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Further Recovery

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In my last column, I detailed the steps I would go through to pencil in offensive and defensive business goals. I created a spreadsheet to help you calculate these under different investment performance assumptions. The spreadsheet and a copy of that column are available at Choose the link, “Free Two Year Marketing Plan.”

I posed offensive and defensive goals for a mythical FA with $40 million in AUM. My assumptions were:

  • Offensive Goal: Double in two years.
  • Investment performance over two years: 0 percent.
  • New AUM/mo. to hit goal: $1.67 million.
  • Defensive Goal: No reduction in income.
  • Investment performance over two years: minus 10 percent.
  • New AUM/mo. to maintain revenue: $320,000.

The key questions: Are the goals realistic? If so, how do we move from a goal to a plan? A goal is not a plan.

Channeling New Assets

By “channeling new assets” I mean identifying sources or channels by which you would acquire new assets. To do this, we will analyze the business of our mythical FA with $40 million AUM. I’ll name him, “Justin Case.” How might Justin proceed?

The first and most obvious channel is additional assets from current clients. Of all the advisors I have met — and it’s many thousands — very few have controlled all client assets.

A client marketing goal should be: become or remain sole provider for all financial advice, services, and products purchased by your clients. Here is a plan to capture assets you don’t have:

  • Provide good investment advice. (That’s a given especially today.)
  • Identify those clients for whom you do not have the “trusted advisor” relationship. For each, create a series of contacts designed to deepen the relationship. These can include additional education, introducing them to people they need to meet and, most importantly, creating a much deeper profile so you can provide exactly what this client needs. (As the trust level deepens, assets held outside the firm flow in. How many trusted advisors does someone need? One per category. You don’t need two dentists. Your client should not need two or more financial advisors.)
  • Maintain top-of-the-mind awareness through a disciplined communication process.
  • Find and track all outside assets held by each client.
  • Move lower-performing and under-managed assets one asset at a time.

The question is: How much of the $1.67 million we need per month can we realistically expect from clients?

It’s time for some educated guesses. A starting point is: Assume you control half your clients’ liquid net worth. Do you think it’s more than that, or less than that, or about 50 percent? Fill in these blanks:

I believe my clients hold $_____ that I don’t control.

By following the five-step Asset Control Formula, I can get ___ percent of that over a two year period.

For Justin’s case, the answers were: $30 million and 50 percent. That’s $7.5 million a year or $625,000/mo. Maybe that’s not realistic. So let’s cut it to $500K.

That leaves Justin needing to raise another $1.17 from somewhere. Possibilities: referrals from current clients; introductions (not the same thing as referrals); networking; strategic partners; seminars; cold calling/cold walking; direct mail. Let’s analyze each of Justin’s remaining channels.

Referrals from Current Clients

Justin has 200 clients who provided a total of seven referrals, and $2.25 million in assets. Quite frankly, that’s a referral deficit.
Bill: What are you doing to develop referral business?

Justin: Trying to stay in touch and do good service.

Translation: Nothing.

A detailed referral marketing strategy, based upon my “Promote Referrals” concept should produce 5 percent of a client base in year one, and if continued meticulously, 10 percent growth in client count in year two.

So let’s assume Justin begins promoting referrals. I would forecast 10 new clients in 2010, and 20 in 2011.

If the average of roughly $325,000 per new client holds, in year one Justin will bring in $3.25 million, or an average of about $270K per month.

We still have to raise $830,000 per month. We need at least one more channel, maybe two.


There is tremendous confusion in this industry over two related but different methods of client acquisition. A referral is a name volunteered by a client. VOLUNTEERED! Therefore you cannot (and must not) ask for referrals.

When you ask for referrals, you don’t get them. You get names instead. You put the client on the spot. Rarely do the names become clients.

You can ask for an introduction so long as you ask to meet someone you know the client knows.

Situation: You read that Dr. Barbara Bouncer, a top plastic surgeon, won the ladies amateur championship at your club. Your client, Dr. Anita Cathider, is also a plastic surgeon. In reviewing your notes, you see Dr. Cathider also has hospital privileges at Mercy Hospital where Dr.
Bouncer practices. You know she is also a passionate golfer as are you and your partner.

FA: Oh, Anita, I’ve been meaning to ask you. One of the people I have wanted to meet for a while is Dr. Barbara Bouncer. An article I read said she won the ladies amateur tournament at Slopchoppy Country Club. How well do you know her?

Anita: We have lunch together once or twice a month.

FA: Hmm. You play golf. Dr. Bouncer plays golf, and Jim and I play. Are you going to play anytime soon?

Anita: I try to play every Wednesday afternoon.

FA: What if we put together a foursome. I’ll bring Jim and you bring Dr. Bouncer. She will certainly beat Jim and me badly, but this gives us a chance to meet her. Would you ask her to join us?

This works when: The quality of the relationship is very good; you ask for an introduction to a specific person; and you know enough about each to suggest a venue of strong interest.

It’s time for some more educated guesses. If Dr. Cathider has a $500,000 account, on average, so will Dr. Bouncer. Therefore, our forecasts are based on that well-established marketing principle: birds of a feather flock together.

Justin’s top 25 clients have a minimum account size of $350,000, and an average of $750,000. Most started at about $350,000. A couple of sporadic introductions over the past few years have averaged $500,000. So we will go with that figure. It’s possibly small, but we want to err on the side of too little, not too much.

Our “introductions” goal is to meet 25 well-connected client connections. Some clients will produce more than one. Others: none. One in five introductions should close.

For Justin, then, we would forecast five new clients from introductions bringing in $2.5 million. That’s an average of about $200,000/mo., still leaving us with still nearly $630,000/mo. to raise.

Pick Another Channel

Our remaining choices are: strategic partners; seminars; cold calling/walking; direct mail or other mass media, such as radio.

If I were in Justin’s shoes, my thoughts would go like this: I need one or two hefty new clients a month. It will take at least a year to develop those from strategic partners. I’ll start now on developing a stable of maybe six partners, and assume they come onstream in year two.

My choice, then, is a mass marketing channel. Since I’m a decent speaker, I’ll first try seminars.

Bill Good is chairman of Bill Good Marketing. His Gorilla CRM System helps advisors double their production or work half as much. Visit