The affluent client is popular prey for advisors seeking to build a profitable book of business. Rich people can be demanding customers, however. Wooing and keeping these clients is a time-consuming, labour-intensive process.

It's important to make sure you're up to the task in terms of your qualifications, knowledge and strategy or you may find the upper crust isn't for you.
Wealthy people are a growing market. Taddingstone Consulting Group Inc. estimates there about 350,000 people with more than $1-million in investment assets in Canada. A report by Cap Gemini Ernst & Young predicts that by 2010 the number could surge to 900,000 people wielding $4.2-trillion in financial assets.

The number of advisors chasing this market is also growing every year, says Taddington consultant Keith Sjogren, and the competition is fierce. He says the rich gravitate to a select group of advisors who "swim alongside" them.

Full-service brokers corner the biggest share of the affluent market, and investment counsellors and the big banks' private banking arms are also embracing well-heeled customers. It can take years to cultivate these clients, and often they must be lured away from someone else.

"Advising the wealthy can't be a hobby, it must be a core activity," says Mr. Sjogren. "One of the biggest mistakes advisors make is that they don't understand how complex the high net worth business is. If you've been working on Chevrolets you need to acquire special skills to fix Rolls Royces."

For a wealthy client to even consider giving you their business, both you and your office premises have to exude a tasteful air of sophistication and respectability, says Kurt Rosentreter, a CA and certified financial planner at Berkshire Securities Inc. in Toronto.

"How you dress and present yourself is crucially important in winning the trust and confidence of this crowd," says Mr. Rosentreter. "If your office is in a strip mall, you dress casually and you drive a Civic you haven't got a hope."

He praises the power of personal favours. Showing that you're willing to go out of your way to personally drop off a document, bring an elderly client to a meeting in your car or return a phone call after hours can earn points with privileged people who place a high priority on service and want their wealth to be properly tended.

Thane Stenner, first vice-president of The Stenner Group of CIBC Wood Gundy in Vancouver, holds an exclusive quarterly "wealth management summit" as a way to prospect clients.

Surveys of millionaire attendees have revealed some interesting findings. Criticisms from respondents unhappy with their advisor included statements that their advisor was not independent enough, made errors, didn't meet projected time lines, was driven by commissions, and provided "total bull" as an explanation for losses.

The most common complaints were lack of contact, bad advice and poor investment returns. Many clients met with their advisor once a year but almost all wanted to meet more frequently, and also to be contacted by email, phone or letter at least monthly.

Those who were happy with their advisors cited trust and honesty as important factors. Advisors were praised for protecting wealth in a bear market, facilitating retirement and cultivating a long-term relationship. Popular traits were "reliable, reputable and competent."

Of 237 people who have responded to the T. Stenner Group's Millionaires Surveys, 76% are married, 76% are male, and the biggest age group is 40-to-55 years old, followed by 56-to-65.

Most wealthy people got that way by owning a business. Many baby-boomers also stand to become rich through inheritances. Advisors hoping to meet the needs of the affluent must be able to offer expertise on such issues as private foundations, personal and family trusts, holding companies, business succession and estate strategies, and offshore investing. Charitable giving is also a priority of many wealthy people. Everything is integrated with tax planning.

While you don't have to be an expert in every area, you need be able to provide access or referrals to qualified professionals such as accountants and lawyers who either work within your group or are willing to establish a relationship. Often these people can act as "centers of influence," and reciprocate when their own clients need financial planning assistance.

Advisors to the rich must offer the full gamut of financial products, going well beyond deferred load mutual funds that may suit the mass market. Affluent clients are candidates for hedge funds, flow-through shares, private placements, income trusts, F-class funds, and principal protected notes.
"At a bare minimum, advisors need a securities licence that enables them to sell individual stocks and bonds as well as mutual funds," says Dan Richards, president of consultancy firm Strategic Imperatives Ltd. "Some folks have additional certifications, such as investment counsellor or chartered accountant. It can be helpful if you're also qualified to sell insurance."

Once you move into the rarefied realm of the wealthy, be prepared to have fewer clients and invest more time in them. If you're spending hours untangling a financial rat's nest, or giving advice on estate and tax planning issues rather than selling product, it may make sense to move from a commission-based approach to charging a fee based on a percentage of assets.