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Winning More Assets, Not More Clients

By Miriam Rozen August 15, 2013

Most advisors labor mightily to add clients when they want to grow their practice. But persuading existing clients to bring in additional assets can be a more cost-effective way to boost revenues, some say. Given how much time it takes to find and onboard new clients, the idea of increasing market share without going through those steps has obvious appeal.

It’s not a slam dunk, by any means. For one thing, only naïve clients will bring every last dollar to an advisor they haven’t been working with for very long. You can’t start right in with “I met you yesterday, and I want to take all your money,” says Sarah Casey, an advisor at Mason Investment Advisory Services in Reston, Va., which has $2.9 billion under management.

Casey says her firm often gets 100% of clients’ investable assets. “One of the reasons we are so successful at that is because we do comprehensive financial planning, and we know our clients,” she says. “We have very long-term relationships.”

The firm also charges for wealth management on a sliding scale: The more assets clients bring in, the smaller the percentage they pay in fees. Casey says she doesn’t hesitate to remind clients, who may fail to focus on the fine print, that a bigger asset balance will trigger a fee advantage.

Still, says Casey, “there are going to be people who will say to you, ‘I will never have 100% of my money with any firm.’”

Opposite Approaches

Heydon Traub, CEO of Traub Capital Management in Needham, Mass., which has $145 million under management, understands that point of view. If a client has $20 million or more in assets, Traub says, the cost of paying multiple financial advisors is small compared with the benefit of exposure to several investment approaches. So he handles the topic gingerly with his clients. “At the end of the day, it’s the client’s money, and we don’t want to push hard and annoy the client,” he says. He will try to explain the advantage of allowing a single firm to quarterback a far-flung, complex financial strategy. “We lay out the facts,” says Traub. “It usually takes time.”

Heydon Traub
For Lynn McIntire, a principal at Cadent Capital, an independent affiliate of Raymond James Financial Services in Dallas with $240 million under management, comprehensive wealth management means constantly checking up on the performance of clients’ assets that are “held away.” An advisor who continually asks about the health and welfare of accounts at other firms may gradually be seen as the client’s overall financial caretaker, she says — and transferring assets is the next logical step. “We never require or demand 100% of the assets when we begin working with the client,” says McIntire. But “over time, based on the comprehensive nature of the way we advise, we always get them.”

Some advisors are considerably more aggressive. Ken Robinowitz, a senior financial advisor with Wells Fargo Wealth Management in Dallas, who manages $3.4 billion in assets, reports that many clients have multiple advisors when they start with him. At the beginning of each relationship, Robinowitz says, his team “strives to find what that family is having the most trouble with” in terms of financial planning and suggests ways to help with the problem.

Then he’ll remind the client, “If we do a good job and you’re pleased with what we do, we would expect you would show us other things you want us to do, because we could do them equally well or better,” he says. “I actually strive to get them to feel obligated to let us do more.”