Remember old-school prospecting? When I was a financial advisor we found people who would listen to us, got them interested and later learned about their asset level. That was a bottom-up approach. A top-down approach makes better sense.
Do systematic research to identify prospects within the wealthiest 2%-5% of your local market. Get close to them. Become part of their world. Once they get comfortable, they ask you about business or you bring it up. Either way, you know they should have significant assets. This all starts with identifying the right prospects.
Four Types of Wealth
Many advisors bought lists. Other people bought the same list. Then the Do Not Call rule arrived. The people on these lists hurried to sign up. There’s lots of the “invisible rich” around. They have money, yet fall through the cracks. They aren’t on lists. You must build your own.
I wrote my book “Captivating the Wealthy Investor” and designed my seminars around identifying, meeting, cultivating and converting four types of wealth.
- High Asset, High Cash Flow – They’ve got it made. What more could you want?
- Low Asset, High Cash Flow – They earn a great salary but don’t have a bundle stashed away yet.
- High Asset, Low Cash Flow – The “Old Money.” They’ve got it, but it’s tied up.
- Under the Radar – They don’t neatly fit into a category. They made their money legitimately, but they don’t talk about it.
How About an Example?
Consider Carlsbad, California, a wealthy community near San Diego. Its population is about 115,330. Its median income is $97,145. Compared to California’s median household income of $63,783, it’s pretty wealthy. Can we get close to identifying prospects within the wealthiest 2%-5% of the Carlsbad population?
High Asset, High Cash Flow Wealth
The first logical candidates for this category are senior executives at listed public companies. Although 85 public companies are headquartered in the San Diego area, 12 are located in Carlsbad. How do you find their names? The website crmz.com is owned by Credit Risk Monitor. They sell data, yet also have a searchable database of listed public companies (including ticker symbols) they cover, organized by state on their website. Finding annual reports online and identifying officers and directors is pretty easy. Expect to find an average of 20 at each company. For 12 companies, that’s 240 people.
(Related: The Ten Commandments of Prospecting)
Certain local businesses can be lucrative. Some, like dry cleaners, auto body repair shops, florists and landscapers might be considered cash cows. Other high-volume businesses like liquor stores, gas stations, car washes and convenience stores often do well. Professionals who own businesses in fields like plumbing, auto mechanics and electricians bill hourly. Carlsbad has about 571 of these businesses.
Low Asset, High Cash Flow Wealth
Then you have people who work for someone else. They have great cash flow. The Bureau of Labor Statistics produces excellent statistics on top-earning professions in various metro areas. No prizes for guessing the medical profession fills most of those slots in most cities. Carlsbad has about 1,102 physicians, surgeons, pharmacists, psychologists, dentists and others. This information comes from publicly accessible state databases of licensing information. The website searchsystems.net is a good resource, with access to more than 55,000 public records databases.