Serving Entrepreneur Clients

From risk profile and time to liquidity and cash flow needs – entrepreneur clients may require a different strategy. Learn more bout how to better serve this type of client in the following article by Leah Golob, contributor with Investment Executive

Entrepreneurs are a different breed of client: they require more service, attention and availability than your typical professional, says Marc Henein, senior wealth advisor with ScotiaMcLeod Inc. in Mississauga, Ont.

While most professional clients want to meet with their financial advisor through structured meetings a few times per year, entrepreneurs often face impromptu business opportunities, such as buying a building or expanding their business.

“Entrepreneurs usually seek our opinions, whether they’re sending a text message saying, ‘Can you give me a call?'” Henein says, “or calling my cellphone at 8 o’clock at night.”

Here are five ways to serve and retain your entrepreneur clients:

1. Be flexible with your time
Entrepreneurs are typically busy during the day managing their business, their team and their growth strategy. They typically don’t have time during the day to answer phone calls, Henein says, so they usually want to get in touch outside of traditional office hours.

2. Maintain liquidity
Keep some of your entrepreneur clients’ portfolios in liquid investments, Henein advises. Your client might come across opportunities to purchase real estate or grow their business in other ways. They need an advisor who can manage their money in a way that allows for quick withdrawal.

3. Recommend low-risk investments
“[Entrepreneurs] take tremendous risk in their business,” Henein says, “and that is by far their greatest asset.”

You should manage your entrepreneur clients’ finances in a way that counterbalances that risk with more stability. As an advisor, you are managing a relatively small part of an entrepreneur’s overall net worth.

“I position [the investment portfolio] more as their ‘rainy day’ money than their retirement money,” Henein says. Entrepreneurs usually fund their retirement through the sale of their business, so it’s important to manage their portfolios in a balanced fashion.

4. Partner with tax and legal professionals
Entrepreneurs usually don’t have time to meet with their lawyer one day, their accountant the next day and their financial advisor the day after that. For many of Henein’s clients, he organizes a group meeting, in which each advisory professional shows up at the entrepreneur’s office to provide updates on various issues affecting the client’s business.

“It’s in all of your best interests to see that your client is better off,” Henein says. He also recommends meeting with tax and legal professionals separately from your client, to determine how you can best work together to serve his or her business needs.

5. Create an end goal
“My experience is that every entrepreneur begins with the end in mind,” Henein says.

After signing on with a client, Henein creates a financial plan to determine how much money his client will need to receive in the sale of his or her business in order to sustain their lifestyle.

While you can’t always tell your client how to grow their business, you can use your network of professionals to help ensure they receive the right tax, legal and business advice to help them reach their goals.

Source: Investment Executive