Working With The Ultra-Affluent

We all have (or should have) a general process in how we do business. This is particularly important when market (those with a net worth of at least $25 million). What follows describes the process I use. It is offered for your consideration to both understand what needs to be done if you are going to work with the ultra-affluent, and for some ideas that may help you regardless of the market you work in.

The process I use is called The Virtuous Cycle(TM). The process begins by developing a prospect profile. If it goes beyond an initial interview, it leads to an engagement proposal.

The initial phase requires the following:

–A great deal of preparation;

–A working knowledge of all the options available; and,

–A professional network of people with recognized experience and expertise in their respective areas.

If you get business from referrals like I do, the preparation you do before you meet with prospects begins by talking to the referral source and getting as much information as you can. Financial information is part of that information, but only a small part. Try to find as much information as you can about the prospect and/or the prospects business. You also want to make sure you get a sense of who your prospect is as a person. That includes:

–What problems does the prospect have?

–Whom and what does the prospect care about?

–What planning has the prospect already done?

As part of your preparation, you want to make sure you have the initial meeting under the most favorable circumstances. You want your prospects to know who you are, what you do, and how you get paid. To the extent you have a biography, articles that have been published, third-party testimonials, a Web page, or anything else that will enhance your credibility, you should make your prospects aware of these things before you meet.

Managing expectations also begins before you meet the prospect. You may want it understood that you dont know if you will have anything of value to offer the prospect–but that you have been of value to others in similar circumstances.

Using a fact-finder or following a script is usually not the best way to get information when meeting with an ultra-affluent prospect. It is better to know from a broad perspective what you want to cover, particularly the things that youve learned in doing your preparation that you think are important.

When meeting with prospects, get to know their agenda, although you may direct and help formulate it.

Your working knowledge becomes very important as you get a feel for the person, and the person turns to you for feedback. Confirm your prospects agenda and ask them what they want, regardless of whether they think its attainable. Using your working knowledge of strategies and techniques, you can ask qualifying questions like: “If you could have things this way (whatever that happens to be), would you want that?”

These questions are based upon things you believe you can accomplish. Paint a picture (often telling a story) of what you believe you can do, but not in specific terms–talk about the results you can produce. Those results will solve problems, offer meaningful benefits (monetary, psychological, or otherwise), and bring peace of mind to your client.

Additionally, your working knowledge of planning and the options available will help you deal with unrealistic or impractical solutions. A prospect may think he has taken care of a problem, such as the payment of estate taxes by planning to use Section 6166. Having a story to tell is an effective way of addressing the situation.

For example, I met a man who inherited a family business from his father, and whether because of lack of planning or not, the business was saddled with a large estate tax liability being paid using Section 6166. Most recently, I saw a newspaper article about how his business was going into Chapter 11 bankruptcy.

In knowing how Section 6166 works, you can hold up a mirror and ask your prospects to put themselves in the place of the people that will have to make those payments. Ask them what the effects will be on those people and on the business. How do they feel about that idea now?

Whatever method you use to record the salient points of your meeting, after the discussion review the record of the meeting and all the other information at your disposal. You can then frame the issues that need to be addressed.

In concert with a professional network, you can determine possible strategies and their results. Look at how those strategies impact upon each other as well as other planning the prospect has already done.

Now is the time to talk to the appropriate members of your professional network–brainstorm and work out ideas. Once you have satisfied yourself and the professionals with whom you consult that you have a viable proposal, take the next step.

In my case, when I use a consultative model. I want to get paid but I never want to sell a product in order to get paid. I create a proposal spelling out the process, the deliverables, and the fees.

Again, in determining my fees, I will consult with a professional in my network who offers guidance. We look at the time involved, who will be doing what work, and what costs will be incurred in the process. I try to be fair to myself and to the client. That means offering value, and not being cheap.

Under this consultative model, fees are staged so that the prospect or I can end the process at any point. Im always ready to walk away from any situation with which I am not comfortable–when I cant offer value, or the value that I offer is not appreciated. This helps me maintain my objectivity and my integrity.

Finally, heres a thought that will keep you out of trouble: Know that you dont always know. This will be reflected in your attitude with people and the way that you approach problems. It may also be one of the things youll tell a prospect about yourself when you meet.

Niels Bohr, 1922 Nobel Prize winner, describes a scientist as someone who knows more and more about less and less until he knows everything about nothing. He also describes a philosopher as someone who knows less and less about more and more until he knows nothing about everything. We are all somewhere between those extremes, and we should know that. Whether it’s a new law or ruling, someone’s new idea, or a new product or service–many times we don’t know about it now and sometimes, we may never know about it.

Thats why a professional network is so important. While some of your network may be advanced underwriting people at insurance companies, many should be professionals well known in their respective fields and specialties. These fields include asset protection, insurance products and uses, charitable planning, estate planning, estate administration, derivatives, specialty products (insurance and otherwise), qualified and non-qualified benefits, market research, and valuation. Any of these may be relative to a particular prospect, your business, or both.

The ultra-affluent have high expectations about the services and products offered to them, in part because they are wealthy. While you are always managing expectations, you want to make sure that what you deliver meets or exceeds them. Because of all the thought and effort that goes into this, you want to make sure the rewards are commensurate. These are the initial steps that you can use to help both the prospect and you reach your respective goals.

Richard L. Harris, CLU, AEP, is the managing member of BPN Montaigne LLC, Clifton, N.J. He may be reached via e-mail at richard@bpnmont.com.


Reproduced from National Underwriter Life & Health/Financial Services Edition, April 15, 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.