Some advisors crave the spotlight that comes with having a stable of wealthy, powerful and famous A-list clients. Others such as certified financial planner Nancy L. Jones are content to toil in relative anonymity, serving everyday folks of more modest means.
And that's fine by Jones, principal at NLJones Inc. in Rancho Cucamonga, Calif., because working primarily with middle-income senior clients provides plenty of opportunity to make a comfortable living while putting one's expertise to work on behalf of people who can really use it. Though advisors who target clients from the middle-income bracket over people from the high-net-worth category aren't as likely to land six-figure account-management fees or product commissions, nor referrals to movie stars, pro athletes or anyone else from the financial stratosphere, their efforts to serve that segment can be fulfilling both emotionally and financially.
"These are people who may be living somewhat frugally, but who may have fairly sizable pensions, 401(k)s or inherited wealth," says Jones. "Some of those middle-income people have a lot of money. And once you get to know them, you find they're more affluent than their lifestyle might indicate."
Evidently the word is out, as more advisors appear bent on tapping the middle-income market. "I think the competition [in that segment] is growing," says Susan O'Grady, principal at EQUIPOISE Wealth Management in Denver, "in part because it has been an untapped area" for financial advisors and planners.
Given the growing appeal of middle-income senior clients and the intensifying competition to reach them, the biggest challenge for an advisor who covets that type of client is marketing and making a name for oneself. Planners such as Jones and O'Grady who have long made a living in that space agree that conventional marketing tools – print advertising, bulk mailings, sales-oriented free lunch seminars and the like – clearly lack the impact of subtler, less traditional, more relationship-oriented methods of promoting a practice in the middle-income demographic.
Trust, reputation and results
Among all the demographic groups for an advisor to target, the middle-income senior bracket is the one that most needs the help of a good financial planner, contends Fran Twiddy, who founded her own advisory practice, Frances E. Twiddy Associates in St. Claire Shores, Mich., in 1983.
"They aren't always the most sophisticated investors," she says, "and in an increasingly complex market, they need guidance navigating the financial planning waters so they can keep up with inflation and not lose that nest egg."
Like O'Grady and Jones, Twiddy eschews conventional marketing methods; no newspaper ads or radio spots; no purchasing prospect lists for cold-calling or direct mail; no sales seminars. For them, building and sustaining a robust client base consisting mainly of middle-income individuals and families is all about relationship-building, be it through outreach to affinity groups, circulating in the community, taking on the role of educator or capitalizing on media opportunities when they present themselves.
The overriding goal with all these efforts is to build trust and to position oneself as an experienced, unbiased financial planning expert. Because they are frequently exposed to the seedy underbelly of the financial services industry – namely the sell-at-any-cost seminar circuit – middle-income seniors in general are turned off if they sense an advisor is merely trying to peddle product, even when it's something a person truly needs, says Twiddy. That's why advisors who set aside their sales inclinations tend to set themselves apart and thrive in the middle-income segment. "If it's clear you're working only with your clients' best interests in mind, without any regard to how you're going to be compensated, the money follows. And it's going to come to you in baskets."
Basically middle-income seniors want to put their finances and their futures in the hands of someone they consider to be "one of their own," says Jones. "What I've found is they don't want to work with the high-powered brokers and salespeople."
That's not to say seniors of modest means care little about outcome. They want an advisor who delivers strong results to go with high ethical standards, she adds. "I don't think the competition [among advisors targeting the middle-income bracket] is that tough if you understand your market, you're dedicated and you're very good at what you do."
Trickledown
The most direct route to the middle-income segment is through community activities and interactions with affinity groups, O'Grady and Twiddy concur. Twiddy speaks annually to a senior investor group, for example, while O'Grady holds pro bono financial education programs at churches, investment clubs and the like.
