The affluent with substantial liquid assets are strongly inclined to use a number of financial advisors. For them, this is a form of diversification—a lesson they learned well from the financial advisory industry.
Despite this tendency, you can effectively gather a greater percentage of your wealthy clients’ assets.
Asset capture is important because it not only results in more revenue, but also does so without adding any substantial cost. Garnering more assets from your current affluent clients amounts to picking off the low-hanging fruit.
If your investment performance is consistently outstanding, then you will tend to find that you will often not need to solicit your affluent clients for more money to invest. Instead, they’ll usually be happy to give you what they can. In this scenario, you are delivering investment performance. Likewise, if your investments perform poorly, you would likely lose assets and affluent clients.
For the overwhelming majority of financial advisors, however, consistently outstanding performance is not the norm. If this is the case with you, then you are going to have to ask for more money to invest from your wealthy clients.
But this leads to a problem for most advisors. Very few of them ask their clients for more money to invest because they don’t know how to ask.
Many financial advisors are uncomfortable asking the question. They wrestle with the question of who to ask, and when.
There is, however, a right way to ask for more assets and it can be approached in four steps:
Step #1: Create loyal, affluent clients. Exceptional investment performance is a factor in motivating affluent clients to give more money. But the average advisor who delivers average performance can still gather assets from clients by adding value in other ways. In short, make your clients loyal to you by providing other services.
Step #2: Identify asset transfer opportunities. To devise a strategy, you first need to know which of your clients has more assets you could be managing.
There are two types of asset transfer opportunities. One entails identifying a client with a pool of liquid assets you’re not managing and adroitly tapping into it. Of course, you first have to find this pool of money. The best way to do this is by having a deep understanding of the wealthy client—something attainable by being involved in their estate and retirement planning.
The other asset transfer opportunity is structural. For example, significant swings in the stock market can provide you with an opportunity to talk to your affluent clients and recommend they entrust you with more of their money.
Step #3: Ask for additional assets. With only about one in 10 financial advisors asking for more money to invest, the odds that the other nine are not going to get any if you’re the one doing the asking. Without question, asking for more business will do wonders for increasing your chances of getting more money. When you ask clients for additional assets to manage, you need to focus and position your service based on what is important to them.
Step #4: Say “Thank you” and reinforce the asset transfer decision. Far too many financial advisors, upon receiving more money to invest, become very impressed with themselves; they fail to appropriately thank their wealthy client for the opportunity to provide outstanding service. You need to let them know you greatly appreciate the belief they have in you.
By mastering the asset-capture process, you can grow your business by enhancing your client relationships. It’s a methodology all investment professionals should be employing.
