You’ve been doing a great job. Clients are happy. How do you make the case for more assets?
#1. Average Account Size
Years ago they asked what your minimum was. You answered $100,000 and that’s what they gave you. It’s grown but they haven’t added much.
Rationale: During your next review explain that you work with (X) families whose accounts range from (Y) to (Z) dollars. Note the average.
How to word: “I work with about 150 families. Combined assets total about $100 million. The smallest is about $100,000 and the largest is $5 million. The average is about $700,000.”
Why it works: No one wants to be below average.
Some clients buy mutual funds while others have separately managed accounts. The concept is appealing, but these managers have high minimums.
Rationale: Clients like the idea of managed money. Each manager fits their style and size category. They need several managers for adequate diversification.
How to Word: “These managers have excellent reputations. To use this program, investors need $500,000 or more. Although each manager has a $100,000 minimum, it makes sense to have several managers. Sometimes large capitalization growth is in favor, other times value takes the lead.”
Why it works: The styles in favor often change from year to year. It’s better to have many chances to win versus trying to pick one winner.
#3. Next Threshold
Your client owns Class A mutual fund shares. You’ve focused on a couple families of funds instead of investing all over the map. The client pays up-front fees.
Rationale: Although you earn less, the client pays less. She sees you’re acting in her interests, and that she can pay even less if she adds enough money to reach the next threshold.
How to Word: “We’ve focused on a couple of good fund companies. We’ve bought Class A shares because it’s cheaper for you long term. You have $425,000 invested with this fund company. Once you cross the $500,000 threshold the sales charge declines by an additional 1%. I have some ideas….”
Why it works: Your ideas sound good and people like saving money.
#4. You Don’t Want to Sell
You suggest an investment and the client likes it. But he expects you to sell something to fund the purchase.
Rationale: You believe in your earlier recommendations and are convinced they’ll continue to perform. Your other idea is also sound but for different reasons. Your view is they’ll all perform well.
How to Word: “Here’s an idea I think you’ll like (explain). I like everything you already own in your account. Your stocks have done well and I feel that’ll continue. I don’t want to sell anything. If you want to add this new position we will need additional money from outside the account.”
Why it works: He probably has money somewhere else he hasn’t told you about. If he likes your idea and you have a good track record, he’ll tap into that other account to fund the purchase.
#5. Maturing Securities
The client has bonds and CDs set to mature.
Rationale: That maturing money needs a home. Renewal rates are low if she wants to roll it over. But she could be open to other ideas.
How to Word: “This annuity (or other investment) would be a good addition to your portfolio. (Give reasons.) It needs to be funded from outside assets. As I recall you have a certificate of deposit maturing soon.…”
Why it works: She likes your thinking and is ready for something new.