A question we commonly receive is, “Do individual variances come into play?” The answer is of course “yes.” You may find a family steward who is more sensitive to performance than the bulk of your family stewards, and this affluent client’s requirement ranking would be adjusted accordingly. However, we have found the high-net-worth personalities to be an overall reliable indicator of these requirement rankings.
Based on this assessment, the least challenging affluent clients are phobics. They are intensely relationship-oriented. They lack, by “definition,” any interest in financial matters. At the same time, they require relatively minimal attention. Of course, capable financial advisors will do the best job possible for phobics. It’s just that they are the easiest of the high-net-worth personalities to work with, and volatility in the markets, for instance, will not cause them to panic or even question your capabilities.
On the other end of the spectrum are accumulators. Their focus is intensely on investment performance. The interpersonal nature of the relationship is comparatively minor. If a financial advisor is not delivering superior returns pretty consistently, he or she is likely to be replaced fairly quickly irrespective of the quality of the interpersonal relationship. At the same time, accumulators can be highly demanding of your time, energy and resources.
Conclusions
Where and when possible, you should focus on cultivating affluent clients with high-net-worth personalities that you have a natural affinity with. Doing so will enable you to develop and deliver the optimal levels of service with the lowest level of personal and professional friction.
At the same time, it’s worthwhile to understand the requirement rankings of each of the high-net-worth personalities. This provides you with some perspective about what it is likely to take to effectively work with each of them.
Russ Alan Prince is president of R.A. Prince & Associates.
Brett Van Bortel is director of consulting services for Invesco Consulting.