Many financial advisors as well as many lawyers, accountants, and other professionals are concentrating on providing their services and products to the wealthy. With the significant and continuing growth of the high-net-worth (HNW) market coupled with the wealthy willing to pay—and pay well—for value, the number of professionals concentrating on serving them is increasing rapidly.
For most professionals, the attraction of working with the wealthy is manifold. Still, without question, a very powerful appeal are the pecuniary rewards that are possible.
A lot goes into being able to deliver exceptional value to the wealthy and thereby build a very successful HNW practice. Topping the list is being an expert in your field. Also, your business model is consequential. However, these two factors—though absolutely essential—are rarely enough.
For most professionals, the biggest obstacle to building a very successful HNW practice is business development. Your ability to connect with wealthy prospects that become wealthy clients might very likely be the hardest part of your professional life.
There are a lot of resources available to help you become more proficient in HNW business development. One well-used resource is HNW business development coaching which comes in many forms with various methodologies. Herein, I am not going to address the different systems and processes that can help you to become more effective in cultivating HNW clients. Instead, I am going to describe three types of HNW business development coaching models.
Three HNW Business Development Coaching Models
In discussing HNW business development coaches, I am referring to professionals who, for a fee, share their expertise with advisors so they can build HNW practices. To be clear, not all advisors seeking to build HNW practices need the services of coaches. Many advisors are capable or prefer to build their HNW practices using other resources from various educational programs to participating in study groups to their own initiatives.
The three HNW business development coaching models we’ll discuss are:
- Educational coaching: Your coach provides you with insights into HNW families and often various types of referral sources. He or she is a teacher explaining methodologies that will enable you to more effectively connect with HNW clients.
- Situation-specific coaching: Your coach works with you on particular business development situations. You detail a set of circumstances and your coach walks you through potential ways to achieve your desired results. For example, you can discuss how to best frame investment recommendations to a committee of wealthy family members. A common circumstance is where your coach helps you match up high-impact solutions with the self-interests of a wealthy prospect or client.
- Participatory coaching: Your coach “partners” with you to enable you to better learn the systems and process that results in new HNW business. Your coach will also jointly work with you on certain situations. In these scenarios, your coach is part of your team and periodically has direct contact with HNW prospects, clients, and other professionals.
The three models are not exclusive. In many ways, they actually build upon each other with educational coaching being foundational. It is not uncommon for the three models to bleed into each other. Moreover, many HNW business development coaches provide all three models.
Comparing The Three HNW Business Development Coaching Models
The ultimate goal of all three models is to help you build a more substantial HNW practice. When it comes to business development coaching, the results are self-evident. Did the coach’s methodologies translate into more HNW business for you? It’s not about how you feel or even your mindset. The value of your coach is clearly visible in your revenue numbers.
Keep in mind that the best coaches in many ways make themselves redundant. Unless you change your orientation and focus, over time your HNW business development coach should make himself or herself unnecessary. A major end goal of your coach is knowledge and skills transfer empowering you to be able to build an ever more significant HNW practice on your own.
Educational coaching: Your coach is acting, much of the time, as an educator sharing a HNW business development methodology. Commonly, information is unidirectional from the coach to you. As such the level of a coach’s involvement tends to be low. The cost of educational coaching is either a program or retainer fee. Compared to the other models, the cost is low but you bear the economic risk. Also, with this approach, you alone decide if you want to pay for this type of coaching.
This is the most common model for HNW business development coaching. It can be provided to large groups of professionals as well as one-to-one. While a lot is left to you when it comes to implementation, it is usually a very good way for you to become aware of a coach’s methodology for HNW business development.
Situation-specific coaching: Aside from providing education with respect to certain HNW business development methodologies, the aim is for you to be able to review particular cases and opportunities with your coach and with his or her help determine a course of action. This coaching model is what most professionals tend to think about when they think of coaching. Comparatively, your coach is moderately involved compared to the other two models.
The cost for this type of coaching is more than the previous model and often much less than the next model. You pay a program or retainer fee. And, there is rarely any transfer of economic risk. Again, you solely make the decision on whether to engage the coach or not.
In both these coaching models, you have to take what you learn from your coach and apply it so as to get the results you are looking for.
Participatory coaching: Here your coach is working shoulder-to-shoulder with you to build your HNW practice. He or she is highly involved in participating in the trenches right alongside you. In many ways, your coach is your partner, using his or her methodology possibly with prospects, clients, and potential referral sources to help you deliver greater value and become more successful.
With this coaching model, you learn and become much more capable by replicating the way your coach is getting results. These coaches are compensated by program fees or retainer fees, or—in very well-defined situations—by production, or some combination. Because of the relatively intense level of involvement, the cost is regularly higher than the other two coaching models. For instance, monthly retainers from $10,000 to $40,000 and sometimes more are pretty common. At the same time, it is possible for you to shift much of the economic risk to the coach. So, if you do not generate considerably more targeted revenue then the cost of the coaching is severely mitigated and might possibly cost you nothing. Also, if the coach truly super-charges your HNW practice and you blow past your targeted revenue, you pay more.
When it comes to this type of coaching, the coaches tend to be very selective as to whom they take on as clients. As success is clearly defined and regularly tied to the coach’s compensation, only well-suited candidates are chosen.
Conclusion
If you want to build a significantly more successful HNW practice, you might want to consider hiring a coach. Which HNW business development coaching model is best depends on you. It is based on where you are today and what you want to achieve. Also, how fast you want to reach your business goals is often a major factor. However, none of these three models work unless you make them work.
Probably the biggest obstruction to benefiting from the guidance of high-quality coaches is when professionals fail to follow through on the guidance provided. For instance, many professionals want to move upmarket but fail to systematically apply what they have been taught. And, most of the time, there is no way for the coaches to change this. So, in the end, your success is always up to you.
RUSS ALAN PRINCE is the Executive Director of Private Wealth magazine (pw-mag.com) and Chief Content Officer for High-Net-Worth Genius (hnwgenius.com). He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.