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Consolidating legacy accounts, receiving a windfall from a will, selling off assets such as real estate are all opportunities for an advisor to expand a relationship with an existing client. They all start with fundamentally understanding the needs and goals of the client while gaining insight into their entire financial situation, providing the ability to identify consolidation opportunities. This untapped potential includes opportunities with “held away” assets, or with illiquid investments, such as 401k accounts, family businesses, real estate and more, that will eventually become AUM opportunities. By becoming and maintaining trusted status sets an advisor up to go deeper with clients, enabling you to not only enhance the client experience, but to also see and better understand a broader picture of your client.
Expanding Products and Services
While not for every firm, a good strategy to expand wallet share is to expand your offerings. Whether that be through integrating comprehensive financial planning to span the client’s entire financial situation; to being able to offer HNW investment products, such as alternative investments, or even offering business valuation services to better serve your business owner clients, setting you up to benefit from any potential sale.
Offering other planning services such as retirement, risk management, and or tax planning are additional avenues a firm may travel when seeking to deliver a more comprehensive solution set to their clients, and may come with different products that the client may desire and drive them to consolidate more of their assets with you. Additionally, with the expansion of access to fee-based insurance and annuity products, as well as to private lending capabilities and cash management services customized to the RIA business model, there has never been a better opportunity for firms to expand their offerings to both sides of the client’s balance sheet, significantly increasing wallet share.
Lastly, understanding where a client is in life and the impact of certain events is another way to help the client think about how they want to be prepared for the future and how they may want to think about their entire portfolio. Particularly with retiring baby-boomer clients, offering retirement income planning advice opens the door to managing rollover AUM opportunities.
Consolidating Investment Accounts
For clients that may have multiple investment accounts, educating them on the benefits of consolidation is not only prudent, but could also make their life simpler. Consolidation not only simplifies financial management but also enables better coordination of investment strategies and ensures comprehensive planning, as well as more holistic investment advice and better portfolio management. By educating clients on the advantages of consolidation and your ability to leverage technology to provide a complete solution, you can increase wallet share while solidifying your role as their primary financial advisor.
Conclusion
According to various studies[1], the average share of wallet for financial advisors is roughly 55%, meaning that there is ample opportunity for firms to turbo charge their organic growth just by consolidating the various assets held away from their existing relationships. As one of the lowest cost levers of organic growth, focusing on wallet share gain can be a great place to start your growth plans. Simply by better understanding your clients, their needs, and having the big picture view of their entire financial situation through the financial planning process provides you not only with the opening to pinpoint opportunities and articulate actionable benefits, but also to deepen relationships, gain trust and provide client confidence in simplifying their lives with you as their primary advisor.
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[1] https://www.cerulli.com/press-releases/over-half-of-retail-investors-prefer-to-consolidate-their-financials-to-a-single-provider; https://insurancenewsnet.com/innarticle/how-to-increase-investor-share-of-wallet