In the June 24, 2006 WSJ, Scott Stearns authors ‘Advisers Mine Clients’ Personality Types Emotional Responses, Rather Than Assets, Affect Service and Marketing to the Wealthy’. An excerpt:
“In hot pursuit of the affluent, more financial advisers are focusing on the passions and motivations of their clients, rather than just the size of their wallets. For these advisers, it no longer suffices merely to know clients’ favorite sports teams and the ages of their children. They want to know how a client’s mind works — and they are using a host of new “psychographic” tools to help them figure that out. JPMorgan Asset Management, a unit of J.P. Morgan Chase & Co., recently hired a New York-based cultural anthropologist to research what makes the affluent tick. The study, released to advisers in March, found that wealthy people generally fall into one of five categories, including “thrillionaires,” who see their money as a means to splurge on fabulous objects and experiences, and “willionaires,” who feel wealth brings a responsibility to improve the world and who are most likely to see their name carved into the side of a building. This kind of research influences the way retailers decorate stores and the kinds of homes real-estate developers build in planned communities. Pharmaceutical companies use it to target sales pitches to physicians. For advisers, it provides a framework for working with clients — and selling them new products and services. An adviser might pitch a conservative asset allocation as “innovative and customized” to a thrillionaire client, said Susan Hirshman, a wealth strategist and managing director at JPMorgan. Drone on about “conservative investing,” and that investor might flee to another adviser who better understands what pushes the investor’s buttons. Similarly, a meeting at the fanciest restaurant in town might lead the “realionaire” client (thrifty, “Millionaire Next Door” types) to wonder if the adviser is charging too much.”
This type of analysis doesn’t suprise me, but it does scare me. “Feeding” bad habits, which I believe these efforts do, is not wise long-term strategy.