Engaging HNW clients in their own financial rescue

If we assume nothing has changed for financial advisors and their clients in the past few years, we’ll all be disappointed. The world of finance is evolving rapidly, and high-net-worth (HNW) clients are not looking for the best salespeople. They want something more.

This change is influenced by clients’ unique experiences, including the disruptions caused by the last few years. We survived, and now it’s time to thrive because clients are starting to understand that their family really is their biggest asset. If your family is not fine, all of your other assets lose value.

Go beyond traditional planning

Clients are seeking the right advice for themselves and their families. They are looking for advisors who go beyond traditional financial planning and can offer asset structuring and sophisticated strategies, which is what I do for HNW clients and family businesses.

As a result, I get at least two to three recommendations a day. This means I don’t make cold calls or seek referrals. Instead, I find clients mainly through recommendations from existing clients and strategically chosen centers of influence. I teach them how to position what I do for clients through role-playing.

Here’s an example of what I offer clients:

Recently, I met a gentleman who’s about 69 years old and owns a massive supermarket chain in my home country. He has two sons, neither of whom is yet suitable to take over the business.

Global statistics show that 95% of businesses close when the founder leaves and only 5% make it past the third generation. I asked my client if he wanted to be in the 95% or the 5%. He chose wisely and opted to be among the 5%.

We put an inheritance and succession strategy in place using asset structuring and insurance that will do two things:

1: Regardless of what his sons do, if they are not able to run the business after they inherit it, they will have the option to hire a CEO to run the business.

 2: To crystallize the business value, we put gap insurance in place to enhance the value of the estate, beat inflation and give them time to appoint the right successor. This will preserve the value for the sons and protect it from the inheritance tax of 25% that will be enforced when the father passes away. This insurance also doubles as a growth fund for the business. It works just like a shock absorber in a car. The nicer the car, the nicer the shock absorbers.

And here is the best part: The government incentivizes this sort of behavior as a tax-planning strategy.

Providing this type of advice ensures my clients are my biggest advocates. Nothing beats word-of-mouth advertising. Insurance can be used in such exciting and creative ways, and that makes me stand out from other advisors. And I keep getting more ideas and encouragement for this by being part of a mentoring group run by Sanjay Tolani, Ph.D., MBA, a 22-year MDRT member and Top of the Table member from Dubai, UAE.

Clients having money at the right time

I believe my clients participate in their own rescue, which is not just about making money. It’s about making sure that money is there at the right time, in the right amounts and developing a system to create a liquidity structure that never runs dry.

Together, we collaborate to make this a reality. That’s my job, and I enjoy making those discoveries with my clients.

Marlon De Leon, of Port of Spain, Trinidad and Tobago, is a nine-year MDRT member. He’s also a Court of the Table member.

For more about working with the high-net-worth:

• Watch “Creating a process and a staff to match the needs of high-net-worth clients” (MDRT member exclusive)
• Read “1 reason why wealthy prospects won’t do business and 5 reasons why they will”
• Listen to “Unique gifts I give high-net-worth clients”