Skipping The 'Fashion Show'

For financial advisors wanting to increase the assets they manage, a number of situations provide tremendous opportunities. These are situations where there is “money in motion,” investable assets now available to be managed.

These opportunities are all put in motion by a “trigger event.” One example is inheriting significant sums from an affluent parent. Another example is the monies provided to an ex-spouse as part of a divorce settlement.

For most financial advisors, the greatest opportunity to capture money in motion is when a successful business owner sells his or her company. Worldwide, the most significant creator of personal wealth is entrepreneurism. Moreover, most successful entrepreneurs are only rich on paper until they sell a portion or all of their companies.

When they monetize the value of their firms, they have investable assets that they often turn over to investment professionals to manage. This scenario is unquestionably one of the very best ways for financial advisors to bring in more assets to manage.

Most Entrepreneurs Want To Be Wealthier
In order to win the investment business of these entrepreneurs, it is useful for you to understand that becoming wealthy was (and is) a core motivation of their business building efforts. In a survey of 513 business owners, a little more than nine out of 10 of them want to become significantly wealthier than they are today (Exhibit 1). Moreover, all of them strongly recognize that their ability to become wealthier is a function of the success of their business.

There are often many reasons business owners want to be wealthier. Taking care of loved ones regularly tops the list (Exhibit 2). The success of the business and their ability to maximize personal wealth is usually instrumental in this regard.

At the same time, about seven out of 10 entrepreneurs said they are interested in doing more to support worthy charitable causes (Exhibit 3). Again, the success of their business and their ability to translate that success into personal wealth can be significant in enabling these business owners to be more philanthropic.

A core motivation for most entrepreneurs is personal wealth creation. This often carries over into how they want their monies invested once they sell all or part of their businesses. It is useful to note that the majority of business owners who monetize their companies are not walking away with hundreds of millions of dollars. Most businesses are small or midsize businesses, and there are often equity partners and possibly investors. This frequently means that the entrepreneurs are looking to have the monies that they entrust to investment professionals grow (Exhibit 4).