The makeup of the nation's wealthy offers financial advisors broad
opportunities for focusing in on a target market, according to a new
study.
The study by Tiburon Strategic Advisors, a market research and
consulting firm, found that the wealthy client market is a diversified
"niche" that can be approached in varying ways by professionals.
Whether clients be categorized by age, occupation, asset level or source
of wealth, the market offers ripe opportunities for advisors to focus
their strategies, the study's authors say.
One of the most visible target markets, they note,
is the baby boomer generation of those born between 1946 and 1964.
"The first key step is to realize the importance of baby boomers," the
report states. "It is the baby boomers... who will look to liquefy their
retirement plans, small- and medium-size businesses and homes as they
reach retirement in the coming years."
Noting that the World War II and Generation X markets are
limited, Tiburon says baby boomers currently dominate the client
lists of many independent advisors.
Another market segment cited by the study is the occupational group,
composed of corporate executives, small- and medium-sized business
owners, and professionals such as doctors and lawyers. The report notes
that this group constitutes the base of the nation's high-net worth
households-80% of which represents first-generation wealth.
"Nearly all of the affluent U.S. households... can be
segmented into these (occupational) categories," the report's authors
state.
The key to serving this market, they say, is timing, as most of these clients operate on rigid schedules.
"For example, contacting doctors during patient hours can be nearly
impossible," they write in the report. "Being responsive to these
individuals' needs in a timely fashion and working with their schedules
tends to be the most effective way of doing business."
A client's source of wealth is also a significant area when segmenting
markets, the report states, noting that retirement plan rollovers and
other sources of new money account for about two-thirds of all fee-only
financial advisors' managed assets.
Other client segments, according to the report, can be categorized
according to geography, marital status, educational level, gender and
ethnicity.