09/09/2010 07:09 pm ET | Updated May 25, 2011

Welcome to the Wonderful World of the High Net-Worth

As the story goes, F. Scott Fitzgerald once remarked to Ernest Hemingway, "The rich are different than you and me." To which, Hemingway replied, "Yes, they have more money." Fitzgerald, as you probably know, was obsessed with the rich, how they behaved, what they thought and so on. On the other hand, Hemingway was clearly more of an everyman. As most of us are everyday people, we are unfamiliar with how that elite world operates. What is different about the world of a high net-worth family? How about multi-generational wealthy families? What are some of the problems that having money creates?

Typically, high net-worth families rely on "family offices" to manage their complicated day-to-day lives. These family offices may be single family offices, i.e. just for one family, or they may aggregate services among many families, thereby known as an MFO or multi-family office. A dedicated staff usually handles many facets of financial services including investments and complex asset allocation strategies. They also are responsible for associated tax implications, trusts and estate matters (either via in-house expertise or to specialized outsourced firms). Additionally, the staff of an family office may manage multiple residences and domestic staff. For others, it may involve private aircraft and its maintenance, etc. The more assets that belong to the family, the more to track, insure, maintain, etc. Most family offices handle travel arrangements, may create special family events, advise on philanthropic decisions, etc. They handle the routine "paperwork" for wealthy families whose everyday life is complicated. Family offices routinely manage bill pay/reporting as well as more sophisticated transactions such as legal matters, real estate transactions, etc. The family office staff implements controls, reporting and structure to manage expected service levels and reflect certain values for each particular family they support.

Multi-generational families need support and guidance on family management, tax planning, governance issues, succession planning, as well as every day accounting. For multi-generational wealthy families, some of the advice sought after may be regarding philanthropic foundations, and how to evaluate outside charitable areas of interest, how to structure the family's position on environmental matters or a myriad of other things which wealthy individuals may find interesting and worthwhile in addition to managing their family business and other assets.

This is the world in which I am working in every day. I am neither wealthy myself nor had the good fortune of being born into a family which has been wealthy for past generations. I must navigate the worlds between the business which I am creating and the life which I am living. Over time, I have developed a keen eye and deep understanding of what motivates HNW (high net-worth) individuals. Marketing products or services to the high HNW client differs tremendously from mass marketing to the "everyman." The essential difference lies in the relationship and trust -- marketing within the HNW space is almost always relationship-based and highly targeted to particular groups of individuals or family offices.

Access to the HNW is only available to a handful of "vetted" individuals. Word-of-mouth recommendations rule. If the right person tells you to "take the meeting" you do so. It is a tightly woven community of trust in the HNW world. That was that trust which Bernie Madoff exploited. He based his "marketing" on word-of-mouth from one rich person to another rich person. His word-of-mouth campaign was executed perfectly. It evolved to be an "exclusive club" to which people were even denied access. The more people who were denied access the greater the demand became to "get in." I have heard of many stories of the "lucky" investors who were turned away by Madoff who claimed that his hedge funds were "closed." Access to these powerful clients is something which comes with implied trust and secrecy. This is exactly what Madoff took advantage of. Trust and one's own reputation are essential tenets of becoming service providers to the HNW.

How can a service provider penetrate that market without the usual introductions? Here are some basic suggestions:

Strategies for prospecting in the High Net Worth Market

Go meet the HNW on their turf. Try joining the best country club, play golf 3 times a week at 2 pm and you will likely meet wealthy business owners and retirees or perhaps large shareholders of large companies. Also, target a specific number (limited) and type of client. Its quality of clients vs. quantity of clients in the HNW world.

Here is another way to "mingle" with your prospects. Each year, when the opera (for example) has their annual gala, buy a table for and bring your best clients (a nice treat for them!). You will get noticed and meet others in attendance. Follow up with the individuals and then volunteer on one of the opera committees. These committees will be populated with usually wealthy older patrons of the arts, your younger generational wealth or perhaps the emerging affluent. You can make friends, get invited to their events and leverage each contact to the next. Take every meeting and get to know the names and backgrounds of those targeted by your marketing plan.

Here is another smart idea: try to dominate an industry. One successful real estate entrepreneur I know believed that hedge fund principals were wealthy individuals. He located events targeting hedge fund managers at which he could give talks on the real estate markets and mingle. He went to their turf. Additionally, he has written articles on investing in real estate for their newsletters specifically addressing the hedge fund bonus situation and planning for opportunistic investments.

Next, and this is key: try to focus on "money in motion." Money is "in motion" during the following life cycle events:

Death -- do you prospect trust and estate attorneys?
Divorce -- do you prospect matrimonial attorneys?
Sale of a business -- do you prospect business brokers?
Sale of Real Estate -- do you prospect commercial real estate brokers and real estate attorneys?

You can work to cultivate relationships with others that can introduce you to their wealthy clients. These are called centers of influence. Find other service providers that may have the type of relationships which you want and exchange contacts and introductions between both of you. Expand your rolodex and your firm's name will also spread virally. Think beyond CPAs and attorneys to art gallery owners, high-end car dealers and the like.

Finally, don't forget a social/online media strategy, especially if you have set your sights on, for example, hedge fund entrepreneurs. Create a strategy and stick to it. Social media strategy emulates the more traditional word-of-mouth marketing in an online platform. Create, update and utilize LinkedIn to increase your online visibility and to best leverage your existing contacts to meet new ones and learn about similar individuals at other firms and so on. Facebook, while typically used for social rather than business networking, is still a viable tool for an online presence. The goal is to increase the proliferation of your firm and your message. Twitter was initially dismissed by mainstream business as a not "serious" form of social networking. As someone who has recently begun "twittering" my tweets, I think it is a great medium for exchanging ideas, especially for those on the go! Frequently, I will read my incoming tweets when bored. I subscribe across a wide variety of topics including social media/marketing, news feed, women's issues, parenting, foodies, etc. You can decide to skip a tweet or news bite, open the link and read it, reply to the tweeter privately or reply to all followers of the tweet. You can also forward the link via text message or even email to help spread the viral message. An example of this is following a chef who tweets a seasonal recipe and you forward the link via Twitter to all of your followers. Just some basics on Twitter...

Sometimes the HNW arena is an elite world which seems impenetrable and so I enjoy and value teaching others how to network amongst the rich and famous. However, I also confess that during other times, I think of "Miss Jane" the private banker alongside "Mr. Drysdale" on the Beverly Hillbillies. And, other times, Robin Leach of "Lifestyles of the Rich and Famous" theme comes streaming through my head....

The real truth: I am just awaiting the day when I can change my "service provider" Coach Ocelot Print Maggie pocketbook (retail: $298) for a Hermes Birkin Bag (retail: $9,000) I want to change sides from an offensive position to the defensive side.