During a presentation a few months back, I asked the assembled group of newly-licensed registered representatives to identify the top five niches of potential investors. Their shouted collective response was: attorneys, accountants, physicians, dentists, and corporate executives. Not surprisingly, all of these niches represent "white-collar" professions...none were of the "blue-collar" variety.
This bias reflects the bias of the financial services industry, the society at-large, and of many of our parents too. Growing up we all heard about the importance of getting a good education. "Blue-collar" work, coveralls, calloused hands, muddy work boots, and lunch pails was not an appropriate path for anyone desirous of societal status. Heaven forfend the person who expressed a desire to become a welder, machinist, or auto mechanic.
In 2005, this is an out-dated notion. While many of the "white-collar" professions are outsourced across the globe, the humble "blue-collar" tradesmen and women are earning six-figure salaries.
In large part, this is a simple function of supply-and-demand. It is also an outcome of today's fast-paced U.S. economy, where the distinction between traditional boundaries in the "blue-collar" workforce are constantly blurred. As the U.S. economy evolves, the distinctions between operator and manager, machinist and engineer, architect and carpenter, is becoming increasingly fuzzy. Jobs that once required nothing more than backbreaking manual labor now demand specialized math, computer and science skills. These demands have diminished the pool of qualified workers, which have led to a labor shortage of crisis proportions. Many companies are taking to extreme measures to recruit new employees: going out of state, attending high school and junior college job fairs...reaching out to women, immigrants, laid-off airline workers, etc.
With the demographics of the workforce, this is a trend that is likely to continue. Consider manufacturing. 80% of manufacturers have a serious shortage of production workers, machinists and craftworkers. By the year 2020, manufacturers will need as many as 10 million new skilled workers to replace the aging baby boomers who compile the majority of the 14 million manufacturing jobs today.
Here's a test. The next time you visit your dentist (or physician or accountant), ask them how many solicitations, phone calls or direct mail pieces, they have received from financial service concerns over the past week. Contrarily, ask the welding technician at a local oil refinery who is making $100,000 per year, the same question. My guess is that there will be no comparison in the responses.
Here's the other secret. Financial advisors want to work with clients who have accumulated, or are accumulating, financial assets. More often than not, this means working with clients who have good SAVING habits. Too often, "white-collar" professionals with very high incomes have very little in the way of savings. Although their spending habits are first-rate, their savings habits are non-existent. Sadly, in this age of conspicuous consumption, spending tends to rise in accordance with one's income, regardless as to how massive one's income is (Exhibit A: Michael Jackson). The point to be made is that individuals, who have decent salaries and EXTRAORDINARY savings habits, can accumulate significant savings over the course of their life.
For those financial advisors who want to be a tad contrarian, and think "outside the box", do not ignore: machinists, auto mechanics, heavy equipment operators, welders, or cement masons. You might need more of them to build your $100 million book-of-business...yet you will certainly find that the queue knocking on their doors, is much shorter.
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