oechsli Institute, a research organization that studies affluent individuals.
Although the old rule of thumb may have been that an advisor should not talk business in social settings, the new dynamics call for getting your foot in the door on a personal level and that means doing it in social situations, says Oechsli, who participated in a recent Webinar on how to market to affluent clients with up to $10 million in investable assets.
The Webinar, sponsored by Financial Network Investment Corporation, a Cetera company, addressed the post-financial crisis world for elite advisors. Cetera is a broker-dealer based in Segundo, Calif.
"The great recession cost advisors clients and has made them negative, cynical and afraid to act," Oechsli says. Only a small minority of advisors serve high-net-worth clients and that is because the advisors do not use the right techniques.
Before the financial crisis, 7 percent of advisors were bringing in 10 new clients a year who had investable assets of $1 million or more. By 2011, that percentage was down to 1.5 percent, Oechsli says. At the same time, eight out of 10 affluent people would consider changing advisors even if they describe themselves as satisfied with their current advisor, he says.
"The great recession has created an enormous opportunity for those advisors willing to take the right steps," he says. Success today depends on personalized service and constant communication.
If a client says he is referring a friend to an advisor, the advisor should not wait for a phone call, Oechsli says. "Ask if the client can personally introduce the referral instead."
Among other things, the elite advisor has to be ambitious and disciplined. Even if he or she does not feel like socializing or feels uncomfortable approaching people in a social situation, the advisor needs to do so, he says.
Oechsli advises taking a client to dinner and talking about their family or hobbies.
When a prospect asks about fees, the advisor needs to be able to handle the question gracefully and easily.
"Don't shy away from the fee question because if someone is asking about fees, that is a signal they want to buy" your services, he says.
Have small intimate gatherings with potential clients or friends of wealthy friends, not educational seminars, he adds.
"The core marketing activities today for elite advisors are strategic networking, introductions, referrals, and intimate clients events," he says. Every advisor should be ready to turn any social situation into a subtle selling event.
"If someone is talking politics, express your amazement that so many people in this environment do not have a recovery plan in case their portfolio falls," Oechsli advises. Don't try to sell but be ready to drop the subtle hint about finances and investing.
"The less you talk business, the more business you get," he advises. "Talk about families when you meet and include information or even jokes in newsletters that have nothing to do with investing."
He also advises avoiding the word "wealthy" in conversations with clients and potential clients because many multi-millionaires built themselves up from scratch and do not consider themselves wealthy.
"For those who want to be elite advisors, it is time to get social with your clients," he says.