CEB Blogs


Wealth Management

How to Convert Overlooked Prospects to New Clients

Many high-net-worth individuals without an advisor are open to trying one in the future; the trick is to understand what kind of investor they see themselves as

Those in charge of wealth management firms or the wealth management business in a conglomerate have focused on attracting new clients in recent years, especially more youthful ones. But a lot of it has been unsuccessful and new client acquisition rates have continued to decline, resulting in even greater margin pressure on the wealth management industry.

As they compete for one another’s existing clients, many firms overlook the substantial opportunity for growth posed by high-net-worth individuals (HNWIs) – those with financial assets worth more than $1 million, excluding their primary residence – who are not currently working with an advisor but are open to doing so in the future. This accounts for a hefty 25% of the total HNWI population (see chart 1).

Firms often struggle to distinguish between prospective clients with a high potential for buying services and those far less likely to do so, and so understanding the financial preferences and motivations of prospective “self-directed” investors is a key first step to establishing new relationships.

Chart 1: Open to persuasion  Source: CEB analysis

Segmenting the Self-Directed Market

Though unadvised high-net-worth investors tend to exhibit greater confidence in their own ability to meet their financial goals (rather than the ability of financial institutions to help them), there are key differences in their financial attitudes and priorities.

In fact, there are four primary behavioral profiles of self-directed investors, each with distinct characteristics and financial preferences, according to CEB analysis.

  1. The wealth protector: Express confidence in their financial knowledge and prioritize the preservation of existing wealth.

  2. The advice skeptic: Show less confidence in their financial knowledge and maintain a lower threshold for risk and exposure to market volatility.

  3. The confident investor: Seek to use their financial knowledge to meet financial goals and grow wealth.

  4. The distracted professional: Focus less on savings and investments than on enjoying life today.


More On…

Leave a Reply



Recommended For You

Wealth Management: How High-Net-Worth Individuals View Robo Advice

They are not put off as much as wealth managers might expect, especially wealthier clients....