5 myths about affluent clients wholesalers need to deconstruct

by Insurance Business Wholesale11 Sep 2015
Clients don’t need to be a celebrity or CEO of a Fortune 500 company to become the victim of a superfluous lawsuit.

A volatile economy, coupled with technology advancements and the sustained success of e-commerce and social media, has caused a dramatic shift in the landscape of wealth in the US. Within this new landscape, affluent clients are no longer a niche group of people with a net worth of more than $50 million.

This shift has a tremendous impact for our business and forces us to ask: In the current climate, what makes a client “affluent”?

I define today’s affluent client as someone whose net worth makes them a possible target for liability lawsuits, and it’s likely that many of your existing clients fall into this category. We often fail to identify affluent clients because we haven’t asked the right questions.

Affluent clients require a careful review of their assets and lifestyle so that a personalized insurance program can be constructed to adequately protect their family and long-term financial well-being. Initiating this process means we need to throw out our preconceived notions of “who” an affluent client is and instead take a complete risk management approach in evaluating the type of coverage those clients need.

Myth: Net worth is reflected in physical assets
It may seem obvious, but don’t judge a book by its cover. While high net worth clients are easily recognizable by their homes, cars and accessories, today’s affluent client may only be identifiable by what you can’t see, such as a substantial investment portfolio. Asking the right questions is critical in gaining a clear picture of all assets, from properties and investments to jewelry, art and expensive toys.

Myth: Risk exposure is determined by a client’s profession
Clients don’t need to be a celebrity, professional athlete or CEO of a Fortune 500 company to become the victim of a superfluous liability lawsuit. A client’s lifestyle and public presence can also contribute to their risk profile. Remember to consider social circles, volunteer work, board memberships and the risks associated with these responsibilities when evaluating the coverage required.

Myth: Special risk assessments are only required for high net worth clients
When working with an affluent client, brokers must go beyond the act of quoting policies and become a true risk management advisor. In doing so, we can uncover risks, quantify their impact on the insured and ultimately provide solutions to protect the client.

Myth: You only need to worry about the client and their extended family
Liability risks don’t end with family members. Many affluent clients consider their household staff an extension of their family – and you should too. Housekeepers, landscapers and nannies all have risks associated with their employment, which must be taken into account when building an insurance package.

Myth: It’s difficult to maintain a long-term relationship with an affluent client
In my experience, brokers who can provide comprehensive risk management services in addition to cost-effective policies become a highly valuable and important long-term resource. Offering to sign a confidentiality agreement can be a great first start in building trust with the client. As the relationship develops, the broker will gain an unparalleled understanding of the spectrum of risks the client faces. In addition, a trusted advisor benefits from an intimate knowledge and confidence that helps to lock out future competition.


Patricia LeBon is a personal lines manager for Burns & Wilcox, the nation’s largest independent wholesale broker and underwriting manager. A wealth management advisor who has consulted with many of the Forbes 400, she is an expert in managing risk for multi-generational, multi-state clientele. For more information visit www.burnsandwilcox.com.