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Prying Eyes
Michelle Leder
11/01/2006
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Michael Klowden, CEO of the nonprofit Milken Institute in Los Angeles,
acknowledges that individuals find it distasteful that such information is so
readily accessible with a few mouse clicks. But as a trustee of the University
of Chicago, he understands how important that data is to the school’s
development staff. Annual proxy statements filed with the SEC, which detail such
items as salaries, bonuses, stock options and the nonprofit boards on which
executives might sit, are vital weapons in the fundraiser’s arsenal. When the
Milken Institute or the university’s fundraisers target a particular individual
for a donation, Klowden says, "It’s important for them to know what that
person’s interests are and what sort of message would grab that person’s
attention."By refracting individuals through a prism comprised of not only their net
worth but also of the types of experiences they seek in life, Samuel claims that
he is able to provide better understanding of these interests. Research he
conducted earlier this year for JPMorgan Asset Management classified affluent
individuals into five categories, based on the way he witnessed people spending
their money. - The "Thrillionaire" constantly seeks out new experiences and
is willing to spend significant amounts of money on adventures, whether it be
sailing a bigger yacht or taking a personally guided hike up Mt. Everest.
- The "Coolionaire" views creativity as the essence of life
and likes to surround himself with beautiful, unique objects. He is often found
at galleries looking to snap up the hottest new artists.
- The "Realionaire" takes a less-equals-more approach to
wealth, as first described in the best-selling book The Millionaire Next Door.
He prefers to stay out of the limelight as much as possible.
- The "Wellionaire" focuses on looking good, feeling healthy
and thinking positively. He enlists a personal trainer, nutritionist and
personal chef, and usually spends a week or more at the spa every year.
- The "Willionaire" is determined to make the world a better
place. Berkshire Hathaway CEO Warren Buffett, who said that he is giving the
bulk of his assets to the Bill & Melinda Gates Foundation, is one
example.
 Kristen Batteria, a spokesperson for JPMorgan Asset Management, says this
type of research helps a financial advisor who wants to peddle mutual funds, for
example, gain a better understanding of the customer on the other side of the
desk. "Not every client would feel comfortable being invited to a steak
lunch at Peter Luger," Batteria says. "Some clients would be much more
interested in being invited to an art event
instead."
Pam Danziger, author of Let Them Eat Cake: Marketing Luxury to the Masses as Well as the
Classes, also makes her living selling research on
affluent consumers. Her Stevens, Pa., firm, Unity Marketing, conducts
quarterly surveys that analyze a sample of the top quartile of U.S. households
based on income. Like Samuel, she has devised a taxonomy of affluent
individuals. Among her categories are "butterflies," whom she describes as the
most highly evolved people—individuals such as Oprah Winfrey, Buffett and Gates.
"These are people who buy a lot of things, but they know that these things are
not going to make them any happier," she says. The market for this research is lucrative: The consultants
often command $35,000 and up for their analyses, and their fees can spiral
to tens of thousands of dollars more depending on the scope and complexity
of the project at hand. "This is such a powerful segment of the economy, and
there are a lot of firms that are trying to jump on the bandwagon," says Ron
Kurtz, president of the American Affluence Research Center, a traditional
market research company in Aventura, Fla., that focuses on the top 10 percent of
the most affluent households in the U.S. Despite the growing number of firms
performing this type of work—Kurtz has been studying the market for the past 20
years—he has not noticed any significant decline in the number of affluent individuals willing to respond to his surveys, which typically run
four pages. However, the appetite for this kind of information is not
limitless. Don  Wiegandt, a managing director for JPMorgan Private Bank in
Los Angeles, sees a steady stream of wealth studies cross his desk, hawking
theories about the clients he serves. He admits to reading them, but says he
uses them only as a "gut check" of what he witnesses in his day-to-day work.
Sentient’s Vaughan says he receives calls every week from sundry marketing firms
flogging their research. But people like Samuel, whose firm previously concentrated on a
wide range of income groups before focusing exclusively on the affluent
beginning in 2004, are unlikely to be deterred. He argues that while chatting
with your doorman, he has your best interests in mind. "It’s important for me to
have a better understanding of the high-net-worth individual so that my clients
can have a better understanding," he says. "It’s not insidious at all. Really,
it works to the client’s advantage." Michelle Leder is the author of Financial Fine Print: Uncovering a Company’s True
Value.
Illustrations by Gary Hovland.
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