Missed opportunities: how to secure more business from your existing HNW clients

(November 2006) Growth. If you’re like most high net worth advisors, it’s the word most often on your mind. Whether it’s through generating more referrals, establishing relationships with centres-of-influence, or introducing new services or products, you’re constantly looking for ways to build your business.

While this effort should be applauded, we’d like to suggest that it may be unnecessary. In fact, the most significant opportunity to build your business might be through the clients you already have.

A recent survey by research firm Advisor Impact makes the case clear. The company questioned more than 2,100 affluent individuals (whom the survey defined as having more than $500,000 of investable assets) and found that less than 15% of respondents had all their assets managed by a single advisor. Other advisors, insurance professionals, discount brokers, personal bankers, lawyers, and even accountants were all playing a role in managing these people’s wealth.

In fact, 55% of respondents admitted they had less than three quarters of their assets managed by the advisor who sent the survey; 35% said it was less than half. No doubt this infidelity will be distressing to some advisors. But it should be viewed as an opportunity.

Those advisors who can successfully convince their existing HNW clients to entrust more of their wealth could see an explosion of business growth, at a cost that is much, much lower than prospecting new HNW clients.

With that in mind, here are several ideas on how you can capture more from the clients you already have.

Make service to existing clients a priority

First things first, if you want to do more business with existing clients, you need to let them know that they are your number-one priority. Responding to the needs of existing clients must take priority over nearly every other activity your team is engaged in – that includes trading, research, paperwork, or meeting with new clients. Make sure everyone on your team knows this, and hold them accountable for it.

Adapt a “drop-everything-and serve- the- client” mentality and clients will soon be asking themselves why they would work with anyone else.

Analyze service gaps and fill them

Many times clients have a very good reason for using multiple advisors: None of their advisors offers a “complete” wealth solution.

Make sure you’re not giving your clients this excuse. The next time you meet with one of your top clients, ask them candidly if there’s anything else you could be doing for them. Listen carefully to their suggestions. Gather these various suggestions and look for common threads. Then take steps to fill in any gaps you find. That could mean enrolling in professional development or education courses, adding new team members, establishing new relationships with outside service providers, or some combination of these. When you’re ready to offer new services, let your clients know about it. You’ll be surprised at the new business.

Emphasize a comprehensive approach

Other times, clients simply aren’t aware of the range of services you offer. They see you as the person who takes care of their investments rather than a full-service professional.

That’s why successful HNW advisors go to great lengths to emphasize their “comprehensive” approach. They refer to themselves as wealth advisors rather than investment advisors. They investigate all aspects of a client’s financial affairs, from portfolio planning to wills and trusts to business succession, and follow up on that investigation with proper planning. They introduce the client to the various team members and explain their different roles, emphasizing their particular knowledge and areas of specialization. All of this helps a client understand that their practice is a “one stop shop” where the client can have every financial need taken care of.

Establish relationships with multiple generations

Rarely in the HNW market will your relationship begin and end with an individual. It’s far more likely that your relationship will extend to children, grandchildren, perhaps even others as well. In our practice, for example, we have worked hard to distinguish ourselves as “multigenerational” wealth advisors – we speak of our clients not as individuals, but as “client families.”

We welcome the adult children of our HNW clients, waiving our usual account minimum in an effort to service the entire family. Not only does this generate considerable goodwill with the HNW parents, it strengthens the relationship between our group and the next generation of HNW individuals.

Become a specialist

As the saying goes, “if you can’t beat ’em, join ’em.” Instead of trying to capture more of your clients’ assets by being a generalist, focus your efforts on capturing the business of many clients within a narrow mandate. The complexity of HNW affairs means there are plenty of areas that are ripe for specialization – charitable giving, business succession, and perhaps alternative investments are just a few of the more obvious ones. All of them have outstanding growth prospects. Transforming your business from a holistic practice into a specialist boutique would be a major undertaking, but it’s a strategy that could reap significant rewards.

Growing from the inside out is a good idea for a number of reasons. But the best reason of all may be the one that has nothing to do with growth. Even if the suggestions above don’t result in immediate growth for your practice, they can strengthen existing relationships and bulletproof clients from the competition. When your practice evolves in this direction, growth isn’t far behind.

Thane Stenner, Rod Bower and Rory O’Connor are advisors with the T. Stenner Group of CIBC Wood Gundy. The views of the authors do not necessarily reflect those of CIBC World Markets Inc. This article is for information only. CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of CIBC and Member CIPF. www.thestennergroup.ca.

(11/27/06)