HOLLYWOOD, Fla.-- Advisors still have trust hurdles to get over, but that also opens the door for new takeaway high net worth business.

Michael Kostoff, managing partner at The Kostoff Group, spoke on a panel at INSITE 2011, Pershing’s Financial Solutions Conference in Hollywood, Florida.

“The opportunities are significant,” Kostoff said about the growth and concentrations of wealth.  He went on to say, “2008 has created trust issues.  Take advantage of that opportunity.”

Kostoff believes there is going to be growth in the high net worth market.  This makes sense as he sees that the segment has already recovered from the problems of 2008.  He added, “The market is growing, but it is becoming more concentrated.”  He proved his point by showing that 1% percent of our country (each having more than $3 million in wealth) has 40% of the overall wealth in this country.  He thought while this might not be great for our society, it is not bad for the advisory business.

A hurdle and opportunity

Kostoff believes there is still a lack of trust. 

"The only thing that drives behavior is strong feelings," he said, adding that there is not a high level of trust for regulators and markets.  Firms and advisors scored just slightly better, with advisors getting the best result out of the four groups.

Of those working with advisors:

-- 26% are more satisfied than they were

-- 55% have the same satisfaction

-- 18% are less satisfied

Kostoff believes about a third of clients are in play.  He said the two biggest reasons for clients leaving in today’s environment center around client relationships:  the number one reason given was "my advisor is not communicating with me" followed by "my advisor is not listening to me."

How to get and keep them

Kostoff said, “They still need us, today more than ever before.”  He listed things like selecting specific investment products, planning for retirement, tax reduction strategies and managing asset allocation as the most important to the high net worth individuals.

When it comes to drivers of loyalty, for advisors he believes trust is the most important factor.  That is followed up by accessibility.  Kostoff asked the attendees, “When they call you, are you there?  Are you responsive? Average HNW clients want to be contacted at least once a month.”  "Plan a communication strategy to talk to your clients more frequently," he said.  Lastly, he identified the third driver as quality advice.

For drivers of loyalty to firms, quality of advice ranks at the top of the list. Service and value for money are the next two factors. 

Kostoff ended saying, the higher satisfied these individuals are, the more likely you are to get referrals.

Mike Byrnes founded Byrnes Consulting to provide consulting services to help advisors become even more successful.  His expertise is in business planning, marketing strategy, business development, client service and management effectiveness, along with several other areas.  Read more at http://www.byrnesconsulting.com/.