4. Implement dedicated strategies. To accommodate lower minimums, you can create specific strategies for small accounts. By using a platform that supports fractional share technology, your smaller accounts can own pieces of individual stocks within a diversified portfolio. This gives you the ability to provide greater flexibility and diversification within the portfolio.
Few advisors start their businesses to manage small accounts, but almost all end up with having at least a handful of smaller accounts. By implementing the right technology and a smart approach, you can manage smaller accounts just as quickly and cost-effectively as large ones, making them a profitable segment of your business. And since smaller accounts represent a large, potentially untapped part of the market, serving smaller accounts could even present an opportunity for you to develop a new target niche.
Mike Lover is senior vice president of key accounts for Trust Company of America.