Close Close

Practice Management > Building Your Business

7 Ways Advisors Can Add Clients, Stay Relevant

Your article was successfully shared with the contacts you provided.

At first glance, it looks like financial advisors have it made. Demand is growing for their services while the supply of advisors is falling due to retirement. The Bureau of Labor Statistics forecast a 27% increase in financial advisor jobs through 2022 — more than twice the growth of employment overall.

But dig a little deeper and the outlook is not so rosy. There’s the proliferation of robo-advisors, millennials who want advice but don’t have a large chunk of investable assets, a shortage of new talent, a rush of new technology that adds efficiencies but takes some adjustment, and increasingly, more consolidation.

“Change is happening at a very rapid rate,” says Brian Leitner, vice president of practice management for Mariner Wealth Advisors, an independent, multi-service financial advisory firm. “There’s a lot to tackle all at once.”

Leitner was part of a panel on the future of financial advice at last week’s Morningstar ETF conference, along with Jim Crowley, who oversees Pershing’s broker-dealer business, and Vincent Tiseo, global head of business practices at Goldman Sachs Asset Management. Morningstar’s Tricia Rothschild moderated the panel.

All three panelists agreed that advisors today need to focus on the value proposition of their business — what they charge for the services they provide — in order to retain and grow their client base, which will also help if they want to sell their practice in the future.

That “value proposition has traditionally been driven by amount of assets clients to bring to the table, but it really should be driven by the value we [the advisor] brings to the table,” Crowley said.

Here are some of the key themes advisors need to consider, according to the panel:

1. What services you provide and what you should you add. If your focus is financial planning and investments, should you add tax and trust services or stick with your current mix? “Decide where you are today and where you want to get to,” said Leitner, whose firm is structured around being a one-stop shop for clients, offering accounting and legal services in addition to investment advice.

Tiseo of Goldman Sachs suggested that advisors focus on “two or three core needs of clients,” then make incremental changes, to grow along with clients’ changing needs. “You have to deliver on investment side, then on service level, then on the relationship level,” he said. 2. Align your fees with your services. “If your fee structure is 1% and your asset management fee is 25 basis points, what are you doing for the other 75 basis points?” asked Leitner, who sees the industry moving to flat fees. In addition to percent of assets under management and flat fees, advisors might want to consider hourly fees, which may appeal to clients who don’t have a large amount of investable assets.

At the same time, noted Tiseo, “Clients are willing to pay for good advice, older and younger.” Crowley said he’s even seen wealth managers increase pricing, based on the value to their client.

3. Attract millennials as employees. “You need millennials to relate to millennial clients,” Crowley said. The key is adopting strategies to attract millennial employees.

To that end, Pershing has started a reverse mentoring program where he meets with millennial employees every other week and, said Crowley, “They mentor me.” Pershing has also handed over the firm’s employee engagement program to two of its youngest staff members, who “came up with ideas I would never have,” he said.

Leitner’s firm Mariner Wealth Advisors has “think tank” group of millennial employees who meet regularly among themselves without management, allowing for open sharing of opinions and ideas.

4. Attract millennials as clients. In addition to hiring younger employees, advisors should consider investments that appeal to millennials such as socially responsible investments (SRI). Tiseo expects that there will be a big push for these investments in the next three to five years as they appeal to “a personal benchmark” for millennials — “what’s important to them, a personal, not an industry benchmark.”

5. Attract more female clients. Women are 51% of the work force and have more wealth than males,” said Crowley, explaining why financial advisory firms need to attract female clients. His firm has a Women’s Initiative network, providing networking and mentoring opportunities for women along with development of leadership skills.

At Mariner Wealth Advisors, about half of leadership roles are held by women. 6. Embrace robos, don’t fear them. “Robos can give you scale and efficiency so you can spend time in front of your clients,” said Crowley. He and other panel members said advisors should not be concerned that robos will replace them. Just like WebMD didn’t put doctors out of business, robo-advisors won’t replace financial advisors, said Crowley. Rather, they “will expand the market for all of us.”

“Robos are an efficiency tool not just for the emerging affluent,” said Leitner, adding they are even useful for the $10 million client. Robo applications will become “part of your back office, part of your overall technology platform.” They’re also a good way for advisors to grow that part of their business that services smaller accounts, said Tiseo.

7. Be involved in your clients’ lives. This is a primary reason robos won’t replace advisors. They can’t provide a personal interaction or emotional connection. “Seeing a client in person tells a whole lot more than anything else,” said Leitner. He told a story about a pro athlete prospect. At their first meeting, Leitner asked the potential client to bring three pictures of the most important things in his life. Included among them were a picture of his mother and the park bench he lived on when he was down and out. “It had nothing to do with investments,” said Leitner, adding that he learned more about what the althete wanted and needed from a financial advisor than any more traditional meeting would provide. 

He and other panelists said advisors need to take a multigenerational approach to clients — getting to know clients and their children. “You want to talk to the next generation” and “walk though Mom and Dad’s financial plan so the kids understand where the money will flow.” Not only will that help your current clients, said Leitner, but it will also increase your chances to advise their children and possibly their children’s children.

— Related on ThinkAdvisor:


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.