Lockshin: What Wealthy Clients Want From Advisors

Steve Lockshin shares insights into recruiting and retaining high-net-worth clients.

Most financial advisors are in constant pursuit of wealthy clients, but they might not fully understand what it takes to land and keep high-net-worth clients.

With that in mind, etf.com spoke with an advisor who specializes in working with wealthy families and individuals.

Steve Lockshin is a principal of Los Angeles-based AdvicePeriod, a Mariner Wealth Advisors company, and a co-founder of Vanilla, the estate advisory platform.

Jeff Benjamin: How do you gain access to high-net-worth prospects?

Steve Lockshin: It's hard to break in. I would become an expert at something ultra-high-net-worth people need and want. Aviation, estate planning, family wealth dynamics or something that will gain you entry. After 30 years in the business, almost all of our new clients come from referrals. However, those referrals are the result of establishing ourselves as experts in the estate planning arena, and referrals often come from other clients who know somebody who is either unhappy in an existing relationship or about to have a liquidity event.

JB: How do you pitch a high-net-worth prospect?

SL: We don’t lead with investments. We feel that investment management is very commoditized and nobody really has any secret sauce. We lead with a holistic planning and service experience.

Show them how you will use estate planning and quarterback their tax and legal team to protect their wealth. Estate planning for the wealthy can have an immediate 40% impact with no impact to portfolio risk and that’s just in year one.

JB: What should you avoid doing and saying when pitching a high-net-worth client?

SL: Avoid saying yes to everything. I’m in the service industry so it's tempting to say yes to all my clients’ requests. I’m not an expert on everything. Instead, I focus on trying to find the right expert to help.

JB: What’s the biggest challenge when working with high-net-worth clients?

SL: Selecting the clients that fit. There is chocolate and vanilla for a reason. Not every client is right for us, and we are not right for every client. Knowing when to say no can save everyone a lot of time and effort.

JB: How do you structure fees with wealthy clients and families?

SL: I’ve found it's better to go with a flat fee to reduce any conflicts of interest as much as possible. My clients will have wealth in private companies and real-estate, so it's easier to offer a comprehensive offering by charging a flat rate with different rates for different services.