'Running with the big dogs' when attracting clients can be pricey, but there are ways to fit in without breaking the bank
“If you have to ask how much they cost, you can’t afford one.” You remember JP Morgan’s answer when someone asked what his yacht cost. Clients and advisors often find themselves in a dangerous situation. They’ve gotten into the right social circles. They met people and made friends. But staying in the circle and “running with the big dogs” may be far more expensive than they imagined. Is it possible to win the game?
What not to do
We will discuss several points to guide advisors in their own lifestyle and equip them to advise clients finding themselves in the same position. But let’s start with how to avoid the Big Mistake. Rich friend Fred is an art collector, forever talking about what he bought at auction. Rich friend Barbara is a wine collector, opening spectacular bottles at dinner parties. Rich friend Chris loves exotic cars, always seen emerging from those gull wing car doors at charity events.
The client of advisor who wants to fit in thinks the path is pretty obvious. They need to start collecting serious art, build and stock a wine cellar and watch back episodes of “Top Gear” to determine if a Lambo or a Ferrari gets them better bragging rights. It’s the express lane to the poor house. They either liquidate assets to “buy the playing pieces” or run up breathtaking levels of debt. You can’t wine.
How to Keep Up with the Joneses
Here’s an obvious fact the client or advisor is missing. It sounds like a math puzzle. Fred buys art, but not wine or sports cars. Barbara buys wine, neither art or sports cars. Chris loves his sports car, couldn’t care less about wine and drinks beer. The client or advisor thinks you need to do everything. In life you can do a few things very well or many things badly.
1, Pick a specialist subject. Ever watch the BBC program Mastermind? Contestants might need to answer general knowledge questions, but they get a specialist subject. Pick a passion you love. It’s your specialty. Fred has his art, Barbara her wine and Chris his car, but you have your antique silver collection. Maybe you collect watches. You become an expert. Your reputation precedes you. Friends say: “Thinking about buying a watch? I’d talk to (you) because they are an expert.”
2, Dining out. Rich people eat out a lot. They split checks. You might think they don’t, but it’s an unwritten code. Put another way, if someone buys you a nice meal, there’s an unspoken contract they owe you something. You might pick up the next check, but that requires a good memory. Just expect to split the bill. Don’t quibble over who had what.
3, Hosting dinners. It’s been said the grander the kitchen, the less likely it’s used. Rich people dine out a lot. Some entertain at home. Yet you might find yourself one of two positions. You need to host a dinner out or entertain at home. Have three or four favourite restaurants where they know you, it’s pretty classy and the prices are reasonable. It’s where you bring people. Some will become their new favourites. Others entertain at home. It controls costs. You might despair you don’t have the china, crystal, flatware and linens. You can buy all this stuff cheap at your local auction house or yard sales. It’s been said millennials don’t want to inherit the stuff. Good news for you.
4, Vacations. The wealthy travel often. They talk about it. Listen admiringly and ask questions. When you travel, you can get some great deals if you shop around or travel off season. You might luck out and get a few upgrades too. Before long, your experiences will be as good as theirs.
5, Charity galas. These events are similar to trade shows for industry professionals, except the money raised supports a worthy cause. hey are places to see and be seen. Attend a few in the summer and the fall. Dress well. If you are lucky, you’ll make the local newspaper.
6, Talking about money. People with money are comfortable with it. They don’t need to brag. They rarely talk about what something costs, except when they got a good deal.
7, Dress well. Generally speaking, the wealthy are “Well put together”. They see each other in restaurants, table hop and say hello. Dress well even when grocery shopping. I attended a lecture by a fashion magazine editor who said; “Dress as if you are going to run into your high school rival.” He continued his point: “If you don’t, when they see their friends they will say: “You’ll never guess who I saw! She looks terrible!”
8, Treat everyone with respect. Insecure people feel a need to establish a pecking order. They are rude to restaurant staff and shop assistants. Generally speaking, wealthy people are polite to everyone, treating them as equals. It builds good will, but it also announces you are comfortable in your own skin.
Whether it’s the client or the advisor, once you know these and other techniques, it’s easy to feel comfortable running with the big dogs.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor” can be found on Amazon.