"Most advisors simply fail to ask for additional assets to manage. And if you don't ask, you don't get."

Time to Grow

By Patricia J. Abram

The logic behind capturing additional assets from existing clients is both powerful and simple: It’s clearly better for both you and your clients if you have more (or all) of their total portfolios under your management. Consider the following five points:

• Most of your clients have additional assets that could be invested with you.
• Bringing over additional assets from existing clients is far easier than finding new clients.
• Proper asset allocation is most effective when clients have most (or all) of their assets under one advisor.
• The major stumbling block that prevents advisors from capturing additional assets is simply… not asking for those assets!
• The easiest way to ask is to set up a systematic program. Regularly offer your clients a free total portfolio analysis.

Begin by recognizing that very few clients have all of their assets with only one advisor. Additional investable assets are mainly of three types:

1. "New money" (inheritances, retirement plan distributions, bonuses, commissions, savings, etc.), which is often simply parked in a CD or money market account and essentially forgotten about;
2. Money in self-directed investment accounts; and
3. Assets managed by other advisors. As the chart on the next page shows, the greater a client’s investable assets, the more likely it is that they have multiple advisors.

Assuming that you are providing excellent service and effectively addressing your clients’ long-term needs and goals, it makes sense that it's easier to bring in additional assets from these clients than to develop entirely new clients.

These clients already rightly trust you, and since you will be able to do a better job for them if you manage their entire portfolios, you can feel quite good about leveraging these relationships. Participants in CEG Worldwide's coaching programs confirm that advisors who are willing to ask their clients for more of their assets have greater success.

Why, then, is it better for your clients to have more (and ideally, all) of their investable assets under your purview? First, affluent clients want their financial lives simplified, preferring a single point of contact for all their financial concerns. Second—and this is the key point—having investable assets under the control of several different advisors often leads to duplication, over-concentration, and improper asset allocation.

To achieve proper asset allocation for your clients, you must be fully informed about their complete portfolio. Only when all of the client's assets are under the management of a single advisor can a coherent and coordinated investment strategy be implemented. Lastly, clients typically save management fees by combining all of their assets under the control of just one advisor.

So, if gathering all of a given client’s investable assets under one trustworthy roof is better both for you and the client, what stops most advisors from moving in this direction? Most advisors simply fail to ask. And if you don't ask, you don't get.

For some advisors, the problem is "call reluctance"—an unwillingness to pick up the phone or set up a meeting based on a fear of rejection or a sense that asking for more assets is somehow inappropriate. Many advisors simply fail to recognize the benefits (for themselves and their clients) of asking for additional assets, and as a result have not worked this dynamic into their business practices and systems. What does an ongoing program look like that will enable you to easily and naturally broach the subject?

First, from your initial discovery meeting onward, educate each client about the immense value of proper asset allocation. At the same time, explicitly set the expectation that if you provide the kind of investment services you promise, then the client will, over time, be willing to move all investable assets over to you.

From the very beginning, strive for a detailed understanding of your client’s total portfolio, including who their other advisors are and what their investment philosophies are. Note that some (extremely successful) advisors will refuse to accept "partial portfolios" from new clients on the grounds that such portfolios make proper asset allocation impossible.

Second, on a systematic basis, offer your clients a free total portfolio analysis. I suggest saying something like this:

"We started working together two years ago, and since that time we've moved well along the road to meeting your long-term financial and life goals. I'm concerned, however, that having significant assets with other advisors may be counteracting what we are doing for you.

"Some of your investments may be over-concentrated, raising your risk and working against your long-term strategies. As part of our services we offer a free total portfolio analysis to all of our clients, to ensure that their portfolios don't have too much concentration, duplication, or improper asset allocation. Would this analysis be beneficial to you?"

Everyone likes being offered a valuable free service (and virtually no one is offended by such an offer), and most of your clients will have you go forward.

After obtaining sufficient records and performing the analysis, you might say to your client, "Everything looks great, and there’s no need to make any changes." But, in most cases, you are more likely to be able to truthfully say, "To achieve a proper asset allocation, we recommend that you move such-and-such assets under our management." If the client agrees, implement the transfer. In any case, thank them for their business.

There are other ways to capture additional assets from clients. You can, for example, raise the minimum amount of assets that you will work with. If you're doing a good job, most clients will find a way to meet your minimum.

Moreover, you need to know in your bones that not only do your clients have additional investable assets, but that bringing those assets over to you enables you to do your job better. In most cases, all you need to do is put into place an ongoing system that makes it easy to ask, and then go ahead and do the asking. It’s the logical thing to do.

Reprinted from: RESEARCH MAGAZINE