Building
a practice full of High-Net-Worth clients involves developing relationships
with wealthy people. But recent "Do Not Call" legislation has left
many advisors looking for replacement strategies to reach this market.
Look
no further. The HNW prospects you want to target have almost never
been reachable by phone. Before "Do Not Call" legislation, they
utilized do-not-call barriers such as answering machines, call blocking,
caller ID, and staff members who screen their calls.
But
don't despair. It can be easier to meet HNW prospects socially than
to get them on the phone. Wealthy individuals are often involved
in local charitable or service organizations. They may be motivated
for philanthropic reasons, for business reasons, by a motivation
to "give back," or simply because of family tradition. You can get
involved in those organizations as well, and can give back to your
own community. Doing so will also give you an opportunity to meet
those HNW prospects, and for them to get to know you in a non-sales-oriented
environment.
You
can be involved in many different types of organizations if your
only goal is to give back to the community. However, to give back
and build relationships with HNW individuals, the organizations
should share four characteristics:
They
should attract wealthy individuals. The organization needs a
significant number of donors at the $1,000+ level. Community organizations
such as museums and hospitals publish annual reports (also Reports
to the Community or Records of Philanthropy) that provide this information.
They
should provide opportunities to meet and greet. The ideal organization
brings members together once a month at a meeting, event, or opening.
Museums are an ideal example. Organizations with one or two major
meetings a year don't give you the same opportunity to meet people.
They
should have high visibility. People should recognize the organization
and immediately make the connection: "That's the wealthiest club
in town; if she belongs, she must be successful."
They
should provide a positive impression. Avoid controversial issues
and organizations. If you joined an organization representing one
side of an issue where public opinion was evenly split (should we
build a bypass or preserve the environment?), you may be alienating
50% of your potential HNW prospects.
Examples
of groups that exhibit these characteristics include:
-
Museums
- Medical
charities
- Chambers
of Commerce
- Religious
institutions
- Neighborhood
associations
- Alumni
associations
- Country
clubs
- Hospitals
-
Special-interest clubs, such as those forsports car owners.
The
Cost Is Reasonable
Time
is always an issue, so to effectively utilize a social prospecting
strategy, consider two rules of thumb. First, choose four organizations
to join, each of which attract different audiences. In other words,
don't join four art museums. Second, commit one evening per month
to each organization.
My
experiences at a local museum can serve as an example. Here's how:
Exhibition
openings-three hours a month. An opening may run from 6:00 P.M.
to 8:00 P.M. Add 30 minutes transportation time getting there and
back.
Networking
afterwards-three hours. When the opening concludes, no one has
had dinner yet, so say to your new friends, "We're trying that new
Italian restaurant in town-want to join us?" There's no extra cost
to you: Most people will understand it's a "Dutch treat."
Dinner
parties-six hours. Developing relationships can take forever
if you see people only once a month. Inviting people to dinner at
your home speeds up the process. Invite two couples and invite a
client couple. Between shopping, cooking, entertaining, and cleanup
you'll invest about six hours.
Involvement
with community organizations conjures up visions of serving on boards
and making major donations, both of which can stretch the resources
of many advisors. We're talking about belonging to an organization,
not serving on the board and running it, so this brings the time-
and dollar-costs down. Let's use our museum example.
Basic
membership-$50-$100. This usually enables you to attend receptions
and openings plus visit without paying admission fees.
Annual
fund-$100+. Like your school, museums have a campaign to raise
operating funds for the institution. Contribute at least $100 so
you are listed in the annual report. Different levels of contribution
get you on different lists. The higher the donor level, the more
exclusive the invitations you receive.
Special
events-$50 each. A museum may attract non-traditional audiences
through such events as Jazz Nights. Attend a few of these events.
Assuming your local museum has one opening per month, your investment
of $250-$300 has enabled you to attend regular events (often monthly)
plus a couple of extra events.
What's
the Payoff?
Many
advisors join an organization but then rarely attend functions or,
when they do, mingle only with their friends. These advisors often
say: "I've never gotten a client this way."
The
objective is to meet six new people at every event you attend. Six
people per event, four events per month, twelve months to the year
yields 288 high-net-worth prospects. Can it be so simple?
No,
because two-thirds of the people you meet will be wrong. A third
may become great friends, but don't fit your ideal client profile.
Another third may be wealthy, but there's no common ground. This
leaves the final third of about 100 wealthy people who like you
and share similar interests.
Remember,
when meeting people, your aim is to communicate three points: who
you are; what you do; and why you are good at it.
Don't
rush the process. This isn't about swapping business cards, then
calling for business. It's about raising your visibility, meeting
the right people, and creating a positive impression.
Okay,
so you're attending events and meeting people. How do you know those
are the right people to meet? Start with the organization's annual
report, which often identifies the major donors, then get to know
two members of the group's professional staff: the membership director
and the development director. Those two can introduce you to a third
important staff member, the publicity director. These people know
most of the key members of the group and often can provide introductions.
Only
several months later will you want to meet the museum director.
Other advisors may want to go straight to the director, often approaching
them to "handle the endowment" or targeting some other lucrative
piece of business. They've heard it all before. You want to be different.
Let them learn about you.
Ways
to Make an Impact
The
strategy up to now has been social prospecting-meeting people and
developing friendships. You may decide, for business reasons and
personal reasons, that you want to take an active role in the group.
If so, identify an issue that's critical to the organization, which
usually involves one of three areas:
Membership.
Dues-paying members are the backbone of any organization, and gaining
new members is the responsibility of the membership director. Here's
one way to make an impact: Invite 20 friends to your home for a
cocktail party and explain that the purpose is to "learn about the
exciting things the museum is planning to do and encourage you to
get involved." Someone from the museum speaks to the group for 15
minutes and gathers completed membership applications. When that
person returns to the museum and tells the membership director how
you signed up 15 new members, you are on the right track.
Fund
Raising. The people who bring in the money are among the most valuable
in the organization. Here's how you can make an impact in this area:
Meet with a wealthy community member and ask her to co-sponsor an
event. Attend the event with that person, introduce her to other
members, and make sure she gets attention and recognition. Now you
have developed a relationship with that person who made the donation
but also had a good experience. It paves the way for approaching
her again.
Event
Planning. Most organizations do black-tie dinners, golf outings,
or some other high-profile event. Whether you have one day a year
or one day a week to invest, you can get involved. Here's how: Many
groups sponsor charity auctions, with prizes donated by wealthy
individuals or successful business owners. Follow the strategy shown
above in fund raising. Again, you gain appreciation from the donor
and from the group's development director, and gain satisfaction
from supporting this worthy cause yourself.
The
Bottom Line
Business
comes in many ways when you take this low-key approach to meeting
high-net-worth people. You may do business with people you meet
in the organization and those people may become sources of referrals.
Likewise, you can find business within an organization, such as
managing an endowment, and you can get referrals to other, similar
organizations.
Remember,
you're getting an opportunity to tell your story-who you are, what
you do, and why you're good at it-and you're increasing your visibility.
You may also find the opportunity for speaking engagements- on behalf
of the organization or about planned giving opportunities to potential
donors-and an ideal location for delivering seminars. Cultural organizations
are often centrally located, and the organization's name and location
can add to your stature.
In
the end, this approach provides benefits to all. Meeting the right
people is critical to building a high-net-worth clientele, and it
can be done while giving back to your community and enjoying yourself.
Bryce Sanders, a 20-year financial services veteran,
is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania,
which trains advisors on how to identify and meet high-net-worth individuals
and transform them into clients. He can be reached at brycesanders@msn.com.
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