Reaching multi-million dollar success as a female financial advisor is all about carving your own path.
That is what four multi-million dollar female financial advisors said at the Women Advisors Forum in Newport Beach, Calif., on Thursday. All four advisors shared lessons they have learned along the way that have helped them reel in millions in client assets and differentiate their practices.
“This is an amazing, fantastic career, and I think these are the glory days of financial advisors,” Christina D’Amore, private wealth manager at D’Amore & Associates said of the great need clients now have for advisors. “We all have a different angle…Find your passion and do it your way.”
Here are some key lessons those advisors shared from building their practices:
Have a Specific Client Niche
“When you specialize and you do it well, you do get a lot more clients,” said Laila Pence, an LPL registered principal at Pence Wealth Management. “In order to be successful in this business, you have to have a niche.”
For all four advisors, that niche came from a variety of sources. Winnie Sun, managing director and co-founder of Sun Group Wealth Partners, said she focuses on clients who work in the news, movie and television industries. Colleen Schon, senior vice president, investments at Raymond James & Associates, works with small business owners, retirees and widows. And D’Amore said hers are “clients who want a relationship.”
Identifying those niches not only helped those advisors define their focus, they said, and also helped their existing clients know who to refer to them.
Focus on Forming a Bond First
Sun said she remembers one of her first big clients very well. She was working at Smith Barney at the time, when a young 28-year-old found her on LinkedIn and subsequently came into her office dressed in shorts and a baseball cap.
In order to feel comfortable working with her, this client wanted to get to know her. That included talking about everything from sushi to drag racing, which Sun said the average advisor might not have taken the time to do.
Respecting what that client wanted led him to open an initial account of $200,000 with Sun, which was not a large sum for the wirehouse she was working with at the time, she recalled. But eight months later, she received a call from that same client. He said the company he was working at had been acquired and that he would need to do some wire transfers: the first one was about $12 million, the second $32 million.
Sun credits putting that client’s needs first with helping to form that client relationship.
Know More than Your Clients
Pence remembered the day one client couple walked into her office. The 74-year-old husband told her that he had been managing his own money for 50 years through a naked put investment strategy. He had made $500,000 in gains that year.
Pence took a look at his statements, and found that there were stocks with a lot of losses in the couple’s portfolio. Pence remembers asking him why he did not sell the stocks, and take the losses against his other gains. After the client chafed at the idea of changing his investment strategy, Pence showed him on paper how those gains and losses translated to paying higher taxes.
The result was that that client moved $7 million in assets to Pence, while he still manages $3 million through his own investment strategy. And now Pence also works with the couple’s son, who recently made $40 million after the company he works for went public.
“Whether it’s taxes or whether it’s estate planning, you should get good at something,” Pence said. “All you need is to get the other person to know that you know more than them. After that, it’s all over.”
Know When to Reject a Prospective Client
Not every referral is going to be a fit for an advisor’s practice, said Schon, whose practice generates a lot of business through referrals.
One of Schon’s good clients referred his sister. But in the first client meeting Schon had with her, she knew it was not going to work out. That prospective client was derogatory and mean to her husband, Schon said.
“I had to call my client that referred them and say, ‘I can’t take your sister. I’m really, really sorry,’” Schon said. “He actually laughed and said, ‘I’m glad to know I’m not the only one who doesn’t get along with her.’”
The experience taught Schon the lesson that it really is okay to turn down a prospective client.
“If they’re a problem at the first meeting, they’re going to be a problem forever,” Schon said.
Thursday’s Women Advisors Forum event marked the fifth of a six-event series this year. An upcoming event has been rescheduled for Dec. 17 in Boston, after a previous Oct. 30 date was postponed due to Hurricane Sandy.
Lorie Konish is the managing editor of On Wall Street magazine, and also serves as the community editor for this Women Advisors Forum site.