The business financial advisors are engaged in requires a steady supply of people with available assets to invest. Other segments of the financial services community can effectively service smaller accounts or investors starting out, building their nest egg through cash flow. Most financial advisors are looking for people already sitting on a substantial pool of assets. How can you find them?
It is logical to assume everyone who has accumulated significant assets already works with a financial advisor, unless they have followed the self-directed, “do-it-yourself” route. Here is the good news. In the book, The Millionaire’s Advisor by Russ Alan Prince and Brett Van Borel, the authors point out wealthy people tend to work with an average of three financial advisors. You would recommend diversification when investing in the stock market. The wealthy don’t put all their eggs in one basket either. This means there is opportunity, even if the person already currently has a financial advisor.
Let us consider eight resources where you can look for wealth in your local market. Since we will be mentioning some websites or online resources, keep the following in mind.
1. Always read and respect the legal and privacy notices on the sites.
2. Only use the sites for the purpose originally intended by the site.
3. Try to find your data on specific people from more than one source.
4. Get permission from your compliance officer first before doing research or implementing prospecting strategies on the internet.
Now let us look at some logical resources in your community:
1. Recently relocated senior corporate executives. These are people used to hiring consultants or delegating tasks when they don’t have the time or relevant expertise to take on personally.
Resource: Many major metro markets have a business journal. Major newspapers have a business section. The “People on the Move” section usually lists people who are stepping into high level positions in the local area.
2. Owners of successful local businesses. It has been said the wealth in a community is often in the hands of the owners of private businesses. The list might include car dealerships, insurance brokerages and property developers, for example. But who is successful? How can you tell? A good yardstick for a successful business is one that has passed the seven- to 10-year mark in terms of longevity.
Resource: Let us assume involvement with the Chamber of Commerce is a good indicator of community involvement. The Chamber website might give recognition to “this 10-year participant” when their contact details are listed in the online member directory.
3. Private foundations. Some wealthy families have a history of philanthropy. Cultivating philanthropists makes sense because you want people with assets and philanthropists have money to give away.
Resource: Websites like Guidestar have search features for identifying private foundations in specific geographic areas.
4. People who have sold real estate. This fits into “money in motion.” If someone sold their house, the money needed to go somewhere. They might have bought a bigger house, but it might be the settlement of an estate by the heirs.
Resource: Some local newspapers carry a weekly column listing real estate transfers in the area. In our area, it listed the seller, buyer and the stated dollar amount.
5. People who have lost their spouse. This is not ghoulish if done tactfully. Many people belong to a religious congregation. You might fit into this category. The pastor or leader is often approached by parishioners for advice. There are areas where they feel knowledgeable and areas where specialized knowledge is required. Where do they send someone needing investing advice?
Resource: Meet with your religious leader. They likely know who you are already. Explain how you help people. Acknowledge they likely have a few financial advisors whose names they provide when this situation occurs. Explain you would like to be considered an additional resource.
6. Major donors to nonprofits. Not all wealthy people set up charitable foundations. Some give money away from cash flow or donate appreciated stock when a capital campaign comes around. If you look at the donors to several nonprofits in your area, you usually see the same names again and again.
Resource: Nonprofits, like the hospital and museum, issue annual reports, similar to public companies. They might have names like: “Report to the Community” or “A Record of Philanthropy.” They usually list donors by giving category. Look for donors in the highest categories.
7. Local college alumni. Ideally you graduated from a college in the local area. You have a bond that stretches across the age and wealth spectrum: You attended the same school. That gives you plenty of reasons to get in touch.
Resource: This presents a paradox. Your alumni directory should allow you to see who lives locally, when they graduated and career information. The directory probably has a “not for commercial purposes” warning. The older, wealthier members might be involved with the local alumni chapter. You might meet them face to face at events. You might contact the alumni office at your school, asking if you could hold a series of local seminars on topics relevant to alumni as a school-sanctioned activity. (It’s been done before.) Now you have a reason to reach out to people, especially the ones with whom you want to connect.
8. Accountants, lawyers and other professionals. These are considered centers of influence and good referral sources. They don’t wear uniforms or badges, but they can be identified.
Resource: Searchsystem.net is a collection of 70,000+ public access databases organized in several ways, including by state. They have categories for licenses, including attorneys and certified public accountants. This can help you identify the set of professionals in your area. Your business journal might also publish a book of lists. This usually includes Top Law Firms and Top Accounting Firms.
This research lets you pursue a top-down strategy. You are finding people who are likely to be prequalified. If you can get in front of them and they express an interest, they should have the resources to become good clients. The alternative is a bottom-up strategy, when you find people willing to talk with you, then determine if they have sufficient assets to qualify as a client. The top-down strategy sounds more productive.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book Captivating the Wealthy Investor is available on Amazon.