Tapping into the HNW

Understanding your strengths key to accessing high net worth market.

The market of high net worth investors in Canada is only becoming more desirable for advisors to target, with the number of Canadian millionaires projected to expand to more than 900,000 by 2010, according to several recent industry reports. But in order to capture your fair share of this exclusive market, one expert says it is critical to understand exactly what it is you are good at as a financial advisor.

"I think the biggest mistake advisors make in pursuing the high net worth market is not understanding what their core competency is," says Brent Smith, a portfolio manager with Franklin Templeton Private Client Group in Calgary, Alberta. "Not everyone can be an expert in every facet of high net worth management."

Along with defining your role with a high net worth client (are you a facilitator? Are you involved with the implementation of the plan? Are you the decision maker?), Smith, who is also chair of his firm’s investment committee, says that if you can’t offer an affluent client expertise in a certain area, find someone who can. "If your core competency is not in estate planning or insurance, then partner up with professionals who are [experts in these areas], in order to offer your [high net worth] clients the whole package," says Smith.

Speaking of partnering up, Smith says that’s exactly the kind of approach high net worth clients like to incorporate into their relationships with their advisors. According to Smith, key elements these clients look for in a partnership include:

• A personal relationship
• Trust
• Accreditation
• Vested interest

And while focusing on core competencies and partnering all around, don’t ignore the most basic of client needs when pursuing and working with wealthy clients – effective and frequent communication. According to Toronto-based Taddingstone Consulting Group’s 2001 Canadian Millionaire Report, 27% of millionaires switched primary advisors over the previous three years, with frequency of contact denoted as one of the biggest reasons for the switch.

Please call your Franklin Templeton Investments sales manager at 1.800.897.7286 to obtain more information on Franklin Templeton Private Client Group and how we can help you develop your high net worth business.

December 2002

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.