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Successful prospecting to the person with a million-dollar portfolio, or the one who buys million-dollar or multimillion-dollar life policies, can require different tactics than prospecting the “mass affluent” market (i.e., those with less than $1 million of investment assets).

I say “can” require different tactics because there are two equal-size wealth markets–the half who have accumulated significant assets but do not think of themselves as rich and those that have similar financial circumstances yet do think of themselves as wealthy.

Of the 107 million households in the United States, more than 3.7 million have investable assets in excess of $1 million, according to a study by the Spectrem Group, Chicago, Ill. On a national basis, that means that 3.49% of the households have a million dollars in liquid funds, although you would find the percentage of million-dollar households can exceed 6% in more affluent communities like Nassau County, San Jose or West Palm Beach.

The first half of the affluent market is described by Dr. Tom Stanley in his book “The Millionaire Next Door.”

He describes this person as someone who is in his mid- to late 50s, owns a small or medium sized business, works 60+ hours a week and has been married to the same woman for 30+ years.

You can picture this guy–a real “Sam Walton type,” driving his older pickup truck and still living in the same three bedroom, two bath home even though his net worth is $5 million. These people have created their wealth by starting businesses or investing in real estate and still behave like “salt of the earth” people.

This type of individual responds to the same marketing methods as the middle-income buyer: general seminars, direct mail and advertising. There is little different you need to do to reach these folks if you are already prospecting the middle market. In fact, there is little you can do to isolate these folks as they live in middle-income neighborhoods and are inconspicuous since they dont buy luxury cars or rent the presidential suite when taking a cruise. Because multimillionaires are fewer in number, a seminar that attracts 50 people will typically only have three to five attendees that are multimillionaires.

Real estate owners and small business owners heavily populate a large percentage of this group. Therefore, one way to isolate these folks is to obtain a list of residential rental property owners or commercial property owners and of business owners with fewer than 50 employees–any list broker can help you with this. Not only can you contact them individually but also there may be property-owner associations or business owner associations that can become a prospecting platform. You may be able to arrange a speaking engagement or get published in their magazine.

Mass marketing techniques, however, will not work on the other affluent group, the Armani suit-wearing crowd. These people do not respond to mass marketing and need to be met through introduction in social or professional circles. They live in exclusive neighborhoods, drive late model luxury cars, belong to “the club” and may be immersed in their self-importance.

So how do you meet these millionaires? On their turf. One producer I know joined the best country club in Palm Springs, played golf three times a week at 2 p.m., and met wealthy business owners, retired executives and large shareholders of major companies. Never having more than 62 clients, he became one of the wealthiest financial producers in the United States.

Heres another approach. Each year, when the opera in your city has the annual gala, you buy a table for $2,500 and bring your best clients (a nice treat for them). You will get noticed. The following week, if you are not called to volunteer on one of the opera committees, make the call and volunteer yourself. The committee will usually be populated with wealthy older patrons of the arts. You make friends, get invited to their parties and leverage each contact to the next.

Another approach is to dominate an industry. One planner I know has realized that franchise owners are wealthy folks. So he found out that they had a local association at which he could give a speech. He called each franchise owner individually and set a time to meet. He did not call them to get immediate business but rather called them with a soft sell approach. “I understand you are a successful franchise owner. I am building a financial planning firm that assists franchise owners. Could I interview you about the greatest challenges that franchise owners face?” He has written an article on pension plans, for their newsletter, specifically addressing the franchise owner situation.

Focus on money in motion. Money is in motion during the following events:

? Death. Do you prospect estate attorneys?

Employment termination. One successful advisor contacted an outplacement firm and offered his two-hour class, “How to manage your money between jobs” to the outplacement firms clients–executives that had been laid off. These executives need to rollover some hefty 401(k) balances–who do you think gets hired?

Sale of a business. Do you prospect business brokers?

Sale of real estate. Do you prospect commercial real estate brokers?

The key is to develop a specialty that wealthy people seek. In order to fill a room with wealthy real estate owners, I secured a list of people who owned at least $1 million of real estate. I sent a seminar invitation entitled, “Estate Planning for Owners of Residential Income Property.” I had 58 millionaires in the room.

In addition, you cultivate relationships with people who can introduce you to their wealthy clients. These are called host-beneficiary relationships. You find a host that has relationships you want and you become the beneficiary of those relationships. Think beyond CPAs and attorneys. Let me offer more creative examples of a host.

What about the owner of the Mercedes dealership? Might he be interested in inviting his best clients to lunch and a talk (by you) on “Maximizing the Tax Benefits from Business Use of Luxury Cars, Boats and Vacation Properties?”

Would the commercial real estate broker like to have you write a booklet or give a talk to his prospects on, “How to Use a Capital Gains Elimination Trust to Avoid Capital Gains Taxes?” I always start a discussion of charitable remainder trusts calling them “capital gains elimination trusts” so that people listen before they prejudge. What other hosts can you think of that have wealthy clients where you can be the beneficiary?

As you can see, prospecting to the wealthy is not that different than any other niche you choose to market to. You must understand how they think, design your marketing program to address their key concerns and leverage the right host-beneficiary relationships to acquire more clientele within that niche.

, CPA, CSA, RIA, MBA, is president of NF Communications, a Walnut Creek, Calif., firm producing marketing systems for financial sales professionals. His e-mail is lklein@nfcom.com.


Reproduced from National Underwriter Edition, May 5, 2003. Copyright 2003 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.