Building a practice full of high-net-worth clients involves developing relationships with wealthy people. But recent “Do Not Call” legislation has left many advisors looking for replacement strategies to reach this market.
Look no further. The HNW prospects you want to target have almost never been reachable by phone. Before “Do Not Call” legislation, they utilized do-not-call barriers such as answering machines, call blocking, caller ID, and staff members who screen their calls.
But don’t despair. It can be easier to meet HNW prospects socially than to get them on the phone. Wealthy individuals are often involved in local charitable or service organizations. They may be motivated for philanthropic reasons, for business reasons, by a motivation to “give back,” or simply because of family tradition. You can get involved in those organizations as well, and can give back to your own community. Doing so will also give you an opportunity to meet those HNW prospects, and for them to get to know you in a non-sales-oriented environment.
You can be involved in many different types of organizations if your only goal is to give back to the community. However, to give back and build relationships with HNW individuals, the organizations should share four characteristics:
They should attract wealthy individuals. The organization needs a significant number of donors at the $1,000+ level. Community organizations such as museums and hospitals publish annual reports (also Reports to the Community or Records of Philanthropy) that provide this information.
They should provide opportunities to meet and greet. The ideal organization brings members together once a month at a meeting, event, or opening. Museums are an ideal example. Organizations with one or two major meetings a year don’t give you the same opportunity to meet people.
They should have high visibility. People should recognize the organization and immediately make the connection: “That’s the wealthiest club in town; if she belongs, she must be successful.”
They should provide a positive impression. Avoid controversial issues and organizations. If you joined an organization representing one side of an issue where public opinion was evenly split (should we build a bypass or preserve the environment?), you may be alienating 50% of your potential HNW prospects.
Examples of groups that exhibit these characteristics include:
o Medical charities
o Chambers of Commerce
o Religious institutions
o Neighborhood associations
o Alumni associations
o Country clubs
o Special-interest clubs, such as those for sports car owners.
The Cost Is Reasonable
Time is always an issue, so to effectively utilize a social prospecting strategy, consider two rules of thumb. First, choose four organizations to join, each of which attract different audiences. In other words, don’t join four art museums. Second, commit one evening per month to each organization.
My experiences at a local museum can serve as an example. Here’s how:
Exhibition openings–three hours a month. An opening may run from 6:00 P.M. to 8:00 P.M. Add 30 minutes transportation time getting there and back.
Networking afterwards–three hours. When the opening concludes, no one has had dinner yet, so say to your new friends, “We’re trying that new Italian restaurant in town–want to join us?” There’s no extra cost to you: Most people will understand it’s a “Dutch treat.”
Dinner parties–six hours. Developing relationships can take forever if you see people only once a month. Inviting people to dinner at your home speeds up the process. Invite two couples and invite a client couple. Between shopping, cooking, entertaining, and cleanup you’ll invest about six hours.