It is much easier to attract clients when you can offer a valuable service to a specific group – the target market. Recently, I have spoken with a group that told me they were going to target the "mass affluent". This is not the first time I have heard of an advisor attempting to market to this group. Studies and articles refer to this demographic, so it is natural that some advisors get inspired to market to them – especially since they are, well, affluent.
The concept is absurd. For our purposes, a "group" or “market” is a collection of people who share common values or circumstances that affect their financial well-being. There are the obvious ones: age, family status, a particular profession, a common employer, a church or fraternal organization. But they can be a little less obvious as well. I have met a lot of people tied together in some unusual and unexpected ways –cancer survivors, art collectors, women with second husbands, men with resident alien wives, expatriate executives, parents of disabled children.
However, I have yet to meet anyone who identifies themselves with a group based solely on bank balance. How would you determine what services they would need? How would you explain what you do for a living at a cocktail party in a way that would attract the attention of someone in that category? "Hi, I'm Steve, and I provide financial advice for people with investable assets in excess of $1 million."
What can I know about someone based solely on that? Their age, their family status, where they live, what they believe, their interests or hobbies, the kind of life they want to build, anything? I have difficulty even imagining financial issues common to people who fit that description if that's all I know about them. Millionaires can be single and in their late 20s or grandparents. How likely is it that they both would be attracted by the same value proposition?
A "target market" for financial advisors is people with a common set of problems that need solving. Learn to describe how you are uniquely suited to solve those problems (better still, be Client-Driven as I coach advisors to be, and have THEM tell YOU how to describe what you do), and anyone in that group you talk to will immediately be interested. Knowing income or bank balance does not tell you much about what those problems might be, and will do nothing to help you attract clients.
Knowing that certain demographics within our population are shifting can be useful on a macro level. Recognizing that there is a growing "mass affluent" population, for example, may indicate that there may be more people than before who can afford our services once we have defined and priced them. From the standpoint of designing a strategic differentiator or writing a marketing plan, though, it is a worthless concept.
Let's forget the "mass affluent."