Most advisors want to cultivate the high-net-worth market. They want wealthy people as clients. Different firms have their own definition of what counts as wealthy. We may do research to identify these people. We have contact information. We know where they volunteer, relax and unwind. Many advisors are hesitant to approach them because of misconceptions we have about “The Rich.”
1. The rich are really scary. We think of characters we see on TV or in movies. It’s as if they say: “I’m rich. You’re not. Be deferential. Show me respect.” We get the idea the rich are arrogant.
Why it’s a myth: This might be true of certain celebrities, organized crime bosses and drug lords. In your local market, your wealthy prospect is likely a senior-level corporate executive who climbed the ladder, a small-business owner who made it through hard work or a busy professional who doesn’t have time to look after their investments. They are often ordinary people who did well.
2. The rich are screwed up. When did you start watching daytime television? There’s an image that the wealthy got that way by lying and cheating their way to the top. Their competitors are lifetime enemies. Their relationships with their children are combative. If you become their advisor, they will look for a way to take advantage of you.
Why it’s a myth: When TV dramas and movies are written, the bad guys need to have serious flaws. Viewers rationalize: “I may not have much money, but my life isn’t in turmoil.” In real life, the rich are filing taxes with the government looking over their shoulder. They have regulators scrutinizing their business. As business people and professionals, they are used to identifying and managing risk, not seeing how much they can get away with without getting caught.
3. The rich have the morals of alley cats. OK, so you are a fan of reality TV. Maybe you watch one of the “Real Housewives” series on Bravo. It appears they don’t take their marital vows seriously. They have affairs.
Why it’s a myth: Often, the success achieved by a professional, executive or business owner is due in large part to a supportive spouse. This might involve business entertaining, child care or managing the family finances. In “The Millionaire Next Door,” Tom Stanley points out that many successful business owners stay married to the same person. As an advisor, you want to know both parties.
4. The rich don’t make new friends. We think they have a cabal. They belong to their private clubs or secret societies. They do deals among themselves. They collude. It’s a closed shop. They aren’t letting anyone in.
Why it’s a myth: They get new neighbors. New business owners join the chamber. They volunteer on committees. They join charitable boards. They are making new friends all the time.