We’ve all done it. We make assumptions based on our life and career experiences. As an advisor, you have likely developed a strong gut sense of your customer base and market. Your instincts may have led you to make some good choices, maybe even saving time in the process.
But what about the prospects you didn’t attract or the valued clients you lost? Could it have been because you made the wrong call in a rush to form an opinion? People may seem easy to size up, but they can often surprise you. In a people-oriented industry like financial advising, presuppositions about what people want (or don’t want) can wreak havoc on your bottom line.
Forgo Assumptions and Use Information to Engage
Like any client segment, high-net-worth (HNW) breadwinners do not like to be taken for granted. Nor do they want an advisor who wastes their time with solutions to problems they don’t have. Yet, despite being a key target for many financial advisors, there has been little research on this market segment and how to engage them.
FlexShares ETFs commissioned an extensive study of more than 460 high-net-worth primary earning men and women across the U.S. Participants had a household income of over $200,000 and liquid assets of at least $1 million (excluding retirement and primary dwelling, lowered to $250,000 for ages 35 to 39).
We set out to learn about their financial acumen, risk confidence, investment preference and lifestyle goals. Our survey revealed insights on what male and female primary breadwinners expect from their advisors.
Let Go of Stereotypes for Better Conversations
The research revealed some tenacious stereotypes that may not apply to this group of high earners.
1. Appetite for risk. One of the most enduring stereotypes in the financial advising industry is that women are afraid of risk and men are more aggressive investors. The study revealed that men were more than twice as likely as women (31% vs. 14%) to identify as conservative investors. Furthermore, it was almost an equal split of men (27%) and women (26%) that identified as either moderately aggressive or aggressive investors.