Database services provide inside line on wealthy
It may be more difficult than ever to satisfy wealthy investors, but finding them has never been easier.
It may be more difficult than ever to satisfy wealthy investors, but finding them has never been easier.
A new generation of web-based tools — originally developed for the fundraising efforts of non-profit organizations — is being used by wealth advisory firms to supplement their marketing efforts.
Among the providers: The Rich Register, which identifies the wealthy geographically; Wealth Engine, which offers individual reports or ones screened by geography and net worth; and Wealth-X, a newcomer that offers in-depth profiles of high-net-worth individuals.
Wealth managers who have used the services say that they are helpful, though all stress that the services must be integrated into an established marketing effort.
David L. Filkin, head of business development at Gresham Partners LLC, which oversees about $2.1 billion, has been using Wealth Engine for about a year, and also recently tried Wealth-X. He was impressed by the detailed information provided by Wealth-X, but for now, he has decided to stick with Wealth Engine because it is less costly.
Annual fees for Wealth Engine start at $3,500 per user. The company has several hundred financial services users, including some large banks and brokerage firms, said James Dean, vice president of sales and head of its financial and luxury practice.
Wealth-X, which started this year and employs the editorial team that produced the Forbes 400 wealth list, charges $1,000 to $3,000 a report. In coming months, the company plans to add a searchable database to allow wealth managers to screen for prospects by a variety of characteristics, said David Friedman, the company’s vice president of sales.
The Rich Report, from The Rich Register, costs $359 a year and is available through a searchable online portal or in printed form.
“GOOD SNAPSHOT’
“We have found these types of tools to be very effective. We try to run a Wealth Engine report on any prospect before we have the first meeting with them,” Mr. Filkin said.
“It gives us a good snapshot. We can get a glimpse of who the person is by where they’ve worked, the boards they sit on, and their charitable and political contributions,” Mr. Filkin said.
“The key is being able to know your prospect as well as you can,” he said. “The more we can turn the conversation from being about Gresham into being about the prospect, the better the discussion and the more likely that the prospect will become a client.”
The firm also runs Wealth Engine reports on current clients to see if they have connections to likely prospects.
“We need to be more proactive about helping clients refer us to people they know,” Mr. Filkin said.
Knowing a prospect’s interests and passions, such as fishing or the opera, can often help seal the deal, said Tom Meilinger, managing director at Vogel Consulting, LLC, who warns that advisers must be careful not to reveal too much of what they have learned and from where. The extent of information that is available publicly can “scare the heck” out of wealthy prospects, he said.
Like other advisers, Mr. Meil-inger said that the databases work best when used in connection with a more personalized approach. He recommended taking a geographic list of wealthy prospects, such as one provided by Rich Register, and then approaching referral sources such as lawyers and accountants to discover whether the prospects actually need the kinds of services an adviser offers.
“I sit down and say, “Here are the families I think might need my services. Please tell me which families absolutely don’t need what I provide,’” Mr. Meilinger said.
From there, the adviser goes through a series of “concentric circles” to find the right person to give him an introduction, which advisers agree is absolutely necessary.
Other advisers consider this approach antithetical to their way of doing business.
“These tools strike me as great at identifying people who need your services, but that puts you in the position of having to entreat someone to consider your capabilities,” said Jamie McLaughlin, former head of Geller Family Office Services. “I’d feel uncomfortable obliging someone I know to take action.”
The tools also are unable to determine whether an otherwise ideal wealthy client would be a good fit for a particular firm, or what a firm should do to cement a relationship.
“Just because I know who has wealth doesn’t mean I know what to do about it,” Mr. McLaughlin said.
E-mail Hilary Johnson at [email protected].
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