RGR_PRACTICE MANAGEMENT _ Penton Media August 20, 2009 If you want to view this on the web go to: http://enews.penton.com/enews/registeredrep/v/738 FEATURE STORY --Who do the Affluent Want? by Matt Oechsli San Diego: "Is your research showing that the affluent are looking for something different in a financial advisor due to the financial crisis?" asked James as he was picking up his registration packet for our Rainmaker Weekend. It's a great question and I told James that he was about to become immersed in understanding today's affluent and what elite advisors are doing to both attract them and earn their loyalty. But for the purposes of this issue of Practice Management, I will begin my answer with a summary statement: The affluent are looking for someone who can be a solutions provider, overseeing the many dimensions of their family's financial affairs. (http://oechsli.com/rainmaker/) For more than 10 years, The Oechsli Institute has studied the world of the affluent (the top quintile of U.S. income earners), conducting research in an effort to better understand them. Most recently, we commissioned an independent study ("Understanding the Affluent: America's Top Quintile Income Earners") to identify who the affluent trust and what their key motivators are. Thanks to this ongoing research, we've learned a great deal about what makes the affluent tick. What the Affluent Want According to The Oechsli Institute's study, "Understanding the Affluent: America's Top Quintile Income Earners," affluent investors want and need a financial advisor with depth of knowledge, who is capable of providing financial advice and guidance for their family during these challenging times. They are desperately searching for a trusted financial advisor or team of advisors to coordinate every aspect of their family's financial affairs. They need someone who is unbiased, professional and always considers their best interests when making decisions. But most do NOT know where to find these individuals or teams of individuals. However, many affluent investors who have a relationship with a financial professional are displaying significant dissatisfaction with these relationships. Which brings us to an important question: do your affluent clients perceive you as a stockbroker or as their financial advisor? Let's hope it's the latter because, as our research reveals, there is a major opportunity for financial teams to demonstrate that they understand the reasons for the dissatisfaction and will correct the problems! If you want to significantly increase your odds of becoming the "go-to" financial advisor or team for affluent investors, here are a handful of statistically significant criteria to consider. They were culled from our latest affluent research projects: Focused on overseeing my family's financial health, not marketing your practice. *Clearly reveal your fee structure. *Proactively contact clients when anything might impact their portfolio. *Making certain that investment performance meets expectations. *Avoid using technical jargon. *Coordinate all of the client's investment decisions. *Create and execute a formal financial plan. *Help to coordinate and organize all of the client's financial documents. Now, let's combine the above data with data gathered from another Oechsli Institute study, called "How the Affluent Make Purchasing Decisions" (yes we commission a lot of studies). This revealed 7 qualities associated with how the affluent make major purchase decisions, which were (again) ranked in terms of importance. Although these stats apply to any major purchase decision--from flat-screen TV's and luxury cars to general contractors and financial planners--they are particularly applicable to financial advisors: 1) Two criteria stood above the rest: 83 percent said that offering the right set of features was very important; 76 percent said that being able to find the best possible option through careful evaluation and comparison was very important. 2) 66 percent said that the opinions of immediate family members and trusted friends had a very significant impact on deciding where to look for options when making a major purchase decision, but only 38 percent said those opinions had a very significant impact on the final purchase decision. 3) Once the search process is underway, the affluent place more confidence in their own ability to find information, sort through options, and make the final decision. Respondents also indicated that the Internet and trusted periodicals serve as major research vehicles. 4) When given an opportunity to write in other criteria important to making major purchase decisions, warranties and guarantees won by a wide margin. 5) Even though respondents were extremely price/value conscious, finding a discounted or sale price was not as critical to their final decision. 6) Problem resolution and post-purchase service rated as having the greatest impact on repeat business. Offering the lowest price ranked last. 7) Respondents gave far less importance to reviews and testimonials than they did to the responsiveness of sales and service people. Please make a major mental note of the second quality: the affluent rely on family members and trusted friends when making major purchase decisions. What this means is that financial teams must be "the real deal" before they can hope to win referrals from coveted clients--the affluent individuals and families who put the "wealth" into "wealth management." As our rainmakers are quick to learn, the two top qualities impacting an affluent prospect's decision in selecting a financial advisor are; 1) reputation of the individual (word-of-mouth influence) and 2) first impression of professionalism and competence. The affluent want the real deal. Couple this level of professionalism with rainmaking skills and you'll have very little competition. If you want to learn even more about the attributes of elite financial teams, download our latest 2009 Teams Research Report (http://www.oechsli.com/rainmaker/interviews.asp?id=58) or read the introduction to Matt Oechsli's latest book to be released August 27th Elite Financial Teams: The 17% Solution. (http://www.oechsli.com/rainmaker/interviews.asp?id=58) Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one. If you have any topic suggestions or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at rich.santos@penton.com (mailto:rich.santos@penton.com). Advertisement ---------------------------------------- As an independent business owner with FiNet, you can have the best of two worlds: control of your own practice and wirehouse-level support and resources you don't want to lose. We have processes in place to make your transition smooth and help you optimize the value of your practice. http://www.whywaitfinet.com/rodeo ---------------------------------------- Most Popular Stories ---------------------------------------- *No Retention Bonuses For Wachovia Reps; Wachovia Securities To Be Renamed (http://registeredrep.com/advisorland/career/wachovia_securities_retention_bonus0220) *Exiting Legally (http://registeredrep.com/sponsor/td_ameritrade/changing-jobs-legally-0409) *Variable Annuities Overhauled, Benefits Shrink, Costs Rise (http://registeredrep.com/newsletters/wealthmanagement/variable_annuities_benefits_shrink_costs_rise) *Equities: Better Than Bonds? What A Lost Decade In Stocks Tells Us (http://registeredrep.com/newsletters/wealthmanagement/equities_bonds_research_bear_lost_decade_0401) *The Jewish Clause: Putting conditions on an inheritance into a will. 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Member FINRA/SIPC ---------------------------------------- ---------------------------------------- The Independent SourceBook from Registered Rep. is the industry's only one-stop source for reps considering the independent channel. It features fact sheets and profiles of independent broker/dealers and RIAs organized to help you understand the independent sector -- and your potential in it. So before you make your next move, click here: http://registeredrep.com/sourcebook/index/index.html?cid=sourcebookad. ---------------------------------------- ABOUT THIS NEWSLETTER You are subscribed to this newsletter as #email# To subscribe to this newsletter go to: http://subscribers.registeredrep.com/?tc=NLSUB To unsubscribe from this newsletter go to: http://subscribers.registeredrep.com/?tc=NLSUB&cid=#message_id#&lid=#list_id#&email=#email# For information on advertising in this newsletter, please contact Rich Santos, Group Publisher at mailto:rich.santos@penton.com. 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