Rod BertinoWhile the number of high net worth (HNW)
individuals in Australia decreased by almost 25 per cent in the 12 months to
December 31, 2008, these wealthy Australians continue to be actively courted by
an increasing number of advisory businesses. And, while we have found that the
definition of “high net worth” varies significantly from firm to firm, there is
no doubt competition in this relatively small segment of the market remains

However, as seductive as large investable assets and high incomes are,
and regardless of what you call these clients (“high net worth” versus “mass affluent”
versus “emerging upper middle income professionals”) or how you may classify
them, if you currently target this market or are considering moving into this
space, the following may be of real interest to you.

A recent analysis of the
40,000 plus Australian clients that have participated in the Business Health
CATScan Client Satisfaction Survey clearly indicates that to date, many
advisers have struggled to completely satisfy their higher income earners. Those
clients with household income in excess of $75,000 per annum are less satisfied
with their adviser’s performance across all nine of the key service delivery

While we are not suggesting that an annual household income of
$75,000-plus should be the universal breakpoint for HNW, it is also worth noting
that in the average Australian practice, less than one in three clients
currently fall into this salary band. So what is contributing to these results?

Of course it is always dangerous to generalise, and each business is unique,
and hence the challenges and solutions will vary between practices; in general,
though, five key themes emerged from the analysis of the higher income earners
in our CATScan data warehouse.

1. Understand and carefully manage
service expectations

 Higher income earners generally
have much higher service delivery expectations. They tend to measure and
benchmark the service they receive from their advisory practice, not
necessarily against other companies in the financial services arena, but rather,
against global best practice, regardless of the specific industry.

specialising in this market must take a very active role in setting and
managing their clients’ expectations. If this is not done effectively (and
continually reinforced after every meaningful client contact), advisers may
find themselves faced with completely impractical or unrealistic hurdles to
meet. Left to their own devices, high net worth clients can expect the world
and want it delivered yesterday!

2. Broaden your solution suite

 Clients with higher incomes or net
worth can have a broad range of complex needs that require specialist advice
across a number of different areas. This often calls for expertise that extends
well past the traditional product offerings of many practices.

Consider if your
practice has the skills and knowledge to add real value to these clients. If it
doesn’t, either start investing in increasing the capabilities of your team or,
develop a strong and trusted alliance/referral network with other associated professional
service providers.

Consider your profile

Is your firm widely
acknowledged as one of the premier suppliers of financial advice to successful members
of your local community? If not, you may be at a distinct disadvantage when it
comes to attracting new, higher income clients. As you move up the income
scale, your firm’s reputation and positioning, along with your own personal
profile, become increasingly important.

Also consider the location and the look
and feel of your premises – are they in keeping with those of the other professionals
your target market may also be using? Does your firm offer a rich,
transactional website capable of standing up to a thorough and discerning due
diligence process?

4. Surround yourself with a great

While all clients (regardless of their salary or investable funds)
truly do value the relationship they have with their key adviser, higher income
earners expect the same level of excellence and professionalism from everyone
involved in managing their financial affairs. Do all your staff excel at what
they do and do they project the image your best clients expect?

Become referrable

In keeping with most “linked”
communities, endorsements and testimonials from respected friends, family or
colleagues are incredibly important when dealing with higher income earners. Ensure
that your most valuable clients understand and appreciate that you value
referrals and continually create opportunities to explore how you may be able
to help others within their social network


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