Money might not buy happiness, but high net worth (HNW) clients want the peace of mind and professionalism from their financial advisor, an annual survey conducted by Taddingstone Consulting Group says.

The Survey of the Affluent found that almost half of HNW clients were not impressed by the service they received from their personal financial management team.

“These people don’t care if they get a birthday card,” says Greg Holohan, a Taddingstone consultant. “They want to know that their money is being taken care of and they want to know their advisor is there for them throughout all the financial and personal events in their life. The trinkets and trash are not what wins big clients.”

The survey found that the wealthy are now more willing to take on planning themselves with 43% saying they were their own primary advisor. Last year this figure was only 28%. Full-service brokers were tops for 19% of respondents and 16% relied most heavily on their accountant. Financial planners and investment counsellors rang up only 10% each.

The best way to make a wealthy client feel appreciated is to make yourself available to them. They are not paying you to shield them from investment losses and they are more likely to cite poor communication than poor performance as a reason for taking their business elsewhere.

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  • “One of the findings in the past couple of years is that advisors are afraid of bad news and they’re afraid to share bad news with their client,” says Holohan. “But the affluent clients who are most satisfied, irrespective of investment performance, are the ones that are actively monitoring their advisors.”

    When the HNW meet with their personal financial advisors, however, the meetings can take on an informal tone. An advisor might think this is a positive sign of a friendly and trusting relationship, but Holohan says they should consider themselves the personal CFO to the HNW.

    The Taddingstone survey found that very few of the affluent have inherited their money or won the lottery. They’ve become affluent through hard work and want to see the same from their advisor.

    “A lot of these [clients] are business people and [advisors] should bring the same level of professionalism to their personal financial relationship as they bring to their business relationships,” he recommends.

    A good way to ensure that your relationship remains professional is to have a clear understanding at the outset of what the client should expect. A wealthy client will be more impressed by the professional who offers them investment policy statements, agreed-upon benchmarks and a service agreement. Holohan suggests a “contact contract” to ensure they have access to you on a regular basis.

    “Set in place a system that allows you to be monitored as an advisor, don’t be afraid to be monitored,” says Holohan. “Even if you have a bad quarter, if there is a mechanism for the individual to be monitoring and agreed-upon benchmarks in the beginning, the client’s going to be more satisfied.”

    Being wealthy already, 41% of those surveyed listed capital preservation as their top financial goal with 40% saying capital accumulation was their primary goal. Income generation ranked third with 15% saying it was their main goal.

    While the HNW want access to experts in various fields, they don’t want to be marketed to. The advisor must then try to put together a team, while trying to avoid the perception that it is simply a marketing gimmick, aimed at selling them more product.

    “Unless there’s a conscious effort to build it from the ground up, the HNW see it for what it is, which is ‘you’re trying to sell me this, you’re trying to sell me that’ rather than providing them a service,” Holohan warns. “When they are set out to serve the client and not set out to sell their product, then the clients going to benefit in the end.”


    How does your service of HNW clients differ from your other clients? Are their needs really so different from the rest of your client base? Share your thoughts about this topic in the Talvest Town Hall on Advisor.ca.



    Filed by Steven Lamb, Advisor.ca, slamb@advisor.ca

    (10/07/03)