Advisors are often taught that the key to success lies in the pursuit high net-worth clients. A number of advisors, however, run profitable practices serving the needs of middle-income families.
“Some people really love dealing with the middle market because they can relate [to these clients],” says April-Lynn Levitt, a Calgary-based coach with the Personal Coach.
Clients in this income bracket often believe they don’t have enough money to invest, says Rosemary Smyth, business coach and owner of Rosemary Smyth and Associates in Victoria. This perception makes them an underserved market that offers wide prospecting opportunities.
The following will help you build a healthy and profitable business serving middle-income families:
> Focus on time-management
A sustainable middle-income book requires a large number of clients, so make sure you are well-organized.
Take advantage of technology and your contact management system to leverage your time, says Levitt. Send out group emails to stay in touch with clients. As well, if you have an assistant, have him or her contact clients while you focus on prospecting.
> Educate your clients
Teach your middle-income clients about their financial planning options and other financial issues.
“Consider yourself an educator,” says Smyth. “Take the time so that you can walk your clients through the financial choices they can make based on their situation.”
You can do this during private meetings or in a group setting, such as a seminar. When it comes to time management, seminars are an efficient educational tool because they enable you to reach out to several clients at once, says Levitt.
> Suggest resources
Talk to clients about the educational materials that are available and ask what they would like to receive.
Suggest books, websites or software that clients can use to learn more about such financial matters as debt management, saving and retirement planning, Smyth says.
> Choose “low maintenance” products
Handling a number of portfolios with a wide variety of products can be difficult and time-consuming. To make your practice more efficient, consider investment products that are simple and easy to manage. Choose products such as mutual funds that would appeal to a large number of middle-income clients.
Many middle-income clients have similar financial needs, making it easy to streamline portfolios into asset-allocation models that are easier to manage, Levitt says.
Using simple managed products will allow you to focus on other business activities, such as client communication and prospecting.
> Involve whole families>
Encourage clients to include their parents or children in their financial planning. Doing so will help expand your client base and prevent duplication in planning, says Smyth. For example, you need to know if a grandparent has set up an registered education savings plan or a tax-free savings account for a grandchild so you can avoid over-contribution
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