Aiming High

Bill Good

Feb 01 2010

Prospecting the High Net Worth Market:
Where to Start

By

 

Bill Good

The Holy Grail among many firms coaches, seers, and gurus, not to mention FAs, is the "High Net Worth" investor. 

 

With a wealthier clientele, other things being equal (the universal disclaimer we all learned in Econ 101), you will make more money and experience less stress if you have $100 million AUM with 100 families, versus that same $100 million with 500 families.

 

With the larger clientele, you need a bigger team. That requires more space, more postage, more meetings, less golf.

 

For this reason, as you ratchet yourself up the net worth scale, the competition scales up as well, probably geometrically.

 

To give you an idea of why the competition is so intense, I asked Marcia Glasser, President of CIS Marketing, the premier list brokerage firm in the U.S., to compile a count of identifiable households with an estimated $1 million–$5 million net worth. 

 

Assuming there are 200,000 RIAs and FAs competing for these clients, that’s 22 HNW clients per FA to go around.

 

From the wealthy individual’s point of view, they are beset with all kinds of people that want to be paid from this wealth.  You have FAs, attorneys, CPAs, estate planners, and insurance agents all trying to get their proverbial snout under the HNW tent.

 

With all this said to discourage you from pursuing this market, let me also say this: it is possible to crack this marketplace.  People are doing it daily.  Why not you?


 

Where to Start?

 

I’m going to take a paragraph from my book, “Hot Prospects.”  According to me:

 

“Your lists are to you what a claim is to a gold prospector. It’s your spot by the river where you will either strike gold or not, succeed or not. Yet most salespeople don’t spend even one percent of their time developing their lists. Too bad. To put a number to it, your list is at least 40 percent of your success in direct-response marketing.”

 

I fully realize that 99 readers out of a 100 will not do what I am going to recommend.  I’m writing this for the one who will.

 

The place to start in your mission to crack into the high-net-worth market is building a list like no other you have ever built.

 

(I have posted some excerpts from Chapter 12 of my book, “Improve Your Core Lists.”  This includes information on building better business lists, use of public record information, and library resources.  It’s available at no charge at www.billgood.com/prospectinglists.)

 

If we can answer the question, “Where is the money?” we know where to build our lists.

 

  • It’s (still) in real estate, which is real wealth.  I would definitely go there.

 

  • It’s in privately-held businesses.

 

  • It’s the C-level executives at public companies.

 

·        It’s in professional practices, which are also gate keepers.

 

·        It’s in 401(k) and other retirement accounts owned by people who made six-figure income, and made maximum contributions.  (Only about 2% of households make more than $250,000/year.)

 

Now, you can order a list of “high-net-worth” investors from CIS (www.cismarketing.com).  But that’s just the starting point.

 

If you want to get into the high-net-worth sector of the market, you now need to begin researching the names you buy AND developing your own names.  Each name on your HNW list needs to be hand-selected.  Buying a list gives you some publicly identifiable names to start with.

 

The List Development Process

 

The first stop on my list development itinerary would be a phone call to CIS to have a conversation with Marcia.  I’ve known her for years.  She knows more about the financial services market place than anyone I’ve spoken with.  She knows your market better than you.  Call her at 800-547-LIST.

 

Next stop: the County Tax Assessor’s office.  You want a basic course in how to understand the records. Property tax records are matters of public record.  They are probably online.  But I would still go down there and get some help.  Look up yourself.  Look up your neighbors.  Among other things, you want to see if the “tax billing address” is public record.  And you really want to see if you can view an alphabetical listing of property owners.  What you are looking for here is something like:

 

Aames, Adam  406 South Church Street, Ditchwater UT

Aames, Adam  511 East North Street, Ditchwater UT

Aames, Adam, 656 South East Street, Ditchwater UT.

 

Our friend Adam Aames owns multiple pieces of property.  He might be real estate poor, but you can get an idea by identifying his personal residence, Googling him and following some of the other steps below to see if he is someone you want to add to your list.

 

My second stop is Google® Maps (maps.google.com).  If you live in a major metro area, you can see a photo of Adam’s house.  I want to see what kind of house Adam lives in, and what kind of properties he owns.  Maybe I don’t like the properties he owns.  Toss him.  You are developing a list of people you WANT to do business with.  Using a screen capture tool like SnagIt, you can cut out the picture of Adam’s house, print it or save it electronically so you can refer back to it when you ultimately get an appointment with Adam.

 

Now I’m going to research Adam.  Naturally, I will Google, “Adam Aames Ditchwater UT.” I might also check “Adam Aames Facebook” and “Adam Aames Twitter.”  If Adam is there, this will find him.

 

Then I would probably check PIPL.com.  This searches the so-called “deep web,” documents in online databases not generally accessible to the search engine crawlers.  If Adam ever posted a public wish list on Amazon®, it might show up here.  If he was ever involved in a lawsuit, or has a Linked-in® Profile, you will find him here.

 

Why do all this?  Because somewhere in this morass of data is a way to contact Adam.

 

Let’s say you learn that Adam is CEO of Aames and Company, Importers.  You have seen their trucks around town.  They are new and always clean.  You really want him as a client.

 

On his website, you read, “Adam co-founded the company with Harvey Wallbanger in 1985.  In 2003, Mr. Wallbanger sold his interest to Adam to pursue his love of golf.”

 

“Harvey Wallbanger??? I know his son.” You went to school together, and run into each other in the country club, even playing an occasional round of golf.  The question now is: Can we get Harvey Jr. to introduce us to Harvey Sr.?  Naturally, after just a little research, Harvey Sr. gets added to our list. 

 

For the most part, you need to be introduced into this market.  The information you collect will, in many cases, give you the channel to make contact.

 

What If You Can’t Get an Introduction?

 

You have two choices:

 

1)   High end seminars.  My long-time client and good friend, Mike Robertson, has built a huge business inviting wealthy individuals to his seminars.  Countless gurus have said you cannot mass-market to the High Net Worth and especially the Ultra High-net-worth market.  They are wrong.  While you are fuming that “Seminars don’t work any more,” Mike’s giving them. 

 

2)   Cold call.  “Oh, cold calling is dead, you say.”  Well, I know people who are not aware of that.  I know one FA who hired a caller to only call the wealthiest area of his city.  The people being called were the 10% or so who had not registered with the DNC list.  The job was so hard, no one else did it.  This caller, who undoubtedly had a cast iron stomach, would work an entire month to get 6 people to the finest restaurant in the city.  From a standing start, this built a million dollar business in three years.  I know of another operation working all over the country, jumping all over news events indicating money in motion.  They’re going after the ultra high-net-worth market.  One of the people involved in this told me, “Bill, keep referring people to those books that talk about how cold calling doesn’t work.”

 

Role of Mass Marketing

 

Obviously, referrals and introductions are the best way to go.  But what if all your clients are affluent, and they are referring you down the ladder not up?  Now what?

 

You use mass marketing long enough to break into selected networks.

 

In 1986, in my first book, Prospecting Your Way to Sales Success, I said, “Select a list on which word of mouth can occur.”

 

This is why list development is so vital.

 

Do your homework.  Identify wealthy individuals who are part of networks.  Ignore investors with no connections.  They just condemn you to more mass marketing.









TOTAL COUNT 4,585,101 DATE 10/09/09
Count
STATE
Count
STATE
21,252
Alabama
5042
Alaska
72,638
Arizona
8270
Arkansas
1,520,206
California
105526
Colorado
89,266
Connecticut 11021
Delaware
10246
Distr. of Col. 275850
Florida
88943
Georgia
10056
Hawaii
5513
Idaho
189521
Illinois
38,921
Indiana
8064
Iowa
15723
Kansas
16627
Kentucky
16628
Louisiana
3226
Maine
118,684
Maryland
135126
Massachusetts
93847
Michigan
61158
Minnesota
6174
Mississippi 44267
Missouri
2220
Montana
11525
Nebraska
33175
Nevada
10098
New Hampshire
209980
New Jersey 10556
New Mexico
320688
New York
68165
North Carolina
1460
North Dakota 10121
Ohio
16868
Oklahoma
33258
Oregon
126988
Pennsylvania 8655
Rhode Island
30889
South Carolina 1689
South Dakota
34297
Tennessee 429665
Texas
18885
Utah
2128
Vermont
123323
Virginia
78426
Washington
2275
West Virginia 23770
Wisconsin
1202
Wyoming




 

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