The Best Way To Connect With New, Wealthy Clients

There are a number of things you have to get right in order to build a very successful, significant high-net-worth advisory practice, starting with having the requisite technical expertise. You must also have a profitable business model. Still, one of the biggest obstacles—if not THE biggest obstacle—to building a very successful significant high-net-worth advisory practice is your ability to bring on new wealthy clients. 

There are a wide variety of ways you can connect with the wealth. And there are anecdotes showing just about anything can work. This article shows what research proves works best.

What Works Best Today
There are three approaches to business development that research shows are consistently productive, including client referrals, client events and referrals from centers of influence (COIs). Additional approaches, such as social media, do indeed produce results but they prove to be much less successful. The viability of these other approaches might very well change in the future as the demographic composition of the wealthy changes. Nonetheless, at present, the three noted approaches are your best ways to connect with the wealthy.

The dynamics of the three approaches, as well as what is required to make them successful, are different. In understanding these differences, you are able to make smarter decisions on how to spend your time and resources.

Comparison of Approaches to Connecting with Wealthy Clients

COI Referrals: According to Brett Van Bortel, director of consulting services with Invesco Global Consulting, “There is no question that the most effective approach to connecting with new, wealthy clients is referrals from COIs,” he said. “However, many financial advisors, as well as other types of professionals, have had difficulty cracking this code. They dabble, hit obstacles and set it aside due to some exigency. But they are missing out on the best way to grow their high-net-worth practices.”

It is going to usually take some time before new COIs will likely be making extensive referrals to you. They will have to get comfortable with you and strongly believe in your integrity and technical competence. However, there are ways to vastly accelerate this process. For example, when learning about the COI’s business model and self-interests, you can engage in funneling, which is a process where you can identify possibly clients for your expertise in the very first meeting.

“The essential key to being successful building a pipeline of new wealthy clients based on COI referrals is your ability to add value to these relationships. This is not about trading wealthy clients. There are systematic processes you can employ to understand what is important, and what is not, as well as the way the COI’s practice functions,” says Van Bortel. You can use these insights to identify ways to add meaningful value. Due to the Law of Reciprocity, by adding value to your COI relationships, you will likely be rewarded with wealthy clients who can benefit from your expertise.

Client Referrals: Without question, the way most financial advisors as well as other professionals get new wealthy clients is from referrals from satisfied clients. Generally, all manner of professionals tend to wait and “magically” a client makes an introduction. The “magic” is where your client, for instance, is asked by someone for a referral to a financial advisor. He or she thinks of you and makes the effort to refer. While there are powerful ways to increase the probability of client referrals, few professionals are taking steps in that direction. Thus, our discussion revolves around this “magical” approach.

As your client is being reactive to someone asking for direction, there is no screening and therefore it is often unlikely that that individual matches your “preferred client.” At the same time, the potential for new wealthy clients is limited and thus there is little chance of creating a steady flow of new wealthy clients. Because the approach is client reactive, you do not know when you will get referrals. They just appear when they appear.