The Two Types of Wealthy Senior Clients


trump and buffet-1Are you ready to meet people who can fund thirty thousand dollar life premiums, buy six- figure annuities and open half million dollar fee-based accounts?  You can successfully target the affluent when you have the right methods.

There are two groups of affluent seniors:

The “Next-Door” Wealthy

Members of the first group are the affluent (investment portfolios of $1 million or more) who do not think of themselves as wealthy.  Let’s call them the “next-door” wealthy.

These are people like the dry cleaner who started and grew a low-tech business, or the fireman who purchased and fixed up rental homes in his spare time.  These are the “Millionaires Next Door” aptly described in Tom Stanley’s book of that title who live in middle-income neighborhoods and drive cars beyond 100,000 miles.  Picture Sam Walton driving around in his 1972 pickup and you’ve got the perfect example of the “next door millionaire” affluent prospect.

Since most members of this group accumulated their wealth through the ownership of small businesses or by investing in real estate, you can easily rent lists of these people. Consult Standard Research and Data at your local library to find these lists or perform an Internet search for list brokers that can provide lists of:

1.    Businesses with under 25 employees excluding professional firms (doctors, lawyers, engineers, etc).  These are likely to be successful businesses with high margins.  A business that has remained small and has preserved its capital produces a rich owner.  If an age match can also be done, look for owners over age 60 as they will have the most money.

2.    Businesses with fewer than 25 employees but with more than $2 million in their qualified plan.  This is public information from the IRS 5500 form, and can be obtained from several list brokers.

3.    People who own five or more rental homes or apartment buildings with 10 to 20 apartments.  Several firms compile lists of real estate owners.  In most counties, the home they live in has a homeowners tax exemption while rental properties do not.  Therefore, owners of multiple rental properties can be easily identified.

You also find these people by subscribing to magazines with titles like “Rock and Quarry,” “Scrap Metal Today,” and “Earth Moving Machines.”  These magazines have ads from the low-tech businesses that have not attracted competition that have very high margins and wealthy older owners.

Attracting the “Next-Door” Wealthy

Because the next-door wealthy do not think of themselves as wealthy, you can attract these folks using the same tactics that you would to attract the middle market, as these people think much like those in the middle market.  Direct mail, ads and seminars are all effective tools for prospecting.  Note that if these methods have not worked for you in the past, it’s not because these methods don’t work.  It’s because you have not used them correctly so find an expert to assist you.

The next-door wealthy purchase the same products and services as the middle market.  Working with them is just like working with other clients—they just have more money.

The next-door wealthy are typically conservative investors, and want to save taxes.  They are not big stock market investors, as they don’t like to lose money.  They feel that real estate and a business are much safer investments.

In addition to the common products (long-term care, annuities, bonds) the following products and services interest them:

1.    Charitable Trusts and Gift Annuities.  Introduce charitable trusts and charitable gift annuities to those who are real estate-rich and cash-poor which allow them to liquidate their real estate, increase their income and avoid immediate capital gains tax.

2.    Defined Benefit Plans.  Help the business owner convert from a profit sharing plan to a defined benefit plan so he can make larger contributions for retirement and save more taxes.

3.    Family Partnerships.  Demonstrate how a family business or real estate can be passed on with less tax.

Planners successful in this market are not the “three-piece suit ” types who have a Harvard attitude.  These affluent clients are attracted most to down-home simple people who sincerely want to help them.  Don’t drive up in your new Corvette.

In the next post, we will deal with the other group, the “showy wealthy.”

Want to know how agent Charles Wood found a client worth $200 million dollars?  He did it with Internet Leads.



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