The wealthy are individuals and families with a net worth of $10 million or more. To help them deal with their affluence, they will probably rely on advisors such as accountants, lawyers, and wealth managers. What are the implications for the wealthy already having a cadre of professionals they engage with when you want to grow your advisory practice?
Many advisors believe that when wealthy individuals and families have advisors they are comfortable with, the odds of them becoming clients are very low. For the majority of advisors, this is conclusion is correct. However, it is only correct because these advisors do not understand how to turn this pervasive situation into a competitive advantage.
To benefit from the wealthy working with advisors like yourself, you have to sincerely believe that a significantly large percentage of the wealthy are poorly served which is the reality. You also have to be able to deliver exceptional value and be able to explain or demonstrate the greater value wealthy individuals and families can potentially receive by working with you.
Let us examine each of these points.
Most of the wealthy are poorly served: According to P.J. DiNuzzo, Founder and Lead Consultant of DiNuzzo Middle-Market Family Office and author of the Wall Street Journal bestselling book, The DiNuzzo Middle-Market Family Office™ Breakthrough: Creating Strategic Tax, Risk Cash-Flow and Lifestyle Options for Successful Privately-Held Business Owners and Affluent Families, “While so many professionals sincerely aim to do a great job for their wealthy clients, the sad fact is that probably most of them lack the expertise required. For example, their knowledge of what’s possible is often limited so what they can offer the wealthy is limited. Many professionals simply do not have the depth of knowledge and experience required to deliver solutions that can make the greatest difference for the wealthy.”
Be able to deliver exceptional value: Because most of the wealthy are poorly served, if you can recognize ways to add greater value and can implement them well, you will find numerous opportunities to serve the wealthy. “We built a virtual family office that is networked with an outstanding team of specialists. We’re therefore able to address a wide array of issues and concerns many successful entrepreneurs and affluent families face,” says Vince Annable, CEO and Founder of VFO Advisory Group and co-author of Your High-Performing Virtual Family Office: Maximizing Your Financial and Personal Lives, “Because of our virtual family office, few advisors can serve the wealthy as extensively as we can. The result is that we’re often—not always, but pretty consistently—able to add a lot more value to wealthy clients.”
Be able to explain or demonstrate the greater value wealthy individuals and families can potentially receive: The complication for many advisors who understand that the wealthy are, in general, being poorly served and are also able to deliver exceptional value is communicating the greater value they can provide. Keep in mind, that the majority of wealthy individuals and families are not unhappy with the professionals they employ. While this is often a function of them not realizing they are getting subpar results, the wealthy are usually not qualified to critically evaluate their situations and are inclined to stay with whom they are currently working.
If an advisor approaches a wealthy entrepreneur, for example, and claims to be able to do a better job, the entrepreneur is likely to disregard the advisor. Advisors have to approach these opportunities by helping the wealthy who are being poorly served to understand just how they are—in one way or another—shortchanging themselves.
When we speak with the wealthy we’re focused on helping them think through the outcomes they want and need. We also extensively learn what they’re doing to achieve their goals and address their concerns. Critically, we share with them how they can optimize their professional relationships. That includes how they can get the most value from working with advisors including ourselves. What we’re doing is pulling back the curtain on the private wealthy industry so our clients can be better consumers and consequently get superior results.
By sharing how the wealthy can maximize their relationships with professionals, they often find that their current set of professionals is NOT enabling them to get superior results. This then regularly leads to these wealthy individuals and families reconsidering whom to work with. Very often the wealthy will bring in another advisor and, over time, fire some of the professionals they were previously relying on.
“We’ve found that it’s actually quite easy to win business from the wealthy, and more so the ultra-wealthy because we know so many of them are being poorly served and we can deliver greater value to them,” says Annable. “Moreover, by being completely transparent in every way and educating the wealthy on how to better evaluate any professional they’re using or considering, as so many professionals are far from very good, the fact that the wealthy are already working with advisors is proving to be one of our competitive advantages. They consistently transition from their current advisors to our multi-family office.”
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.
