If your dream is to have a thriving practice composed of wealthy clients—a select few high-net-worth individuals that you can focus on and cater to—you may want to rethink it. Mark Kollar, CEPP, of Kollar Financial Strategies, based just outside of Chicago, says that you may be able to grow a bigger, more profitable practice by focusing on blue-collar clients. That’s right: Construction workers, autoworkers and garbage collectors may be your key to success. Kollar has based the lion’s share of his business on helping this underserved market with their retirement needs and has reaped untold benefits both monetarily and personally.
It didn’t start out that way. In his teens, he began his career on the Chicago Board of Trade and spent the next 14 years there making a name for himself. Then, when he opened his own firm, he spent “hundreds of thousands of dollars marketing to the wrong people. ? I was the poster child for going after the affluent.” He devoted his time and money to giving seminars to this target audience, and ended up getting referrals to relatives—often blue-collar workers. He didn’t pay much attention to this stream of referrals. “It was probably four or five years before I woke up,” he admits. “And lo and behold, right in front of me, I had people retiring with a million-plus [dollars] of investable net worth who had just $50,000 to $60,000 of income.”
The nuts and bolts
“One of our joys is working with the blue-collar segment of the population,” he says. But to work with this demographic successfully, you need to first gain a better understanding of how they operate and what they respond to.
They are concept people. A white-collar client—one that has the same net worth as a blue-collar client—loves to have facts and figures so he can “sell himself.” Forget facts and figures with your blue-collar client, says Kollar. He brings up the example of a construction-worker client who has over a million dollars in investable assets and owns two properties. “He’s street smart, not book smart,” he says. “so the facts and figures don’t mean much to him.”
They're testing you; they want to know if they can trust you implicitly.
Instead, blue-collar prospects are generally interested in the bigger picture, which means you may need to educate them, often on many of the basics like stocks, managed accounts, mutual funds, CDs and estate planning. “They are concept people; you're not selling them anything. You have to let them see the picture, and then you go to the next picture, and to the next picture,” he says. “They’re testing you; they want to know if they can trust you implicitly.”
They let you do your job. “They know what they don't know. ? So they don’t bother you; they let you do your job.” says Kollar. He refers again to his construction-worker client, who told Kollar that he might call him once or twice a year, but that he just wanted Kollar to “take care of him.” Kollar says that, in general, his white-collar clients are higher-maintenance, as they often demand more and don’t admit to what they don’t know. These are also typically the clients who have their money and investments spread out among advisors, whereas, once the blue-collar client trusts you, “they throw you the whole ball of wax,” he says.
They are a great source of referrals. It may take you longer to cultivate these clients because of their lack of financial background, but just take your time is Kollar’s advice. “You’ll get them as a client. It may take three or four times longer to do it the right way,” he says. “You can get a client in 20 minutes of filling out paperwork, but that’s not the right thing to do.” Again, it goes back to education. If you take the time to educate them and bring them on as clients, “the next thing you know, you’ll get all their friends as clients as well,” he adds.
Kollar uses client events to generate even more referrals. He organizes fun outings and has his clients invite friends along. Those events may be a golf charity event, a private tour of Wrigley Field or what he has planned this weekend: renting out the top of a touring boat to head out onto Lake Michigan to watch fireworks. There are 55 people attending, 14 of those couples are prospects.
Maggie Leyes is a contributor to AdvisorToday.com.