I’ve just finished a task that lasted 12 months, required minimum hour-long discussions with a dozen sources, and entailed transcriptions that took me more than 40 hours to complete. The job was the series of interviews with the Investment Advisor Leaders’ Council that began appearing in Investment Advisor in May 2006. This month’s installment, with Don Schreiber, appears on page 25. I learned many important lessons during those interviews and in the multiple conference calls that we held over the past year with the entire Leaders’ Council, lessons that we’ve already put to work as our coverage shifts to reflect your needs as related by this heavyweight advisory board. The biggest lesson learned was a simple one: the successful advisor never rests, never believes there isn’t another piece of valuable information out there that can be used to improve his practice’s profitability. The successful advisor is an inveterate reader, of magazines like this one and other publications that may at first glance seem far afield, and a perhaps even more persistent networker–with peers, mentors, and other professionals from whom she can soak up knowledge and insight, like a sponge. That acquired wisdom then gets translated into new service offerings, or compensation plans, or marketing ideas that keep the Leaders’ practices ahead of the competition.
That penchant for networking is echoed among a group of people that every advisor would like to know better: the high-net-worth client. Lewis Schiff, author of the Armchair Millionaire, debuts a new gig for us as a monthly columnist, which this month takes the form of a cover story introduction to a special report on wealth that includes a directory of wealth management partners, an exploration of the place of alternative investments in the HNW client’s portfolio, and the winners of our third annual separately managed account awards.
Starting on page 40, Lewis begins to describe the genus he calls the Middle-Class Millionaire. These are families with net worths of between $1 million and $10 million, amounts that most observers would argue place them high above the middle class. But, Lewis argues (with proprietary research to back him up), being a middle-class millionaire is more about an approach to work, family, and recreation than it is about having a certain level of assets. These people actively develop support networks among their kind, and use the information from their peers to choose everything from their fractionally owned vacation homes to their fee-based healthcare providers. Moreover, data from the Federal Reserve shows that their numbers are increasing, putting us on the brink of a wealth boom.
The insight gained from Lewis will position you to profit from that boom, but you can’t rest on your laurels. Like the IA Leaders, you’ll need to modify your business model to meet the expectations of these clients. You’ll need to be more of a comprehensive problem solver than an asset manager. The good news is that this shift can provide you with a more diversified revenue base, and the opportunity to gain greater share of your clients’ wealth. We invite you to learn from Lewis, and your peers, in the magazine and in an online conversation at www.investmentadvisor.com. We believe in building support networks, too.