Sometimes clients acquire wealth very quickly. Often it comes from inheritance, gifts, company stock options or lottery winnings. As advisors, when these events occur, we need to let clients know we are familiar with the new issues they now face. Most of my clients who have acquired sudden wealth have come to it though stock options granted by their employer or from inheritance. Regardless of the source, though, the problems are similar. Advisors can provide a wealth of information, knowledge and solutions to the new issues clients will face.
I have been blessed to work in the Washington, D.C. area. There are numerous high-tech companies who have their headquarters or branch offices less than an hour drive from my office. It’s not surprising that I have developed some “techie” employees at these companies as clients.
Typically, they are computer engineers who have worked for their employer for four or five years. About 35 years old, they make around $75,000 per year. Oh yes, they also have stock options worth $2 to $4 million dollars (that’s net after exercise.) I’d also have to admit they are not necessarily my typical clients. My diverse clientele ranges from a retired fire chief to a former Fortune 500 company president.
As a result of working with these and other wealthy clients, I developed a one page chart titled, “Issues of Sudden Wealth.” I use it during the initial interview to build credibility and illustrate that I am familiar with the issues they are facing and am experienced at solving their problems. Using the chart, I simply describe each of the issues, outline the strategies they will need to consider and review their implementation options. In discussing these issues, the chart also helps me discover the client’s concerns, goals and objectives.
Finally, I get to the column titled, “What Can We Offer.” This gives me the opportunity to review all of the reasons they should consider in selecting me as their advisor. I emphasize values such as judgment, service, accountability and a face-to-face relationship with an experienced financial advisor. I have had great success building credibility using this chart and hope that you will be able to use it in your practice as well. Of course, modify it to fit your situation. And, please share with me any ideas your have for improving it.
James P. Ruth, CFP, is a registered representative and president of Potomac Financial Group, a financial advisory practice in Gaithersburg, Md. He is a former Maryland state NAIFA president. He can be reached by phone at 301-948-3900 or by email at firstname.lastname@example.org.