Last week CoreData hosted its semi-annual breakfast with a group of very wealthy Australian males with more than $30 million each to invest. The aim of this focus group is to develop a pattern of knowledge about what people with truly life changing sums of money think about financial planning, private banking and wealth management in general.
Being candid, the majority of information I have about how much money these people actually have comes from the media, which I assume is laughably incorrect as the last thing that this group would ever do is tell anyone how much money they have. However, six of those in the group have investable wealth that would together amount to billions.
While the more granular details of this report are only available to CoreData’s Private Bank Intelligence Unit Subscribers, there are a few things that all Australians who either work in this area or want to work in this area need to know and understand:
1. The rise of the working rich
In the 1850’s Australia was riddled with Trustee Companies, Private Banks and Stockbrokers whose entire existence was based on the idea that they managed the estates of the reasonably idle wealthy – usually individuals or families that had grown wealthy from farming, or occasionally mining or more rarely, industry.
Once they had reached a critical mass of wealth, these families seemed to simply stop working and allow the money to work for them – they passed the money on to their children, who practiced the same art of the (if not idle) relaxed rich.
These people no longer exist really. All of the men who attended breakfast last week, while in every case ridiculously wealthy, all worked and worked hard and while all of them had started off as children of the middle class, their real wealth had been created in a single generation.
In the pre-breakfast questionnaire, all declared that they get out of bed before 6 am every day to both exercise and work. By 7am, all of them have consumed their media (email, internet and then newspaper in that order).
The other part of work was socialising. They all take social commitments seriously…that means taking networking very, very seriously and attending up to four social functions every weekend. Put simply, this group is working the room every weekend to build up not only the size, but the quality of the relationships in their network, in order to get every ounce of advantage they can from these.
2. This means they are VERY concentrated on utility
Let me be clear her for a second – none of the people that attended the breakfast did so for monetary compensation (some French wine or sunglasses from Ray Ban were made available following the research, in case you were asking), they came because they wanted the research data that we have and they came because they wanted to talk to each other and of course network! They wanted to hear what they were each up to and to talk about the challenges of being seriously wealthy.
So being clear again – this group is very, very concentrated on the concept of utility. Which put really simply is: What is it that you can do for me and how much does it cost?
If you want to engage with the super high net worth you need to be able to describe what you offer and at what price. And that means being an acknowledged expert at something and offering some element of service that they want in their life.
It’s really important here to mention the idea of ‘likeability’- that is, how charming and easy you are to do business with.
Essentially this is important because unless you are likable, then really no matter what utility you offer, it is going to be very hard for you to grow your business with this group.
No matter how hard I know they are as business men, no matter how many companies I know that they have stripped bare, number of people they have laid off, or public battles they have had where reputations came to grief…they have always remained very, very likable, charming and polished.
3. Fast processing speeds
There’s a lot of new research about how brains are wired, how neurons work together and the patterns and physical constructs of thought.
In part it’s because there have been a lot of advances in MRI technology which has made this type of research much cheaper, much richer in terms of data and more accessible. In part it’s also because businesses want to understand the mechanics of decision-making and pleasure.
One of the results of the research is that scientists have discovered what we have long known – that some people think quickly and some people thing slowly. It doesn’t mean they are more or less intelligent, it’s just about the speed at which thought processes take place.
There’s plenty of academic research on this subject and soon enough it will be coming to you in the form of a business book I’m sure…about how the rich tend to have fast processor speeds – that they take in information quickly, process it just as fast and then move on to the next piece.
To work with them means you have to match them. That also means, disappointingly, that you have to keep up, you have to do the work, you have to do the reading, you have to be able to process it all and you need to know what it means. Because the super rich are always trying to make a map of the future and use that map to plan the places where they can build an advantage.
4. They can all think about what’s coming down the pipeline
Let me be clear for a second – the super rich hate Julia Gillard. They hate her not because she is a Labor leader (almost half the room declared that they were Labor voters), but because she doesn’t have a plan for the country, that she fumbled away the mining boom and that she lacks substance.
All of them had an understanding of what they thought was happening in Australia and around the world, and all of them had a plan about what they were doing to profit from it. All have a five year view.
None of them considered or were considering retirement. None of them are even sure what retirement means!
To work with this group you need to have a very clear map of the future and some definite plans for what you are doing, and they need to match their thinking.
Just as a side note – don’t for a second get the idea that their plans for the future are fixed; they evolve every three months and a real opportunity for any service provider is to be part of that evolutionary thinking.
5. Despite being seriously rich they defer pleasure
One of the great tenets of the writing of Sigmund Freud is that there is a class of people out there who defer pleasure, that much of their life is bound by goal setting, achievement and reward.
All of the super rich I have interviewed so far are like this. That’s not to say there are not mavericks, who have become rich through their art who are not like this, but certainly all of the people this room were like this.
They are all fit, because they exercise pretty hard and they all thought about their diet. They were all, however, able to articulate the plans they had for pleasure – and then bind them to something that they were doing and to create a gateway for the event:
“I’m going to take the family to Greece for a month, if I get through this quarter well and if it stays cheap…”
“I’m going to play golf with a couple of friends in the southern states of America in their autumn, we’re going to a conference and we will do it after that…”
Curious final insights…
How they dressed – Sunday casual is standard for the super rich, namely; Polo or Lacoste collared tops, shorts and expensive sailing shoes or new sandshoes.
What they drove – One Bentley (very new, black and as imposing as a battleship), two ancient Hondas, a Silver Camry, a dark green Jaguar convertible, a white Mercedes, a dark blue Mercedes, and a dark grey Mercedes AMG 63 with all the badges removed.
What they ate – Welcome to the world of diet.
One of the interesting things about this group is that while they are all more than 50, they looked younger and they were thoughtful about what they ate.
Knowing this and trying to prepare for it, I provided a choice of three things for breakfast – Bircher muesli, fruit salad and salmon and scrambled eggs.
They all had salmon and scrambled eggs, no bread. Four had coffee, two tea and one peppermint tea. All declared the coffee awful and a discussion ensued about where you can get good coffee in the city.