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The Optimal Methods For Sourcing Ultra-Affluent Clients

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The Optimal Methods For Sourcing Ultra-Affluent Clients


In our work we find it essential to discriminate among different classifications of wealth. According to our definition, the ultra-affluent are families who possess a net worth of $25 million or more. Worldwide, the ultra-affluent command nearly $12 trillion in private wealth. Their great affluence alone makes them exceptional clients for advanced planners.

For their part, advanced planners bring enormous value to these families. Because they adopt a consultative approach, advanced planners move from challenges and needs to solutions and resolution of critical issues. For so doing, advanced planners are well rewarded for their expertise and efforts. These rewards are not only financial; they are personal as well.

For advanced planners, a critical issue is sourcing. Specifically, what are the optimal methodologies for sourcing qualified ultra-affluent clients? It is important to be very clear what we mean by “qualified.” It is not enough to get an introduction and a meeting. It is essential to get the meeting on a most favored basis.

The best means of sourcing new ultra-affluent clients is through other advisors.

This is a different approach to sourcing compared to working with less wealthy clients. Among affluent clients ($5 million to $25 million in net worth), referrals from current clients dominate the sourcing process for advisors. Among the ultra-affluent, this approach rarely works very well. Among the ultra-affluent, advisor referrals dominate. Therefore, the answer to sourcing ultra-affluent clients is building bridges to advisors who have such wealthy clients.

The best means of sourcing new ultra-affluent clients from other advisors is through a formal process of knowledge transfer. While the sharing of fees and commissions will usually accompany referrals, knowledge transfer drives referrals.

Knowledge Transfer

The importance of knowledge transfer cannot be overemphasized in sourcing ultra-affluent clients. We already know knowledge transfer is important in sourcing affluent clients, so it is not surprising that knowledge transfer is also crucial in sourcing the ultra-affluent.

Most successful producers already obtain wealthy (though not necessarily ultra-affluent) clients from other advisors. In fact, recent research studies among accountants and attorneys show that they readily refer clients to producers who are valuable business resources to them. Of course, the best way to become a business resource is through knowledge transfer.

These results correlating value as an information resource with client referrals have been replicated in more than a dozen studies conducted over the last five years. We have found that this information resource approach to sourcing new business is effective across all professional servicesinvestment management, investment banking, and even strategy consulting.

We consistently find that knowledge transfer is the best way for advisorsincluding advanced plannersto be “top of the mind” with other advisors when referral opportunities arise.

The process of knowledge transfer can take a number of different forms, each of which is associated with a set of benefits and costs. A common approach is when a producer calls on other advisors to introduce new ideas, strategies, tactics and products. This can be something of a hit-or-miss approach; it is most effective if the other advisor is just then facing a client situation in which the new approach is relevant. However, considerable energy has to be expended for that one opportunity.

Another problem with this approach is that it defaults to the “strategy of the day.” Bringing the next latest-and-greatest strategy creates a transactional mentality, not a relationship.

At the other end of the knowledge transfer spectrum we find a more effective approach. When relationships, not transactions, define the advisor-to-advisor relationship we have cross-professional relationships. In contrast to the transactional approach, a relationship approach is typified by a consultative approach to dealing with the ultra-affluent client and the other advisor. Cross-professional relationships are effective in creating a pipeline of ultra-affluent clients.

Cross-Professional Relationships

It is obvious that a steady stream of ultra-affluent (or some other level of wealthy) clients is highly desirable. We now know how to create that reliable stream through cross-professional relationships. (See chart.)

In the cross-professional relationship business model, an advanced planner generally creates strategic alliances with several other advisors to ultra-affluent clients. This approach results in several benefits to the advanced planner; they will have a better understanding of the business models of these other advisors, there will be greater mutual trust between advisors, greater value for the ultra-affluent client will result, and there will be increased revenues for all advisors involved. All this is predicated on knowledge transfer from the professional advisor to the other advisors in their network.

What are the roadblocks to establishing cross-professional relationships? First and foremost is the common misperception among advanced planners that they need to keep their cutting-edge strategies and tactics cloaked in secrecy. (Some even try to erect legal barriers around their state-of-the-art ideas.)

They are mistaking their technical expertise for their source of professional prowess. In reality, it is not their expertise that confers success, it is their ability to create mutually profitable relationships. These relationships are created and sustained through the sharing of expertise, not the husbanding of it. Strong interpersonal skills distinguish those who are going to be the most successful in tapping into the ultra-affluent client pipeline.

Such openness does not necessarily eliminate the need for confidentiality agreements, which can often protect and benefit advanced planners and their clients. However, based on the payback, it is essential to find the middle ground when it comes to sharing knowledge.

Keep in mind that expertise must constantly be updated. Todays cutting-edge approach becomes outdated by tomorrow. For advanced planners to stay state-of-the-art, cutting-edge strategies and tactics must be constantly evolved. Advanced planners are always creating new knowledge, and that new knowledge translates into value for their ultra-affluent clients and their referral network of other advisors.

Because information and industry trends come and go so quickly, however, it is difficult for advanced planners to stand out in their highly competitive environment on the basis of expertise. That is why cross-professional relationships have much to recommend them. In a cross-professional relationship, the advisor becomes a reliable technical resource for other advisors to the ultra-affluent.

As a technical resource, other advisors who are not involved in advanced planning yet have ultra-affluent clients can better serve these clients, thereby strengthening their relationships. Freely transferring expertise to other advisors may be counterintuitive to some, but is often the best course of action for an advanced planner.

The transferring of expertise must be accomplished in context, of course. Other advisors have their own agendas and therefore will need to be worked with accordingly. Aside from generating revenue for the other advisors in their “worlds,” the advanced planner must develop an effective working relationship with these advisors, and think through the manner in which everyone is compensated.

In our experience, the best advanced planners know the needs and wants of their strategic partners as surely as they know the needs and wants of their ultra-affluent clients.

What has proven to work exceptionally well are strategic scenario sessions. In these sessions, the other advisor raises a case of a particular ultra-affluent client, and through discussion the advanced planner helps to identify meaningful opportunities.

Strategic scenario sessions showcase the expertise of the advanced planner and model effective cross-professional relationships. They also provide the advanced planner with insight into the business models of other advisors and so aid in the creation of mutually beneficial relationships.


Ultra-affluent families who possess a net worth of $25 million or more are significant opportunities for advanced planners. The challenge is creating a sustainable and reliable pipeline of such clients. Approaches that have worked with other affluent segments do not work here. The answer is cross-professional relationships with other advisors.

is principal of Prince & Associates, a research and consulting firm in Shelton, Conn. He can be reached at [email protected].

Reproduced from National Underwriter Life & Health/Financial Services Edition, January 14, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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