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Selling To The Moderately Rich

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Broker-dealer home offices should try to help advisors with the drudgework involved with serving “emerging affluent” investors.

Researchers at Cerulli Associates Inc., Boston, present that conclusion in a new report on strategies for serving individuals with net worth between $1 million and $25 million, who now control about $8 trillion in investable assets.

Those individuals are popular prospects because they hold a large amount of wealth and are relatively common, but one problem with serving them is that they are extremely diverse, the Cerulli analysts write.

The analysts have classified emerging affluent investors in 7 segments: business owners; established retirees; real estate wealthy; spenders; up-and-coming professionals; inheritors; and the suddenly affluent.

Broker-dealers that want to reach this market should free advisors’ time to deal with emerging affluent clients’ more complicated problems, such as small business planning issues, by coming up with standardized modules to help with the clients’ simpler concerns, such as college planning, the analysts write.