Web Finance Article Thomson Media 2001

Simple Sites Speak to High-Net-Worth Investors


Article
Jerry Minkoff
5 March 2001
Web Finance

Affluent investors differ from most Web users not only in having more money but in the kind of sites they prefer. Simple is better as far as they are concerned so financial services companies should skip the bells and whistles. That is the philosophy of Bruce Fenton, president of Atlantic Financial, a Boston-based financial services firm.

Atlantic Financial was founded in 1994 and launched its Web site soon after. It claims to be the first full-service financial firm on the Internet.

Fenton remembers when it was possible to visit all of the financial sites listed on Yahoo! Atlantic Financial was at the top of the page, a position it holds today. Fenton spoke at the Marcus Evans Virtual Financial Services conference recently in New York.

The company's 2,000 clients are both high-net-worth individuals and small to mid-sized companies. Individual clients have a net worth of approximately $1 million; the average account size is $350,000. Corporate clients typically have 50-100 employees.

The best source of leads for Atlantic Financial's Web site is search engines, Fenton said. Banner ads were not successful. First mover status helped, as did Yahoo!'s alphabetical ordering of sites. "We maintained the good placement we had from way back," he said.

After potential clients find the Atlantic Financial listing, Web site design helps to draw them in. Atlantic Financial's site is simple and educationally focused, he said.

"I think what happened in the last five years was a lot of executives didn't have a grasp of the Internet but they knew it was important," Fenton said. They handed over control of the site to the Web design staff and got home pages that look like video games. "It looks great to the techies but I don't think the high-net-worth individual finds it appealing," he said.

Fenton said that since affluent investors are short of time, "They're not the type of people who have time to go on Motley Fool and review chat boards or do independent research." Since they don't have enough leisure time, they require service, which is another of Atlantic Financial's most important differentiators.

"Working person-to-person is not only a good tool but an important tool when dealing with high-net-worth people and 401(k) plans," Fenton said. Atlantic Financial's Web site has an e-mail form, "Tell us how we can help you," to encourage prospective clients to contact the firm.

All e-mails sent through the site are reviewed by a computer operator. What Fenton called the worst-children asking for help with homework, for example-are eliminated immediately. Serious replies are turned over to a sales associate who conducts a brief phone interview to see when they are available to speak with a registered representative. The best prospects will be called within an hour, Fenton said. He reviews all the e-mails and gets a copy of all lead sheets.

It might seem like serious investors wouldn't turn over substantial assets to a site they found by a search of Web sites. However, Atlantic Financial's largest account did just that. "They chose us because they found us on the Internet but the primary reason is the individualized service we provide them," Fenton said. The account, now approximately $120 million, provides Atlantic Financial with $720,000 in annual revenue.

Open-ended e-mails have their drawbacks, Fenton said. As well as homework questions and 12-year-old boys with dating problems, Atlantic Financial has received its share of scams. "We get targeted by money launderers because they think we're a small firm. They don't know about Fidelity Investments," a subsidiary of which clears the company's trades, said Fenton. They have never been burned on a trade, he added.

Fenton isn't bothered by Atlantic Financial's relatively small number of clients. "We really focused on keeping a smaller number of clients because we want to have higher assets under management," he said. Discount firms get more publicity but they have less than 10% of the nation's assets, according to Fenton.

"The Internet is not the end-all of human existence. It's another way to do business," Fenton said. It saves salespeople time and allows them to sell, rather than have to look up account balances.


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