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Discovering Your Elite Clients’ Idiosyncrasies

By Murray Coleman April 7, 2015

Professionals who earn seven-digit incomes — from doctors and lawyers to engineers and business owners — are exactly the type of clients many advisors want to attract. Still, experts warn that winning the trust of elite professionals requires understanding what makes them tick.

“You’re not going to show up at the country club and have people knocking on your door the next day,” says Nathan Twining, an advisor at Financial Plan, Inc. in Bellingham, Wash., that manages $240 million. “You’ve got to take the time and make the effort to show you care about their profession and understand the rigors of their trade.”

To get a sense of successful clients’ attitudes toward their professions and toward money in general, Twining looks for common traits that surface in specific fields. For example, one client who’s an engineer gave Twining a series of spreadsheets projecting his household’s cash flow over the next 30 years. Listed expenses included everything from taxes and visits to the dentist to housing, transportation, utilities and even clothing.

“Engineers can get so fixated on minor details,” says Twining, “that it’s easy for them to miss even the most fundamental of planning concepts.” He steered the conversation away from the minutiae and toward the client’s idea of using IRA contributions to defer taxes. As it turned out, his income was too high to permit regular contributions — and the higher tax-bill projections threw the client’s cash-flow forecasts out of whack. That allowed Twining to open up the dialogue to broader issues, such as proper asset allocation and estate-planning needs.

Nathan Twining

Physicians, by contrast, enjoy talking about the big picture, says Peter Hoglund, an advisor at AEPG Wealth Strategies in Warren, N.J., which manages $850 million. They like to have several alternatives to choose from before deciding on a course of action, and they want to hear the pros and cons of each one. “Most physicians come to us feeling a little overwhelmed,” says Hoglund. “They just don’t have enough time to devote to coming up with a more sophisticated plan.”

He often hears doctors say they don’t need to save any money, because they don’t plan to retire. “Physicians aren’t opposed to making hard choices and redefining their goals,” Hoglund says. “But you’ve got to be willing to tell them, ‘No, this idea isn’t smart,’ and be ready to back it up with a better idea.”

Lawyers also like tackling big-picture issues, says Douglas Boneparth, vice president at New York-based Life and Wealth Planning, which manages more than $170 million. And because of their highly entrepreneurial and competitive field, he finds, they often respond best when financial advice is tied to long-range career aspirations.

With ambitious younger attorneys, he’ll suggest they start planning early for the big down payment they will have to make if they become equity partners in their firms — for example, by beefing up cash reserves. Meanwhile, lawyers who’ve already made partner often ask about the feasibility of moving into a less stressful position or to a smaller firm. “Everyone’s professional ambitions change over time,” says Boneparth. “Figuring out how different career choices might affect someone’s financial future makes the whole planning process that much more real and complete for lawyers.”

Double-Duty Planning

Financial Plan’s Twining finds small-business owners are often among his most decisive clients. But they also tend to tackle two goals at once. “They like to hear strategies to protect the company’s assets and build their personal retirement savings at the same time,” he says.

With new entrepreneur clients, Twining does a close inspection of insurance coverage, checks what types of investments are held in which types of accounts, and makes sure they’re taking advantage of trusts to minimize estate taxes when possible. “It’s important to show empathy for their entire financial situation, both on a business and personal level,” he says. “If you can make sound recommendations touching on both themes [business and retirement], we find business owners are likely to make decisions right away and leave you to execute the details.”