Paul Lofties, CEG Worldwide
Co-host, The Preeminent Financial Advisor podcast
Cathy McBreen, CEG Insights
Co-host, The Preeminent Financial Advisor podcast
Key Takeaways:
• Offering comprehensive wealth management can greatly improve client loyalty.
• A key component of comprehensive wealth management is advanced planning that goes beyond investments.
• Skillfully managing relationships—with clients and with a team of experts—is crucial to effective wealth management.
Affluent clients today need great advice and guidance like never before. Far too many currently rate their advisors as fair or poor. Others say their advisors aren’t reaching out to help them navigate today’s volatile environment. And a shocking percentage of clients say they’re willing to fire their primary advisor and find a new one.
The good news: There’s one big step you can take that will empower you to attract new affluent clients seeking better advice and keep existing clients highly satisfied and loyal. The key is to deliver truly comprehensive wealth management to the affluent.
Here’s a look at how to do exactly that.
Face The Facts
To see just how important wealth management is to affluent clients, consider research by CEG Insights that assessed the impact that offering comprehensive wealth management services has on client loyalty:
• 77% of clients with $1 million to $5 million in investable assets say that getting wealth management services from their advisor has an impact on their loyalty to that advisor.
• Among clients with $5 million to $10 million, 75% said wealth management affected their loyalty to their advisor.
Clearly, high-net-worth investors value receiving wealth management services—and they’re very likely to reward advisors who deliver it with their loyalty and their assets.
Insights Into Action
The obvious action step here is to offer your affluent clients truly comprehensive wealth management.
But what’s less obvious to many advisors is just what comprehensive wealth management is—what it looks like, and how to articulate it to clients and prospects.
Best advice: Use the following wealth management formula to guide your efforts in both building and positioning a wealth management offering. It’s a succinct description of wealth management that will be easily understood by partners, team members, clients and prospects.
Wealth Management = Investment Consulting + Advanced Planning + Relationship Management
The shorthand version looks like this: WM = IC + AP + RM
Investment consulting, of course, is the primary offering of most advisors. Asset management is table stakes—you have to have it, and it’s not a differentiator between you and all the other advisors out there.
Advanced planning addresses four key concerns of the affluent beyond investments: wealth enhancement, wealth transfer, wealth protection and charitable giving. This is where the enhanced value of true wealth management really kicks in and differentiates you from the pack.
Relationship management builds and fosters deep advisor-client relationships over time through a consultative process of working together. It also creates high-value relationships with other, specialized professionals to expertly address clients’ advanced planning needs.
A wealth management offering that is designed in this way will enable you to generate rock-solid client loyalty, because no matter what is happening in the markets, you’ll always be moving your clients closer to key financial goals that are important to them.
Listen to the full episode here.
Catherine McBreen and Paul Lofties are leading innovators in wealth management research.