Pursuing HNW clients

Further statistics from Investors Economics, a Canadian firm that provides research and consulting services to the financial services industry, suggest by 2018 the number of households in Canada with investable assets in excess of $1 million will shoot up to 900,000, from 358,000 in 2003. This group is expected to control 66% or $2.83 trillion of total Canadian wealth, compared to 60.6% or 1.42 trillion in 2003.

So how can you benefit?

Business planning

The only way to ensure success and longevity as a financial advisor is to design and implement a business plan. This plan will provide you with a clear picture of your business today in relation to where you would like it to be. More than written words, it’s a snapshot of reality.

Whether you have a business plan or not, it’s never too late to reassess your business and design a plan that will put you on the path to success. Where should you begin as you transform and build your HNW practice?

Start by focusing on the most important piece of the puzzle: you. Why did you become a financial professional? Should you build your business alone, or take a team-based approach? Do you have contingency and succession plans in place? These and other questions will help you to determine your next steps.

Assess how you currently distinguish yourself from other financial professionals also pursuing HNW clients. Ask yourself, What’s your competitive edge? Are there alliances you can form that will put you in a more strategic position? Are there team members you can add?

HNW market needs

In 2008, the Canadian Securities Institute commissioned a survey of 402 emerging and established HNW families in Canada with the objective of profiling sought-after clients. The survey identified five gaps where advisors fall short in serving this market.

These gaps were the lack of knowledge regarding complex issues surrounding client-owned businesses; the inability to identify the next HNW family; not offering a complete spectrum of products; the inability to offer sophisticated wealth management services; and the inability to translate the attitudes, lifestyles and opinions of HNW clients into service offerings.

If you’re going to fill these gaps, your credentials will be important to your success. Are your skills able to meet or exceed the demands of the affluent market? What courses will you take to better prepare you on your journey? What processes should you implement to ensure a high level of consistent service? This may mean the strategy that you used 5, 10 or 20 years ago to build your existing client base is not the strategy to attract HNW clientele.

Look at your goals

The way you invest your time is an important piece to the business planning process. A recent survey of 515 U.S. white-collar workers by software company Harmon.ie and polling researcher uSamp concluded more than half of American workers waste an hour a day on interruptions: 60% due to electronics and 40% due to phone calls and personal interactions.

I’m sure this is also true of the Canadian entrepreneur. What percentage of your day is invested in activities that are both non-income producing and not related to your business goal?

In 1940, the famous American adventurer and author, John Goddard, sat down at his kitchen table and wrote down 127 goals he wanted to achieve — at the tender age of 15. A generation later, Goddard has achieved 109 of them, which speaks volumes about how goal setting can pave the path to success.

What are your personal and business goals? What is your financial freedom number? Where do you want to live? How much vacation time would you like to take each year? How much assets do you want to have under management? What is your ideal number of HNW households?

What gets measured, gets done

The only way you will know if you’re on track to reach your business and personal goals is to record and measure your activities.

For instance, if your goal is to attract five HNW clients with at least $1 million dollars in investable asset via networking events, track the number of networking events that you plan on attending and the number of contacts that you plan to meet at each event. Then you can gauge whether networking events are effective.

Measuring and tracking goes beyond having the numbers in your head. It’s about holding yourself accountable, so track your results weekly or monthly to know if you’ve strayed. And you don’t have to go it alone — you can also partner or hire a professional business development specialist.

Tyrone Matheson is a financial coach and CEO of Inside Out Training.