If your objective is to work with more and wealthier clients, there are a few business development strategies you should probably employ. The most proven effective approach is creating partnerships with professional referral sources—predominantly non-competitors who are also focused on building high-net-worth practices. In the realm of financial advisors, such sources are most commonly accountants (who lack an internal investment management capability) and attorneys.
There are many ways to facilitate these relationships. Street-smart networking can convert professional referral sources into powerful partners, who then provide a steady stream of new affluent clients in need of your expertise. Critical to this process is developing an in-depth understanding of the source. By doing so you will be able to spot red flags—such as when professional referral sources think they can read clients’ minds.
What is a client mind reader?
Before we answer that question, think about whether you’ve ever heard any of the following phrases from a professional referral source:
• “If I had their money, I would put it all into T-bills.”
• “He doesn’t need to buy life insurance. He has enough money to pay the taxes.”
• “She already has an investment advisor, so she wouldn’t want to talk to you.”
• “Why would they want to invest in PE funds? I wouldn’t in their position.”
• “They have enough money and enough advisors, so they wouldn’t be interested in what you can offer.”
Client mind reading refers to situations when the referral source knows what the high-net-worth client wants to do—such as not do business with you. How do they know what their wealthy client wants? They just know.
It is important to recognize that the mind-reading referral source need not ask wealthy clients what they might want to do, as it is much easier just to know. Many times client mind reading is a function of what sources would do if they were in their wealthy clients’ financial position.
While some referral sources may be quite close and intimately knowledgeable about what a few of their wealthy clients will and will not do or what they are and are not interested in, they are the exception, not the rule. Extensive research has shown most professionals have a limited understanding of their wealthy clients—especially if they have many of them.
Mind-reading referral sources, generally speaking, tend not to provide very many referrals. In fact, they tend to provide very, very few. So what should you do when you find a mind-reading referral source with a substantial high-net-worth clientele? The answer is very simple … say, “NEXT!”
NEXT is an acronym for Never Extend eXtra Time. You will most probably be wasting your time with referral sources who are client mind readers. You are unlikely to receive a meaningful number of referrals from them, so focus on finding referral sources who take the time to ask their wealthy clients about their wants, needs and preferences.
