How To Target Ideal Customers

By Glenn Curtis AAA

Many firms dictate to their brokers the types of clients they want to solicit. Though not written in stone, most of the bulge bracket firms want their reps to prospect for middle-age (or older) individuals with liquid assets of between $1 million and $5 million. Although these can be lucrative clients, it also can be argued that the bulge brackets have it all wrong and that brokers should target people between 21 and 45-years-old whose cash or liquid investments total between $50,000 and $500,000. If you're a broker looking to add to your book of business, we'll show you why you shouldn't overlook this younger and less affluent group of investors.

SEE: 4 Career Networking Tips That Work

Middle Age Vs. Younger Clients
Most middle age and older individuals with a high net worth are set in their ways. They are more likely to have financial advisors already, and often they are not receptive to newcomers attempting to solicit their funds for investment. In contrast, their younger, less affluent counterparts are, as a whole, more receptive to advice. They are also more likely to have life changing events that create situations of liquidity, and thus an opportunity for the savvy registered representative.

As a registered rep, this doesn't mean that you should turn down higher-end accounts. They are great commission generators. Plus, if you do a good job for these folks, they are likely to refer you to other higher-end individuals. But remember: Younger workers are more apt to switch jobs ((and roll their 401(k) money into an individual retirement account (IRA) or a Roth IRA)) or to buy and sell houses as their family grows. These are instances when they are likely to need the advice of a financial professional.

Furthermore, the younger generation is more likely to have children who, in many cases, will need a bundle to go to college. A smart, aggressive broker can help lead the way towards achieving a young family's financial goals. After all, these younger, less affluent families are really just starting off. As their families grow and their life situations change, you, as a broker, will have countless opportunities to build on a mutually beneficial relationship.

Finding Potential Clients
So how do you find these individuals so that you can make your sales pitch?

  • Lists: As a registered rep, you are probably on a bunch of mailing lists for marketing firms that can help you pinpoint your demographic. Of course, you can always check out your local phone book. Local marketing firms can provide you with similar data. Look for lists of people in your area. They'll be easier to contact.

  • Local Organizations: Consider joining your local chamber of commerce. This will allow you to meet a variety of business owners and prominent people in your community. These folks are likely to need funding for business ventures and if you develop a relationship with them, you may be the one they choose to help them do it. There is also the local YMCA, gym and probably a host of other local organizations in your community. Consider joining them too, because they will allow you to meet a diverse group of people that are in your locale. Remember, people like doing business with a broker that they can see and touch, as opposed to just a voice over the phone.

  • Link up with Other Professionals: Make friends with local CPAs, attorneys, doctors, auto sales agents, real estate agents and insurance agents. These people will have the scoop on the financial conditions of a host of locals in the demographic you want to target. Offer to set up a referral system, where you feed them business, and they'll send business your way. This works! And it is a great way to get a wealth of qualified prospects without cold calling.

  • School Events: Consider contacting the local schools to give the kids a (free) discussion about your career as a registered rep. School administrators are usually receptive to this. This allows you to introduce yourself to new members of the community as well as contribute to the children's understanding of saving and investing. You can even send the kids home with your business card and literature describing yourself, your firm, your licensures and your abilities. This will open up a number of doors to young couples with growing families in your community.

The Bottom Line
In short, there are a lot of people within this demographic within a five-mile radius of your home. You just have to be creative in your methods for finding them, and making your sales pitch. Again, these individuals aren't big investors, and no one client is going to make you wealthy. Over time, however, building on clients like these will almost guarantee that down the line, you will have a huge book of business and a steady stream of commission.

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