Executive orders: How to attract corporate executives to your practice

(Mid-February 2004) It’s a tough time to be an executive. A rash of corporate missteps, accounting scandals and diminishing compensation have all added up to a difficult couple of years for Canada’s corporate elite. All the more reason why the busy executive needs you.

Next to business owners, executives are the most significant group of individuals in a high-net-worth (HNW) practice. The complexities executives face can make for some challenging (and satisfying) work.

That said, executives are not like other HNW clients. Attracting their attention requires you to take a different approach. Here are some ideas on how you can do that:

1. Get in sync with the executive mind.

Many advisors find working with entrepreneurs to be intuitive and natural — after all, many of us are entrepreneurs ourselves. The same can’t always be said of corporate executives. Which is why the first step in your marketing effort is to understand the executive mind, and match your practice to it.

Executives are busy people who place great value on systems and structures that save them time. Emphasize features of your practice that do that (detailed account reporting, net worth summaries, etc.) and you will pique executives’ interest.

Another common executive trait is the drive to independence. Many executives look forward to the day they leave the office. Provide case studies that demonstrate your ability to secure financial independence for your clients and you will impress executives.

2. Stress the value of diversification.

Stock options and other performance-based pay systems often encourage executives to concentrate their portfolios in company stock. For the most part, executives are aware of how risky this can be, and are looking for professionals who can offer them solutions that can minimize this risk.

Position yourself as an expert on the subject by being a strong, consistent advocate for diversification at the initial client meeting. Communicate your familiarity with options and other compensation structures, and offer advice as to when and how executives may best put them to work. Demonstrate sensitivity to issues such as insider restrictions and reporting rules. Present specialized stock monetization strategies (forward and range-forward sales, etc.) that allow executives to divest themselves of their positions without actually selling.

3. Connect with other executives.

More than other HNW groups, executives tend to stick to their own. That can make it difficult to “break into” their personal and professional networks, but once you do, further contacts and referrals can follow.

Start by carefully cultivating your existing relationships with executives. Offer yourself as a natural choice for colleagues who are looking for financial advice. Join industry groups, associations or clubs executives belong to. Don’t be content to simply schmooze within these groups. Participate as a board member, a speaker for association events or a columnist for the association newsletter and you can quickly cement your professional reputation.

Above all, cultivate close relationships with accountants, lawyers and other centres of influence (COIs) who work with executives. Executives place great value on the opinions of COIs, making them an important point of contact for you.

Without a doubt, corporate executives present a tremendous opportunity for financial professionals. But it’s a market that takes some work to break into. Then again, as any executive will tell you, a little hard work can do you a lot of good.

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Thane Stenner, CIM, FCSI, is a first vice-president and investment advisor with The Stenner Group™ of CIBC Wood Gundy. The views of the author do not necessarily reflect those of CIBC World Markets Inc. This article is for information only. CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of Canadian Imperial Bank of Commerce and Member CIPF. Thane can be reached at thane.stenner@cibc.ca.

03/05/04