If the last 18 months have taught us anything, it’s that we constantly need to upgrade and improve our strategies, our positioning, and the ways in which we interact with our clients. It’s absolutely critical that you stick with “offense” activities, pay attention to expanding your business, and refuse to get bogged down in a defensive “bunker” mentality. A key offense activity is to capture additional assets from existing clients.
Four Things We Know
It’s understandable if your reaction so far is something like this: “What? You want me to approach my clients — who’ve lost a substantial percentage of their assets — and ask them for even more of their assets?” But before you put this magazine down and start doing a Sudoku puzzle, remember that with this and other strategies to increase your business, it’s essential to think outside the box. Let’s start, then, by considering what we already know about capturing additional assets from existing clients.
First, we know that it’s far easier to get additional assets from existing clients than it is to find new ideal clients. As a matter of business common sense, prospecting for brand new clients, especially affluent ones, takes more time, money, and overall effort than it takes to approach and succeed with existing clients who already know you, have a relationship with you, and are used to doing business with you.
Second, as a corollary to this first point, we know that by focusing on asset capture, you’ll very likely improve your profitability and efficiency. That is, if you are successful at capturing additional assets using the approach described later in this column, then given how much easier it is to do this than it is to find new clients, your profitability and efficiency will naturally and necessarily increase as well.
Third, as the first chart shows, we know that the majority of advisors — 51.1 percent — ask none of their top 50 clients for additional assets. The percentage of advisors who ask more than three-quarters of their top 50 clients for additional assets to manage is…a big fat zero.
Fourth and finally, we know that if you ask, you may receive, and if you don’t ask, you won’t receive. CEG Worldwide research, as well as numerous reports from advisors in our coaching programs, confirms that this offense activity often yields significant positive results. For example, of those advisors with incomes over $300,000 who asked their top 50 clients for additional assets, 44.1 percent did in fact receive additional assets from between 25 percent and 49 percent of those clients.
Show Me the Money
Where, in today’s tumultuous environment, are new assets likely to be found?
First, even today, new money is still coming into people’s lives. There are inheritances, bonuses (some companies are still doing well), and raises. As for raises, regardless of how small they are, it’s perfectly legitimate to point out to clients that they can often save 50 percent of any raise, thereby adding to their investment accounts at a time when equities are cheap, without decreasing their standard of living. Additionally, clients often receive substantial sums through early retirement, regular retirement and severance packages. Clients also continue to sell properties, businesses and other valuable assets.