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Portfolio > Economy & Markets > Fixed Income

Low profile, high upside

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Some advisors crave the spotlight that comes with having a stable of wealthy, powerful and famous A-list clients. Others such as certified financial planner Nancy L. Jones are content to toil in relative anonymity, serving everyday folks of more modest means.

And that’s fine by Jones, principal at NLJones Inc. in Rancho Cucamonga, Calif., because working primarily with middle-income senior clients provides plenty of opportunity to make a comfortable living while putting one’s expertise to work on behalf of people who can really use it. Though advisors who target clients from the middle-income bracket over people from the high-net-worth category aren’t as likely to land six-figure account-management fees or product commissions, nor referrals to movie stars, pro athletes or anyone else from the financial stratosphere, their efforts to serve that segment can be fulfilling both emotionally and financially.

“These are people who may be living somewhat frugally, but who may have fairly sizable pensions, 401(k)s or inherited wealth,” says Jones. “Some of those middle-income people have a lot of money. And once you get to know them, you find they’re more affluent than their lifestyle might indicate.”

Evidently the word is out, as more advisors appear bent on tapping the middle-income market. “I think the competition [in that segment] is growing,” says Susan O’Grady, principal at EQUIPOISE Wealth Management in Denver, “in part because it has been an untapped area” for financial advisors and planners.

Given the growing appeal of middle-income senior clients and the intensifying competition to reach them, the biggest challenge for an advisor who covets that type of client is marketing and making a name for oneself. Planners such as Jones and O’Grady who have long made a living in that space agree that conventional marketing tools – print advertising, bulk mailings, sales-oriented free lunch seminars and the like – clearly lack the impact of subtler, less traditional, more relationship-oriented methods of promoting a practice in the middle-income demographic.

Trust, reputation and results
Among all the demographic groups for an advisor to target, the middle-income senior bracket is the one that most needs the help of a good financial planner, contends Fran Twiddy, who founded her own advisory practice, Frances E. Twiddy Associates in St. Claire Shores, Mich., in 1983.

“They aren’t always the most sophisticated investors,” she says, “and in an increasingly complex market, they need guidance navigating the financial planning waters so they can keep up with inflation and not lose that nest egg.”

Like O’Grady and Jones, Twiddy eschews conventional marketing methods; no newspaper ads or radio spots; no purchasing prospect lists for cold-calling or direct mail; no sales seminars. For them, building and sustaining a robust client base consisting mainly of middle-income individuals and families is all about relationship-building, be it through outreach to affinity groups, circulating in the community, taking on the role of educator or capitalizing on media opportunities when they present themselves.

The overriding goal with all these efforts is to build trust and to position oneself as an experienced, unbiased financial planning expert. Because they are frequently exposed to the seedy underbelly of the financial services industry – namely the sell-at-any-cost seminar circuit – middle-income seniors in general are turned off if they sense an advisor is merely trying to peddle product, even when it’s something a person truly needs, says Twiddy. That’s why advisors who set aside their sales inclinations tend to set themselves apart and thrive in the middle-income segment. “If it’s clear you’re working only with your clients’ best interests in mind, without any regard to how you’re going to be compensated, the money follows. And it’s going to come to you in baskets.”

Basically middle-income seniors want to put their finances and their futures in the hands of someone they consider to be “one of their own,” says Jones. “What I’ve found is they don’t want to work with the high-powered brokers and salespeople.”

That’s not to say seniors of modest means care little about outcome. They want an advisor who delivers strong results to go with high ethical standards, she adds. “I don’t think the competition [among advisors targeting the middle-income bracket] is that tough if you understand your market, you’re dedicated and you’re very good at what you do.”

The most direct route to the middle-income segment is through community activities and interactions with affinity groups, O’Grady and Twiddy concur. Twiddy speaks annually to a senior investor group, for example, while O’Grady holds pro bono financial education programs at churches, investment clubs and the like.

While those outreach efforts don’t usually yield immediately tangible results in terms of converting prospects to clients, they generate good will that later works in the advisor’s favor. “You may get business from it; in all likelihood you won’t get any new business from it right away,” says O’Grady. “But the fact is, it puts your name out there. And it does a lot for the planner in terms of raising your communication and public speaking skills and getting you to be better at thinking on your feet.”

With so many affinity groups providing access to middle-income senior prospects, where to begin? Jones recommends that advisors target groups with interests that align with their own. “I have an advisor friend who happens to be an avid bass fisherman. He went to a bass fishing show and now he’s pretty much the financial planner for bass fisherman. These are people who do things like fish, bowl and take their RVs on the road. If you share those kinds of interests, go where they go. It’s fine if you tell them you’re a financial planner. But don’t go there just to sell them something.”

Beyond affinity groups, a strong community presence can amount to a low-profile, no-pressure means of marketing one’s practice. The advisor should assume that his or her next client or referral could come from a person he or she meets at a party, the grocery store or a community service outing.

“I’m always out there, trying to make the next connection,” says O’Grady. “I view every individual I meet, every contact I make, as a potential client. So I try to be respectful to everyone I meet. As a financial planner and as a person, it’s important to always represent yourself and your profession with the highest possible standards.”

And then there are marketing opportunities that seemingly come out of nowhere, although they may be the product of the advisor’s community and affinity ties. In 2002 a prominent national financial magazine named O’Grady one of the nation’s 100 top financial planners. The result, she says, “was an amazing boost to my new client base. People came to me from all over the country.”

The lesson she took from the experience: Be cooperative with the media, whether it’s a local newspaper or a national broadcast, because even a single sound byte or quote can be enough to convince people you’re a personal finance authority.

Teach them to trust you
Seminars are a dime a dozen in the senior market, but Jones says they still can be a powerful marketing tool within the middle-income segment, as long as the focus of the event is purely educational and informational, not promotional.

“There are some hot issues out there that aren’t adequately being addressed for these people,”| Jones says. “What’s worked well for me is to hold educational seminars where I don’t sell anything at all. If I can provide them with truly valuable information on subjects that matter to them, and do it with no strings attached, they appreciate it.”

Jones developed a seminar series to address topics such as protecting against identity theft, using the Internet and the computer, and strategies for saving on prescription medication. Beyond mentioning her background and practice during opening remarks at each event, she avoided overt self-promotion and marketing, instead turning the podium over to experts she recruited for the particular program subject. As people returned for additional seminars in the series, she gradually built relationships with them through informal pre- and post-event conversations. Eventually Jones reaped what she sowed by converting the connections she made at her seminars into new clients.

Because it’s rooted in relationships of trust, that kind of approach isn’t suited to advisors focused on making a fast buck in the middle-income senior segment. “You need to have patience” in building a middle-income practice,” advises Jones. “This isn’t something where you jump in, make a killing, then move on to the next victim.”

For advisors like Jones, O’Grady and Twiddy, patience continues to pay dividends.


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