Strategy Highlights

Week 6
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Strategy 2: Implement Wealth Management

The five key financial concerns of the affluent

Affluent clients want to work with true authorities: financial advisors who can help them make informed decisions to solve their most pressing financial challenges. When you know what those challenges are and can articulate them succinctly, you are ready to position yourself as the expert your wealthy prospective clients want. These are the five major financial concerns of the affluent:
  1. Wealth preservation. The goal of wealth preservation is to produce the best possible investment returns consistent with the client’s time frame and tolerance for risk.
  2. Wealth enhancement. This is about tax mitigation: minimizing the impact of taxes on clients’ investment returns while ensuring the cash flow they need.
  3. Wealth transfer. Effective wealth transfer is all about taking care of heirs: finding and facilitating the most tax-efficient way to pass assets to loved ones in ways that meet the client’s wishes with minimal difficulty and cost.
  4. Wealth protection. This includes all concerns about protecting the client’s wealth against catastrophic loss, potential creditors, litigants, children’s spouses and potential ex-spouses and identity thieves—in short, ensuring that their assets are not unjustly taken.
  5. Charitable giving. Many affluent individuals are looking outward beyond their own families to the world at large. For these people, making meaningful gifts to charity in the most impactful way possible is a key issue.

The six Cs of client loyalty

These are the characteristics that build authentic loyalty in clients. Loyal clients will be incredibly important to your practice, as they will provide you with the lion’s share of your introductions to qualified prospective clients and of additional assets to manage.
  1. Character. Character is about the personal qualities clients want in their financial advisors. Integrity is perhaps the most important quality, but trust and dependability also rank extremely high.
  2. Chemistry. Chemistry is the ability to be “in sync” with your clients. You have chemistry when you connect with them—you know what they want to talk about and you see eye-to-eye on important issues.
  3. Caring. You must be genuinely concerned about your clients’ well-being. They should be more important to you as people than making money.
  4. Competence. Competence is about being smart, technically capable and an authority in solving the financial challenges of your niche community—as well as being able to demonstrate your competence in compelling ways.
  5. Cost-effectiveness. Being cost-effective means you deliver true value to your clients for the cost of your services and products. Do not confuse cost with value. Affluent clients are generally willing to pay premium prices, but only when they believe you are worth the cost.
  6. Consultative. When you are consultative, your client relationships are framed as ongoing partnerships over time. This makes it the most effective characteristic for building client loyalty. There are three central components to a consultative approach: a cooperative orientation, appropriate contact on both financial and nonfinancial matters and customized communications.