Why Serving Business Owners is the Secret Sauce to Building a Vibrant Wealth Management Firm
In this illuminating episode of the Modern Financial Advisor Podcast, host Mike Langford sits down with Jason Early, CEO of RISR, to discuss how targeting business owners can massively elevate a financial advisor's practice.
The discussion covers why treating a privately held business as just another asset is a missed opportunity, and how business owners, who control a significant portion of private wealth, are an untapped client segment.
Learn how RISR's technology helps advisors understand and manage the complexities of business owner clients, moving beyond typical financial advice to drive substantial assets under management and deliver significant value. Don't miss the actionable insights on succession planning, risk management, and leveraging the unique needs of business owners to grow your advisory business.
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In the world of financial advisory, standing out requires more than just competence—it demands excellence in understanding client needs and leveraging untapped markets. One such market, as highlighted by Mike Langford and Jason Early in this episode of the Modern Financial Advisor Podcast, is the business owner segment. With 66% of millionaires being business owners and 88% of those worth $30 million or more, the rationale for advisors to target this demographic becomes clear.
Understanding the Unique Needs of Business Owners
Financial advisors often treat privately held businesses like any other asset on a balance sheet. However, this approach is inadequate given the complexity and significance of such businesses in an owner's financial portfolio. As Jason Early explains, understanding these businesses deeply is critical—not just in terms of their financials, but also their operational risks, succession plans, and the personal priorities of their owners.
The Rise of Business Owners as Ideal Clients
Business owners bring complexity, but also opportunity. They offer a wider range of financial needs that advisors can address—such as business succession planning, risk management, and retirement strategies for both the owner and their employees. This complexity translates to potential for advisors, as solving larger and more complex problems can lead to increased revenues without necessarily resorting to expanding the client base dramatically.
Strategies for Engaging Business Owners
Effective engagement with business owners requires both strategic planning and the right tools. Advisors should aim to deeply understand the industries their clients operate in. This is where platforms like RISR come into play, providing insights into business valuations, wealth management strategies, and risk assessments tailored specifically to privately held businesses.
Early advises financial professionals to hone in on 'riches in niches', focusing deeply on one or two industries. This specialized knowledge allows advisors to present themselves as more than just financial planners—they become strategic partners for business owners who are navigating the complexities of growth, management, and eventual exit strategies.
Building Trust and Relationships
Trust is paramount when dealing with business owners, notoriously hard to pin down due to their packed schedules and heavy responsibilities. Part of the challenge—and opportunity—lies in advisors building trust not only with the business owner but also with related stakeholders such as key employees and family members involved in the business.
Moreover, working with business owners offers the opportunity to forge long-lasting relationships across generations, as many businesses involve family members either as future leaders or stakeholders.
Conclusion
Engaging with business owners can seem daunting due to the complexities involved, but the potential rewards are significant. Financial advisors must position themselves not only as financial stewards but as comprehensive advisors capable of supporting business owners through every stage of their journey. Equipped with the right tools and approach, such as those offered by RISR, advisors can unlock substantial growth while ensuring they meet the holistic needs of their affluent clients.
By focusing on the unique needs of business owners, advisors are not only opening new avenues for their own business growth but are also playing a crucial role in supporting the economic backbone of communities—small and medium business enterprises. The message is clear: go beyond the balance sheet, understand the wealth-driving forces of a business, and watch your advisory business soar.
Chapters:
00:00 Introduction to Financial Advisors and Business Assets
00:34 Welcome to the Modern Financial Advisor Podcast
00:38 Introducing Jason Early and RISR
02:24 Myth Busting: Business Owners and Wealth
04:25 The Complexity of Business Owners' Financial Needs
05:21 The Evolution of Financial Planning
06:34 The Importance of Comprehensive Financial Advice
07:54 Connecting with Business Owners
10:35 The Role of Financial Advisors in Business Succession Planning
13:00 Understanding the Business Owner's Perspective
16:26 The Riches in Niches Strategy
24:07 The Confidence and Competence Gap
28:49 Blue Oceans vs. Red Oceans
29:30 The Importance of Tools for Business Advisors
29:55 How RISR Works for Advisors
30:58 Financial and Qualitative Insights for Business Owners
33:02 The Growing Trend of Private Company Ownership
38:51 Advisors' Role in Business Succession and Exit Planning
47:19 The Complexity and Opportunity of Working with Business Owners
51:04 The Rise of Solopreneurs
53:56 Conclusion and Final Thoughts
