Everyone has moved upmarket. We all want HNW individuals as clients. Most people are reluctant to turn over substantial amounts until they get to know you better. Regardless of their wealth, you will still get asked: “What’s your minimum?”
Before we answer the question, lets look at our often used expression, high-net-worth or HNW. It always sounds like “more money than you’ve got.” The word “wealthy” is even worse! Many people with money don’t consider themselves wealthy. They might have $5MM liquid, but when you say your client base is comprised of HNW individuals, they assume you need $10MM or more to get into that club. A former CEO gave me an alternative: Substitute “successful” for HNW or wealthy. It’s more inclusive. Most people consider themselves successful.
How do you answer “what’s your minimum?” You might answer with the number your firm has established for an account to be opened and the advisor paid in the traditional manner. That’s not the best strategy. It’s a threshold. You are in or you are out. No one wants to be told they are too small.
Consider these three approaches:
1. Using a number, but tactfully. “We find we can be of the most value to people with investment assets of (number) for the following reasons…” You might mention your smaller than average number of accounts and your higher level of service.
Rationale: They asked for a number. You gave them one. You didn’t “say” you don’t take accounts below that level. This gives you some room to maneuver.
2. The big picture. When someone asks about “minimums” they are likely thinking of what’s the least I can hand over to become a client. Change the rules! “We find we can be of the most value to people with a combined net worth of $5,000,000 or more for the following reasons…”
Rationale: The expression “combined net worth” has magical qualities. Now they are adding in their 401(k) at work, the equity in their home, paid up life insurance policies and college savings accounts to name a few items. That number grows. They think “I’m doing pretty well!” You have done something great. You have subtly introduced non-traditional products like mortgage lending and insurance into their subconscious.
3. Use a range. Study your book of clients. How many? What the asset total? What’s the biggest, smallest and the average? It might sound like this: “I work with about 100 individuals and families. Their total assets are about $100 MM. The largest is $10MM, the smallest is $250,000 and the average is about $1MM.
Rationale: You gave a range. People can see where they fit. The person with $300,000 realizes they “qualify” yet would be below average. They might plan to raise their asset level over time because no one wants to be below average. The woman with $2MM knows she is twice your average, but she won’t be your biggest. The guy with $ 25MM knows he will be your largest account, but knows you already have a client with $10MM, so he won’t be your first big account. It’s inclusive.
There are many ways to answer “what’s your minimum?” Your answer doesn’t need to be just a number.
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.