As suggested by the TIGER 21, PWC and IRS studies, illiquid assets are important. Therefore advisors should treat them with respect. Yet in my experience advisors think that if they don’t directly manage the assets, they are not responsible for them. In other words, “not my problem.” To the contrary, helping owners address their illiquid asset challenges is good for any advisor’s business. 

Consider registered investment advisory firm AdvicePeriod, recently featured in Financial Advisor magazine (November 30, 2107; How One RIA Got To $1.6 Billion From Zero In Four Years, by Steve Sandusky). President Larry Miles ascribed his firm’s phenomenal growth in part to its willingness to advise clients on all their assets, not just the ones it directly manages:

“Oftentimes, we're able to advise clients on assets that are managed elsewhere, assets that are in the form of a business or real estate,” said Larry. “We found over the years that clients were really seeking an advisor who could offer them advice on their entire balance sheet, and all of their liabilities, regardless of where they were custodied. We believe the best advisors are able to do just that.”

To summarize, there are many reasons for advisors to stop thinking of illiquid assets as being someone else’s problem. For advisors willing to help, happier clients and more referrals await. 

What Illiquid Asset Owners Need

Earlier I said illiquid asset owners need help. What kind of help, exactly? The answer is “the services you might want if you owned the illiquid asset.” Those services vary depending on the type of illiquid asset in question. There are seven major types:

1. Real estate

2. Closely-held businesses

3. Life insurance

4. Loans & notes

5. Minerals, oil & gas

6. Intellectual property

7. Tangible assets & collectibles