The Phoenix Companies Inc., Hartford, has released the results of a survey that delineates different segments of the affluent market. One purpose is to give financial advisors a tool for selling the same products to different types of people.
When the bull market of the 1990s was making many people wealthy, such information would probably have been ignored by advisors, says Stephen Gresham, chief sales and marketing officer at the Phoenix asset-management unit.
The reason, he continues, is that they were making a good living selling products to clients who were investing heavily in what they perceived as a reliable, enduring stock market.
But now, after three years of a bear market, clients have regained their balance and are less willing to buy just anything, he explains. So, advisors need to know with whom they are working, and what appeals to them and why, in order to sell, he says. This is especially true of baby boomer clients, Gresham says.
“Baby boomers are waking up to the fact that they have a financial crisis looming before them,” Gresham says. Namely, how does one prepare for retirement when the products that worked when equities were strong are now defined largely by weak returns?
Most products have equal application to the different profiles, he says. The information from the survey is meant to help the advisor package the approach, not decide which products to sell.
“An advisors success would be in his ability to approach a client in a way tailored for a person with that sensibility,” Gresham says. “Its not that the products are right or wrong, but it gives you a feel for how to approach the person.”
Phoenix used the survey answers to divide the wealthy into six groups: Deal Masters, Altruistic Achievers, Secret Succeeders, Status Chasers, Satisfied Savers and Disengaged Inheritors.
Members of some groups were wealthy but also reluctant to seek professional financial advice.
Phoenix describes the Deal Masters, or 11% of the survey participants, as relatively young dealmakers who have an average age of 49 and a “winner takes all” attitude about life. They have achieved an average net worth of $3.5 million.