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Capturing More Assets

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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.

Also, as the second chart shows, the affluent often have multiple advisors. Especially as total portfolio size rises above 1 million in investable assets, clients often have two, three or more advisors. As we’ll now consider, there is a strong argument to be made in favor of consolidating those assets in the capable hands of a single advisor who can assess the overall positioning and asset allocation of an affluent client’s accounts.

The Free Total Portfolio Review

Ask yourself why your affluent clients should give you more of their assets to manage. What about what you’re offering is compelling enough to induce your clients — especially those who have money with more than one advisor — to switch some or all of those additional assets over to you? Most clients have multiple advisors because they believe they are creating a kind of “diversification safety net” by doing so.

Therefore, you can approach your affluent clients like this: “Mr. Client, if you are like most of my successful business owner (insert your own niche client profile) clients, you probably have multiple advisors; that is, you have money with people other than me. Undoubtedly, you see this as a form of diversification; is that correct?” When your client agrees, you then say, “Have you considered, however, that without someone overseeing the entire landscape of your portfolio, that is, how all of your assets are invested, you may in fact be increasing rather than decreasing your risk through over-concentration or conflicting strategies? What I’d like to offer you, then, is a free total portfolio review to make sure you’re not over-concentrated in any one area, thereby increasing your risk, and that your assets are not positioned in conflict with your long-term goals.”

Many clients will agree to your offer of this free service. Once you’ve conducted the review, if everything is fine with the client’s accounts, then go ahead and tell the client just that, but request the ability to continue to check in on the client’s positions and results from time to time. The perception such clients will have of you will go sky high: They’ll see that you’re a straight shooter who gave them an honest assessment, and the next time they receive additional money from an inheritance, a bonus, the sale of an asset, etc., those assets will be much more likely to come to you.

Alternatively, if you find areas of your client’s portfolio that are in trouble, i.e., either the client is over-concentrated, or the client’s cumulative risk over multiple accounts is not in alignment with stated goals and risk tolerance, then you’ll want to make recommendations as to how the client’s portfolio can be realigned to lower risk while still achieving the client’s long-term goals. Since you’re the one who’s been in contact with the client, has discovered the problem, and is offering the solution, it’s very likely that the client will agree to bring those assets over to you.

Walking the Talk

In times of crisis like these, there are still far too many advisors who are hiding from their clients, providing inadequate support and offering no new ideas. Unfortunately, human nature is to avoid confrontation and conflict at almost any cost (e.g., the possibility the client will leave), and for many advisors it’s simply easier to lose a client than it is face that client’s disappointment or anger.

But if you are one of those advisors who has held steady with or even increased your level of client contact, then you’re the one whom your clients will bring any new assets to. What we’re advocating, then, is to work the opposite side of the psychological dynamic described above; that is, you need to be out there regularly talking to your clients. That means you also need to have something to say: You just can’t call to commiserate; you have to offer new ideas and realistic solutions to problems.

Given today’s economic realities, virtually every client needs to redefine his or her risk tolerance. Offering the free total portfolio review described above as a part of that risk tolerance review is a superb strategy both for staying in regular contact with your clients and for creating a golden opportunity to ask for and capture additional assets.

Patricia J. Abram is a senior managing partner with CEG Worldwide in Florida; see


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