Junior Exec Photo by Ali Morshedlou on UnsplashIMAGE: Ali Morshedlou / Unsplash

Lower level company executives/managers (i.e. Vice Presidents and Directors) that receive stock compensation should be on your prospect radar if they aren’t already.  These employees often fall into what can be described as the “emerging affluent” which is a hot new opportunity if you know how to serve them.

Emerging affluent clients (assets under management [AUM] between $100,000 and $250,000 and under 45 years of age) will grow to high-value AUM over time through career advancements and wealth transfers. These clients are expected to accumulate more wealth in the future, whereas high-wealth clients (AUM over $1 Million) are harder to win and will likely begin drawing down assets soon. Since there are tens of millions more emerging affluent than there are high-wealth individuals, there is a large prospect pool in almost every local market.

Although not all of the emerging affluent are corporate employees participating in an equity compensation program, the National Center of Employee Ownership (NCEO) estimates that there are approximately 10 million individuals in this target market.

The emerging affluent have common planning needs (i.e. budgeting, education, retirement, tax management, and portfolio design).  However, equity compensation diversification assistance provides a unique niche that drives reoccurring AUM as the employee receives additional grants of company stock and options.  Financial advisors that possess the subject matter expertise and tools to facilitate timely, prudent and profitable stock compensation diversification decisions are poised to attract and serve this segment of the emerging affluent.

The use of efficient service delivery methods is necessary to profitably serve numbers of emerging affluent clients simultaneously.  Consider the following technologies:

  • Custom equity compensation management and diversification tools (i.e. StockOpter.com and StockOpter Pro).
  • Client access to online reports and what-if dashboards to establish a framework for making decisions.
  • Automated company stock portfolio alerts to monitor diversification decision criteria.
  • General financial planning tools to address other planning needs.
  • A proprietary “robo-adviser” to efficiently manage the “diversified” portfolio.

The time used to develop an emerging “executive” advice and service package can be distributed across many of these clients.  Each new client further improves the profitability of this group.  This strategic approach to servicing the emerging affluent will compound a firm’s growth over time so targeting up and coming executives is a winning strategy.

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