Swimming in affluent waters with HNW clients

Three-and-a half years ago, feeling underappreciated and underutilized at the financial planning firm where he was a partner, Rich Schuette, CFP, decided it was time to take his book of business elsewhere.

Within six months, Schuette had launched his own firm, Avalan Wealth Management, to serve high-net-worth clients in the Santa Barbara, Calif., area. And he hasn’t looked back since. In the three years since, his assets under management have nearly tripled to almost $100 million, just one of the reasons he feels vindicated in his decision to try carving out his own niche in the high-net-worth market.

“I took a very conscious approach to targeting the affluent and have been very successful doing it,” acknowledges Schuette. “It has been a matter of focusing my practice and positioning myself as a specialist, an expert advisor to the affluent.”

But succeeding in such rarified air isn’t merely a matter of claiming to possess the expertise to serve affluent clients. “Everybody, whether it’s an insurance broker or a stock broker or even a CPA, says they have that expertise,” says Irwin Gross, RFC, CFS, AIF, of Family Wealth Partners in Weston, Fla.

What separates advisors like Gross and Schuette from the crowd is an ability to substantiate that claim by delivering the high-end experience — the combination of a diverse skill set, a high-touch service model and, of course, a track record for producing results that meet or exceed expectations — that the high-net-worth set tends to demand from the professionals who advise them.

And the payoff? Having served a wide range of clients in her nine years as an advisor, Andrea Blackwelder, CFP, ChFC, co-founder of Wisdom Wealth Strategies in Denver, Colo., says working with the affluent brings a unique sense of fulfillment that can’t be measured in dollars and cents. “You are better compensated [working with affluent clients]. That’s part of it. But at this point in my career, and with my expertise, working with affluent people and the complex situations they bring is where it gets really fun.”

If demand for financial advice among high-net-worth investors is any indication, there’s plenty of that kind of fun to go around. But as Blackwelder, Gross and Schuette will attest, you have to work for it. 

The Quick Study 

“I think every advisor out there ultimately aspires to swim in these waters,” Rich Schuette says of the affluent market. And he and his three-year-old firm aren’t just treading water there, having built a solid base of mostly high-net-worth clients, many of whom are business owners and professional service providers (mainly accountants and attorneys), in a relatively short period of time.

Schuette attributes much of the early success to his work with a consultant specializing in the advisory space, CEG Worldwide, whose market research, strategic guidance and ongoing coaching, he says, have been indispensible to making inroads with wealthy clients. “I keep [CEG] on retainer,” he says, “because what they do for me is just so valuable.” 

One thing they’ve done is help Schuette define and refine the service model that, he says, has proven instrumental in attracting high-net-worth clients. “The number one thing the affluent are looking for is strong service,” he observes.

Avalan uses a high-touch, team-based model, where each client gets a customized experience, including at least 30 touches a year via email, phone, face-to-face meetings, etc., along with access to an advisory team assembled by Schuette that is comprised of “high-end” life insurance and property/casualty agents, accountants, trust/estate attorneys and the like. Schuette has two such teams in place and is assembling another to cater to the needs of specific segments of his client base.

The value those professionals bring is two-fold: Not only do they complement his wealth management skillset in the context of a team-based advisory approach, “they’re a tremendous source of new business. They put me in front of their affluent clients because they recognize my expertise. 

From a new business perspective, the quarterly high-end dinners to which Schuette invites several members of his professional team, a handful of his clients, and friends of those clients, are expensive (the most recent one ran $350 a head for 16 people) but productive, he says. “It’s about great wine, great food and great company. We talk about life — no sales, no products whatsoever. There’s never been one of those where I didn’t bring back $1 million in new assets.”

That’s one way to stay buoyant in affluent waters.

The Client’s Right Hand 

Her ongoing work with mainstream clients of relatively modest means keeps Andrea Blackwelder grounded, but these days, she also savors her work with wealthy clients because, she says, it “allows me to stretch and really be useful in complex situations.”

Four years after launching Wisdom Wealth Strategies, Blackwelder, who holds multiple securities and insurance licenses, has found solid footing in the affluent market, focusing on retirement readiness for a client base made up mostly of people over the age of 50.