"Advisors who consistently provide exceptional returns for long periods are an extraordinarily rare breed. If you stake your success on being able to do so, you'll likely lose both assets and clients when your investment returns eventually falter."

Just Ask!

By John Bowen

There is no shortage of strategies out there designed to bring qualified prospects to your door. And certainly, adding new clients is an effective way to grow your revenue and income.

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But with so much of their energy focused on prospecting, advisors often overlook the other route for growing their practices: acquiring additional assets from their current clients. This can be much more effective for two compelling reasons:

• It's far easier to get additional assets than it is to get new clients. Prospecting is expensive and time-consuming, with no guarantee of success. Asking for additional assets from existing clients costs nothing, takes only a few minutes and has a high probability of success.
• Asset capture offers great potential for growing your business. We recently identified 41 advisors who had received no additional assets from their wealthy clients in the previous two years. After receiving training in the asset-capture process, every single advisor in the group added new assets from existing clients, increasing their total assets under management from 15 percent to a high of 256 percent.

Imagine if you, too, were able to capture an additional 15 percent to 256 percent from 10 of your best clients, each of whom currently has $1 million with you. This translates into an additional $1.5 million to $25.6 million in assets—all from your existing clients. Sound better than giving yet another presentation to a roomful of prospects who seldom become clients? It should.

Don't Ask, Don't Tell

Of course, you may believe that you already manage most or all of your clients' assets. Most advisors do. A recent survey of 512 advisors conducted by Russ Alan Prince, CEG Worldwide's senior managing principal, found that more than four out of five advisors—81.6 percent—believe that they manage all their clients' investable assets.

In fact, it's highly unlikely that you do. We know this because we know that most affluent clients have more than one financial advisor.

Relatively few clients who have more than $1 million in investable assets have just one advisor—only 28.9 percent. The average number of advisors per client increases right along with investable assets. On the high end, more than half of clients with investable assets between $2 million and $6 million have, on average, three or more advisors each.

Alternatively, you may believe that you don't need to ask for additional assets because you provide superior investment returns. You believe your track record should speak for itself. It's true that if you have consistently outstanding investment performance, you probably won't need to solicit your clients for additional assets—clients will be motivated to give you more assets without your prompting.

However, advisors who consistently provide exceptional returns for long periods are an extraordinarily rare breed. If you stake your success on being able to do so, you'll likely lose both assets and clients when your investment returns eventually falter.

Whatever the reason, we know that few advisors ask for additional assets. During the past six months, just 11.9 percent of advisors had asked for more money to invest. Many of the remaining advisors, as I mentioned before, may believe—incorrectly—that they already have all of their clients' money. Others are simply uncomfortable asking.

Getting More

In any case, having a systematic process in place will help you get past the obstacle. I recommend the following five steps to maximize your asset-capture potential.

Step 1: Know your clients—and their assets. Your discovery process with each affluent prospect should cover seven areas of importance to that particular prospect: values, goals, relationships, interests, assets, advisors and process. Two of these seven categories concern the prospect's assets and other professional advisors (including other financial advisors).

If you've conducted a thorough discovery with each prospect, you'll have a complete picture of their total assets and who is managing them. When it comes time to request additional assets, you'll be able to specify exactly what you're asking for.

Step 2: Ensure client satisfaction. This is very simple: Clients who are happy with the service they have received and the relationship you have built with them will be inclined to give you additional assets. If clients are unhappy with your service or their relationship with you, focus on providing a world-class service experience for every wealthy client. This means raising the bar to deliver a unique and memorable experience. By creating processes that ensure a consistent, high-quality experience at every point of contact, you will satisfy even the most demanding clients.

Because client satisfaction is crucial to gaining additional assets, it should be a top priority to improve and maintain your interpersonal relationships with affluent clients. If you use a systematic and fully developed consultative process, this task is already built in to all your interactions with clients. Part of your consultative process should include regularly scheduled progress meetings that provide you with the opportunity to repeat that you are interested in your clients' overall well-being, which includes taking into account the ways other financial advisors are managing their assets.

Step 3: Identify asset-transfer opportunities. A number of triggers provide openings for a transfer of assets. These include any meaningful changes in a client's life (such as a divorce, remarriage or the birth of a child or grandchild) or in the client's portfolio (such as a retirement rollover or inheritance).

There are also structural triggers that provide you with asset-transfer opportunities. These include substantial changes in the market (such as a major upward or downward swing) or in tax law (such as changes in estate taxes). All of these are excellent times to approach affluent clients about moving additional assets to you.

Step 4: Ask for additional assets. Once in a great while, a satisfied client, prompted solely by the high-quality nature of your relationship, may come to you with additional assets. However, for the most part, you'll still need to ask for those assets.

Set the stage for asking by offering to do a diagnostic review of all accounts, including those with other firms. Ideally, you'll make this diagnostic part of a complete investment plan. Explain that the only way to ensure a balanced portfolio that is well structured to achieve clients' goals is through a comprehensive review of all investments. Remind them it is your job to understand where they are now and where they want to go, and to formulate the actions that will get them there. Few clients will say no to this offer.

After the diagnostic review and the resulting updated investment plan is complete, schedule a meeting to deliver the results to your client. Where it's appropriate, recommend transferring assets to you. Explain how the client would benefit from such a transfer (such as increasing the efficiency of the portfolio, reducing risk, lowering tax liability or reducing fees). If the client agrees to the transfer, arrange to have the necessary paperwork swiftly completed to accomplish the transfer.

If your diagnostic review shows that it is not appropriate for the assets to be aggregated with you, be sure to point that out. Doing so will reinforce your role as the trusted advisor.

While many advisors feel uncomfortable asking for additional assets, there are several issues to keep in mind that should make it an easier discussion for you:

• If you've done your job in delivering high-quality service and cultivating a high-quality relationship, your clients will be satisfied with you. This means they have plenty of reasons to give you more assets.
• As a result of your in-depth discovery with your clients, you will already know what other assets they have and will be able to indicate exactly what you're asking for.
• You will only ask clients for those assets that are appropriate for you to manage and to which you can add significant value.

Step 5: Thank your clients. Let all clients know that you appreciate the trust they've placed in you—whether or not they have given you additional assets. Let them know how much you appreciate the opportunity to serve them and help them reach their financial goals, and that you appreciate the faith they have put in you.

Our research data shows that when advisors do ask for additional assets, they generally are successful in getting them. This means that there is a gold mine waiting for you in your client files—yours for the asking.