Many IFAs feel gaining confidence of wealthy clients is the biggest challenge for them. A major reason for this fear is numerous stereotypes associated with HNIs and UHNIs.
In fact, most of the stereotypes associated with the world's ultra-high-net-worth (UHNW) population are just plain wrong, says research house Wealth X Institute.
Here are five myths associated with wealthy clients, which you would do well to ignore in dealing with them.
- HNIs are out of the ordinary
Not all HNIs are inheritors. Broadly, there are four categories of HNIs – CXOs, professionals, inheritors and entrepreneurs. Each of them has different needs, goals and lifestyle.
Hence, most of HNIs are self-made and come from some form of middle-class background, they are not obnoxiously rich kids. Whether they have $1 million or $20 million, they do not think of themselves as affluent. They have middle class humble values embedded in their subconscious, just like you and me.
- Marketing works the same amongst all wealth groups
This myth is one of the reasons so many advisors struggle marketing their services to most HNI’s. These investors are more educated, highly sceptical, do not trust advertising claims, and do not like sales people.
They have their guard up for anything that seems like marketing or sales. Word-of-mouth reference, reputation, and personal introductions are key to affluent marketing.
- HNIs don’t want all their eggs in one basket
These wealthy investors want a “go-to” financial advisor they trust to manage every aspect of their family’s financial affairs. They do not expect their advisor to be an expert in all areas; instead, they would recommend advisors to bring in qualified experts when necessary.
- Investment performance is everything
Meeting investment performance expectations is important, but it is one of the 14 statistically significant criteria they rate important, according to a research survey. The key to investment performance with HNIs is in managing expectations.
- Social media is for millennials
Tell that to a 60-year old grandmother who is sharing pictures of her grandson with her financial advisor on Facebook. In fact, today’s affluent of all ages are becoming increasingly more comfortable interfacing with social media sites.
