There are now almost 357,000 Canadians that consulting firm Capgemini calls High-Net-Worth-Households (HNWH’s), people with at least $1 million in wealth, not including their primary home. The focus of the Luxury Home Mortgage Advisor course is on working with HNWH’s and their centers of influence, as this will offer you the most opportunity. But it’s important to know each of the following 5 market segments, as this will give you an advantage over your competition and will help you walk into any meeting fully prepared.
5 Market Segments Luxury Home Mortgage Advisors Work Within:
- The Ultra-Consumer. These luxury homeowners have high annual earnings. They live in expensive homes, but they may not necessarily have the net worth affluent clients have, and they certainly are not as rich as they want their neighbors to believe. The ultra-consumer focuses on maximizing lifestyle vs. building net worth, they are spenders not savers. You can probably think of a few clients you’ve encountered that fall into this category. Clients that like to drive expensive cars, wear $10,000 watches, and have gigantic mortgages they can barely afford. The ultra-consumer will definitely have a need to refinance with you in the near future, probably on more than 1 occasion.
- The Emerging Affluent – These luxury homeowners will likely reach the affluent level in 5 – 10 years. When going through your database, you may want to flag clients you think will become affluent in the future based on what they do for a living. Chances are if you’ve met a professional that just graduated, he or she may not have a whole lot saved up yet, but based on their profession, they might move into the affluent and high net worth categories sometime in the future. Think dentists, doctors, lawyers, accountants. These young professionals are likely to purchase more expensive properties as their wealth grows and will benefit from information you can send them periodically on real estate investments and tips on purchasing your first luxury home.
- The Affluent – Homeowners that have investable assets ranging from $100K – $1M. Affluent clients have similar tastes and mindsets as high net worth clients, but they are more conservative and are still very concerned about asset conservation. Many affluent clients are millionaires, but remember, a millionaire is someone whose total assets minus total liabilities is equal to one million or more in net worth. This includes the value of their residence minus any mortgage debt. The majority of affluent AND high net worth households you’ll meet are savers, notspenders – there are “atypical millionaires” who spend, but the majority will bring their middle-class values with them to the table.
- High-Net-Worth Households – have investable assets ranging from $1M – $30M, not including their principal residence. This is the primary market you will want to target as high net worth clients tend to have larger mortgages. High net worth homeowners have accumulated wealth and many own multiple properties, sometimes in different countries. They are investment savvy and understand the value of intelligent debt. In the next module you will spend time developing your sales and marketing plan, which includes building a network of top tier professionals that can refer you to their roster of high net worth clients.
- The last of our 5 market segments is the Ultra High Net Worth household. Representing the top one percent in North America, these luxury homeowners have investable assets greater than $30M, not including their principal residence. The majority of UHNWH’s you meet will activate their real estate assets as part of their overall strategic financial plan.
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