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.

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