I'll be appearing on "Secret Societies of Hollywood," an E! Channel series premiering tomorrow, Thursday April 17, at 8:00 PM EDT. In tomorrow's episode, "Deals and Dealers," I discuss my experiences with rich and famous clients during my days at Merrill Lynch.
Throughout my business career, both in financial services and in other industries, I've been astounded by how frequently senior managers harbor completely erroneous notions, despite empirical evidence to the contrary. While I was at Merrill Lynch, for instance, a key executive was fixated on luring Hollywood celebrities and pro sports stars as clients, insisting that this would be a highly lucrative market. He ignored copious internal intelligence that suggested just the opposite. Moreover, an influential book entitled The Millionaire Next Door offered observations much in line with what the internal analysts had uncovered: a surprisingly large trove of wealthy clients who resided in unfashionable Zip Codes and/or who pursued unglamorous lines of work. Meanwhile, amazingly few of the A-list celebrities we counted as clients had especially large accounts, or appeared to be adequately profitable.
Desperate to mine illusory opportunities in the celebrity market, this executive wasted countless staff hours on pursuing ill-advised deals with Hollywood accounting firms. Luckily for Merrill Lynch, the paltry financial assets on offer killed these initiatives. Unfortunately, he unwisely gave away the store in a deal with sports superagent Mark McCormack, founder and CEO of the mighty IMG agency. The deal proved to be a sinkhole for Merrill Lynch and a career killer for the executive.
Whether the wealthiest clients are indeed the best and most profitable financial services clients is another question, for another day. The point here is that finding clients with large sums to invest often requires looking in unexpected places. This is a lesson both for business strategists and for financial practitioners.
The Millionaire Next Door was an enormously useful and instructive book from the standpoint of my financial services career. Please feel free to visit my forum and share your own recommendations on books or websites that can be helpful to someone pursuing a career in financial services.