How to engage HENRYs: 5 tips to capture future high earners who are disengaging from the traditional advice process

diverse mix of 20-somethings reading from their phones

By AdviceBridge

Every week high-earning consumers contact us directly looking for financial advice. They mistakenly think we could be the solution they’re after because they don’t want to follow the traditional advice route.

Typically, they earn a six-figure salary, and have a house and young children. Having built a solid foundation, they are looking to the future and come up short when they don’t find help in the form they had hoped for or expected.

These consumers have been labelled as “HENRYs” – high earners, not rich yet. But what does this all mean for you and how can you make sure your business attracts their attention and is able to serve them?

Get to know who HENRY is

The industry has referred to HENRY – high earners, not rich yet – for years. The term was first coined in the US by Shawn Tully, in 2003, in Fortune magazine.

“The Henrys boast a nice income, two teenage kids, a yellow Lab, a Tudor on a leafy half-acre lot in a nice suburb, and love to go ‘down the Shore,’ as Jerseyites like to say.” – Shawn Tully, Fortune Magazine.

Thought of as the “working rich”, but with a “work hard, play hard” philosophy, they need to keep working to maintain their lifestyle.

Typically, HENRYs have:

  1. Higher-than-average income
  2. Little to no savings
  3. A feeling of having little material wealth.

Understand what HENRYs are looking for

Usually, by the time these consumers contact us, they have already talked to several respectable planning firms but find the traditional approach isn’t what they want or need. They are often seeking something “better”, which typically translates to wanting to engage predominantly in a digital fashion. Equally, firms may see them as potentially unprofitable or feel they are unable to provide a service fitting of their needs.

Because we don’t cater for the B2C market, we don’t sell direct to consumers and so redirect these enquiries to advisers using the AdviceBridge platform, who are able to service these clients profitably, building a secure pipeline of future full-fee clients.

The benefits that the platform offers your business and your clients is wide ranging. But here we offer five more tips to capture the attention of HENRYs.

1. Charge a flat fee for financial planning

HENRYs don’t have a large sum of money to invest yet. They are interested in accumulating their wealth, and this is likely the biggest reason they have sought you out. Their focus is likely to be on paying down debt and securing their future, so charge a flat fee for cashflow management and arranging the right type of protection.

This will help build trust and engagement for a price you can both accept as reasonable.

2. Don’t insist on a minimum investment

If they are seeking your planning services, HENRYs probably don’t yet have huge funds to invest. More likely, they will have a moderate sum they wish to invest and intend to make regular contributions over the long term.

Having a simple service and investment solution will make it easy for them to understand and enable you to build trust and engage them over time as their requirements become greater.

3. Focus on tax planning

The HENRY client segment will probably welcome your tax planning expertise, so make sure you address this from every angle. AdviceBridge can help with your tax advice and can help with mitigating tax costs and strategising for a secure low-tax retirement income.

As high earners, you can serve HENRYs by helping them reduce their tax liabilities now. With the top rate Income Tax at 45% for those earning over £150,000, advice to help ease this heavy burden will be well received.

It needn’t be complicated:

  • Make sure they are using their full ISA allowance.
  • Make use of pension contributions.
  • Use spouse allowances wherever possible.

Of course, tax advice will change over time and in later years it will become more important to ensure sensible tax planning for retirement income.

4. Take the long view

Remember, this is the beginning of a long-term relationship. You need to keep in mind that, with HENRYs, you’re in it for the long haul and you’ll accumulate over years, rather than months.

5. Offer automated advice and a digital service as standard

Unless you’ve been living under a rock, you’ll already know automated advice is on the rise. And the desire for an automated service is the reason why HENRYs are contacting AdviceBridge thinking we could offer the digital service they are seeking.

However, it’s not just this client segment that is looking for a digital solution and we can help you serve others too, and probably a lot more profitably.

How AdviceBridge can help

The AdviceBridge platform helps you deliver personalised financial advice to clients, through automating many of the manual processes in an efficient and cost-effective way.

The white-label app gathers personal and financial information from the client and digitises many of the time-consuming processes, allowing you to focus on the relationship, instead of admin, research, or reports.

For your clients, the goals-based tool enables clients to see how altering their finances will affect them now and in retirement. With sophistication and detail, AdviceBridge shows the best way to invest across different tax wrappers, cutting fees, and saving tax.

Get in touch

If you want to find out how AdviceBridge can benefit your business and your clients, please get in touch. Email or call us on 020 3925 3850.