Personality Matters

Innovators: “These are exciting times. Let’s consider the opportunities. All the volatility in the market calls for state-of-the-art thinking.”

These examples are only intended to provide some direction concerning taking the core message and applying it for each high-net-worth personality. What’s important is that you make the communications your own and truly individualize them based on your insights into each of your affluent clients.

In times of clients’ personal stress (during market volatility, for instance), you can solidify your relationships with them by making the effort to connect. At the same time, you probably have some opportunities to leverage the situation and gather more assets to manage.



The High Potential For Gathering New Assets To Manage
While it’s certainly not always the case, most affluent individuals use more than one financial advisor. Employing multiple financial advisors to invest their monies is regularly seen as a diversification strategy. At the same time, there are probably many wealthy individuals who have substantial pools of money “sitting around.” For example, many wealthy individuals have large sums in their non-interest-bearing bank accounts.

During times of market volatility, you can position your expertise in ways to do more business with your wealthy clients. Moreover, it’s important to know which high-net-worth personalities are most likely to give you more money to manage (presuming you’re not currently managing all their funds).

We statistically constructed probability scores tied to the high-net-worth personalities (Figure 2). Accumulators are the most likely to provide you with more monies to manage. There is also a very good chance that they have additional funds you are currently not investing. In stark contrast, phobics are the least likely to give you more funds, and there is a good chance you have most, if not all, of their investable assets.

Overall, based on the analysis, most of the personalities are excellent candidates for you to gather more money to manage when the markets are imitating a roller coaster. The key is to show them the benefits of letting you manage more of their wealth. You can do this by connecting with them in meaningful ways.

Conclusions
Financial advisors cannot control nor influence the gyrations in the markets. However, they can benefit from these gyrations. By using high-net-worth psychology to be effectively responsive as well as structure communications, you are able to build stronger relationships during these swings.

Many affluent investors use more than one financial advisor or have uninvested money on the sidelines with nobody. You can help them understand how to capitalize on the volatility. This entails using high-net-worth psychology and educating them on the value of skillful investing in turbulent times.

Russ Alan Prince is president of R.A. Prince & Associates Inc. and executive director of Private Wealth magazine.

Brett Van Bortel is director of consulting services for Invesco Consulting, the sales consulting group within Invesco Distributions Inc. The opinions expressed are those of Russ Alan Prince and Brett Van Bortel, and are based on current market conditions and subject to change without notice. These opinions may differ from those of other Invesco investment professionals.