The affluent don’t want a sales pitch

The financial health of many affluent families isn't good. That is why most of these families are open to a second opinion regarding their finances.

The financial health of many affluent families isn’t good. That is why most of these families are open to a second opinion regarding their finances.

So why aren’t the affluent running to advisers to get this second opinion? To put this in context, if anyone in an affluent household were diagnosed with a serious health problem, getting a second opinion would be a no-brainer.

Our research provides insight into why this phenomenon exists and what advisers can do to capitalize on the situation.

First, let’s review three facts: The affluent don’t like salespeople; nearly two-thirds of the affluent have a negative reaction when they hear that someone is a financial adviser; and just 4% trust that a stock broker provides “unbiased” financial advice.

The affluent investor/adviser relationship has forever changed. Emphasis on developing a business designed to attract, serve and de-velop loyal clients is no longer an option but a necessity.

Unfortunately, the “gap” between what the affluent want and what advisers deliver has moved in the wrong direction. Because we remain mired in the financial crisis, these gaps aren’t tolerable.

Advisers must understand the affluent, and they must be able to meet their needs.

Our research uncovered eight criteria that the affluent want in a financial advisory relationship:

• Proactive contact when a situation arises that might affect their family’s financial affairs.

• Full disclosure of all fees.

• Understanding of their family’s situation, needs, goals and financial objectives.

• Identification and coordination with outside financial experts when necessary.

• Discussion and agreement about the family’s risk tolerance.

• Creation and execution of a comprehensive financial plan.

• Regular organization and up-dating of financial documents.

• Coordination of all investments.

In essence, the affluent want a financial coordinator, a quarterback if you will, to oversee every aspect of their family’s financial affairs. Every aspect of 21st century practice management must focus on this end.

For example, having an adviser with a knowledge-based designation such as certified financial planner in your practice or as one of your outside experts is essential.

However, there is another ir-refutable truth: If you are interested in capitalizing on the opportunities out there, simply meeting these eight criteria isn’t enough. Advisers must be able to penetrate the affluent’s centers of influence.

And because the affluent don’t like salespeople, sales skills must be refined. Yet our studies indicate that just 5% of advisers have the skills to penetrate an affluent client’s centers of influence.

Not only must these skills be developed, but it is the veteran adviser who is best suited to master them. After all, unless you are just getting started, you probably live in an upscale neighborhood, travel in affluent circles, have a membership in a country club, belong to an influential civic organization and maybe serve as a board member.

Your basic positioning couldn’t be better for offering second opinions — yet, it is hard to teach old dogs (veterans) new tricks.

But smart veterans make the needed adjustments.

The advisers of today and tomorrow who will earn the most money, provide the best lifestyles for their families and enjoy the highest levels of career satisfaction are going to be an elite corps that excels in doing three things: delivering on these eight criteria with Ritz-Carlton-like service and FedEx-like efficiency with affluent clients serving as continuing source of introductions and referrals; penetrating the affluent’s centers of influence; and seamlessly selling affluent prospects on establishing a long-term advisory relationship.

Ambitious people everywhere study the best practices of successful people in their respective fields.

Similarly, the best advisers assess their practice management and sales skills.

My experience with advisers is that whether it is practice management or sales skills, most know what they should be doing. The real issue is making the commitment to execute on a consistent basis.

Regardless of where you stand on all this, my suggestion is to make the balance of 2009 “The Campaign for Second Opinions.”

Because experiential learning is life’s best teacher, set a target of offering between three to five second opinions a week.

Matt Oechsli is an industry speaker, researcher and writer. E-mail him at [email protected] or visit oechsli.com.