When new wealth management business can be easily attained with comparatively little effort, it’s referred to as low-hanging fruit. Many financial advisors have a literal cornucopia of opportunities available from their existing clientele, yet nothing is being done about it.

It’s critical to recognize that failing to pick the low-hanging fruit is detrimental in many ways. First and foremost, it means financial advisors are not delivering value where they can. It’s all about seeing places to deliver greater value to clients and then doing so, thereby benefiting clients.

The outcome of providing greater value to clients is regularly delivering more services and products, so financial advisors benefit by generating more revenues. They can also majorly benefit from additional client referrals. It’s a winning scenario for everyone, but it’s more the exception than the norm.

Missing the Opportunities

Most financial advisors have a limited understanding of their clients. In a survey of 238 financial advisors with a minimum of $100 million under management and a minimum 10 years of experience, the average of new business was low (Figure 1).

Although there are numerous exceptions, most financial advisors are focusing on business development activities intended to produce new clients instead of leveraging their existing client relationships (Figure 2).

Using the statistical technique of factor analysis, we identified three dominant rationales for not concentrating on maximizing client relationships. Each is strongly held and seriously faulted. In order of impact …

“If clients want something, they will ask.” The reality is that most clients will not ask unless the relationship with their financial advisors is extraordinary. Quarterly review meetings, for example, rarely produce the level of rapport that translates into clients being proactive. Clients very often do not know what is potentially available to them, so they do not know what to ask for. It’s the responsibility of financial advisors to deliver greater value so they, not their clients, have to take the initiative.

“I have all their investable assets.” This perspective is advisor-centered as opposed to client-centered. Being a financial resource for clients is usually the aim of most financial advisors. Basing everything on investable assets can also be limiting. It will also harshly restrict a financial advisor’s ability to get client referrals unless investment performance is consistently outstanding.

“I let them know I would like referrals.” Very infrequently will financial advisors not be interested in receiving client referrals. However, simply letting clients know they want referrals rarely produces results. Especially asking for generic referrals does little to produce them. By adding value in various forms and identifying whom clients can refer, the probability of getting client referrals goes up exponentially.

Previous research showed that many financial advisors could in one year:

• Increase revenues by 40%

• More than triple the number of new clients through client referrals

To get these kinds of results requires financial advisors to …

1. Recognize they have to take action and be motivated to deliver greater value to their clients.

2. Incorporate various processes into their practices that would facilitate their ability to determine where they can add value and how to help their clients refer others to them.

The first issue is recognizing that they are working to enhance the financial lives of their clients. Yes, they will economically prosper, but it is all about bettering the lives of their clients.

As for the second issue, highly effective methodologies can assist financial advisors in determining where they can add value. One approach utilizes the “Whole Client” model. In using this approach, financial advisors are able to develop a deep understanding of their clients—their hopes and dreams, their concerns and anxieties. Very often, greater insights translate into ways financial advisors can use their expertise to add value.

Another established approach is to provide clients with high-quality thought leadership content. The content can be created or curated or both. The best approach to providing content depends on the abilities of financial advisors and their firms to produce a constant stream of high-caliber materials.

Based on how financial advisors distribute and follow through, this approach can range from being fairly mechanical to very personal. With greater financial advisor/client interaction, results are usually better. Nevertheless, even when material is sent out with little or no financial advisor follow-up, new business from existing clients is very common.

What About Accountants And Trusts And Estates Lawyers?

While a sizable percentage of financial advisors are leaving money on the table, they tend to do a good if not great job of maximizing their client relationships compared with most accountants and most trust and estate lawyers. Both these types of professionals are regularly less proactive and systematic than financial advisors. Also, they often do not develop in-depth understanding of their clients, save for what they need to know to do what they are explicitly hired to do.

In a survey of 173 accounting firms that share in wealth management revenues, about 70 percent of them are “severely underperforming” or “underperforming” (Figure 3). When the issues are dissected, the reason the wealth management groups are underperforming is that they are not receiving qualified referrals from the accountants in the firms.

Processes can be put in place that can exponentially increase the profitability of underperforming wealth management groups. Additionally, the use of high-quality thought leadership content and supporting actions, such as targeted events, could generate qualified introductions to an accountant’s clients without him or her having to get very personally involved.

As for trusts and estates lawyers, they are often transaction based and, for various reasons, are not disposed to initiate contact with their previous clients. Complicating the matter is that a great many of them are intensely focused on their services, and unless the client explicitly asks for a referral to a financial advisor, the lawyers are not inclined to approach their clients with recommendations.

While a large percentage of these lawyers find it difficult to refer to financial advisors, often a plethora of opportunities arise for them to do so. Again, as with the accountants, it is commonly very effective to provide high-quality thought leadership content to their clients and former clients. The result is that some of the lawyers’ clients will connect with the material and connect with the lawyer. There are also other ways trusts and estates lawyers can leverage their clientele to generate significantly more revenues.

It is worthwhile to note that most accountants and trust/estate lawyers want to be more successful and wealthier. Financial advisors that can help them leverage their own clients for more revenue and referrals are able to build solid strategic partnerships. For example, by providing the accountants or lawyers high-quality thought leadership content and the ways to best use the material, these professionals will produce more business for themselves. Consequently, the financial advisors benefit by receiving a fairly consistent steam of new clients for their expertise.

Maximizing Existing Client Relationships

By and large, professionals—financial advisors, accountants, and trusts and estates lawyers—are not inclined to reach out to their current or previous clients to identify opportunities where they can add value and thereby generate more revenues. Proficiency with tools such as the Whole Client model can readily correct this deficit.

Another obstacle for many professionals is not being comfortable calling clients or former clients. They see it as pitching business—it is—which is something they do not want to do. For many professionals, the belief is that if clients or former clients want something else, they will initiate contact. The complication is that only sporadically will clients and former clients take such action. Also, commonly, they do not know what possibilities are available to them.

Using high-quality thought leadership content is a proven, effective way to motivate clients and former clients to contact professionals. Although professionals following up can enhance the probability of success, the approach does not rely on professionals being extensively personally proactive.

Bottom line … financial advisors can dramatically improve the productivity of their practices by delivering greater value to clients. By going in this direction, financial advisors will also significantly profit. In effect, they will be picking their low-hanging fruit. Moreover, by helping accountants and trust/estate lawyers maximize their client and former client relationships (their low-hanging fruit), financial advisors can create pipelines of new clients for themselves.

Russ Alan Prince is president of R.A. Prince & Associates. Brett Van Bortel is director of consulting services for Invesco Consulting.