Quick story: early in my career, sometime in the mid-1990s, I asked Inside Information readers about their most successful marketing initiatives. That was the era of canned seminars; that is, you could buy the slides and script about various financial topics, and the company would help you with the wording of mailed invitations and where to find appropriate mailing lists.
Other advisors were starting to buy an hour a week of radio time, interacting with an audience every Saturday morning. One notable personality on the West Coast (I believe he has been banned from the profession by regulatory authorities) used to have his staff and family call in posing as clients, who would say, on the air, that he was an investment genius.
All of this was pretty standard fare. But of the various messages I received back (by mail, mostly), one stood out. A firm in Atlanta was running small advertisements in local newspapers and magazines telling the world that they provided ‘financial planning for the yachtless.’
This was a catchy way for them to say that they provided services to the ‘little guy,’ the ‘underserved,’ the people who couldn’t get in the door with the fancy investment banks and big name brokerage firms.
The ads resonated with the community. It was, as far as I can tell, the most successful advertising campaign in the profession’s history.
But here’s the interesting part: the people who called the number printed on these ‘yachtless’ advertisements weren’t residents of a local homeless shelter. Many of them were actually, but any reasonable measure, quite wealthy. But they didn’t think of themselves as wealthy.
I interviewed the people at the company, and they told me something that I’ve never forgotten: literally nobody thinks they’re ‘wealthy.’ People with seven or even eight figures to invest considered themselves to be among the pedestrian ‘yachtless’ segment of the population, and were glad to finally find a financial advisory firm that was willing to work with them and their un-yachtless finances.
I think of this all the time when I see the term ‘wealth manager’ used by a growing number of financial planning firms. The implicit message is: ‘we serve the wealthy,’ which happens to be a segment of the population that almost nobody self-identifies with. I would guess that the term has a reverse marketing impact; that is, it turns off many more people than it attracts. (I don’t believe I’m wealthy, therefore this wealth management firm is probably not for me.)
The term is also increasingly misleading. By now, most advisory firms realize that their future growth is down-market, the younger net-yet-wealthy segment of the population who are in far greater need of financial planning advice than someone who has already accumulated a decent-sized retirement portfolio.
Another quick story: an advisor once told me the story of how, 25 years ago, he worked with a schoolteacher right out of college, who got her first job and her first instinct was to buy a nice car. The advisor recommended that she keep driving her current car and put the extra money aside for emergencies, and perhaps also for her eventual retirement. After 25 years of this advice, this schoolteacher had accumulated enough money that she could afford to retire and also donate funds to the school library for (her words) the kind of books that kids actually like to read.
And her teaching peers asked her how she could possibly afford to retire. They were still living hand-to-mouth.
In those early years of my career, I watched financial planners grow their clients into profitability, and I think we’re finally coming back to that again.
A profession that calls itself ‘wealth managers’ is A) restricting itself to a population that doesn’t actually exist, and B) is implicitly telling the most receptive part of the potential client population that they won’t be allowed in the door.
Please seriously consider this a warning in your own self-description and marketing efforts. It may be time to quietly retire the term ‘wealth manager’ before too many people get the wrong idea about the financial planning profession.