The process begins with discovery. At this point, you are looking to learn as much as you can about some of your clients. Some investment professionals tell us they already know all about their clients. But most know a limited amount that usually correlates with the services they’re already providing.

Some advisors hesitate to ask useful questions, feeling their clients would be put off. This can be a major problem, but it won’t be if handled properly.

Let’s say you are going to approach a successful business owner client for whom you are managing $4 million (the client meets two of the key criteria described above). Also, you are managing all of the client’s discretionary monies. A very effective way to initiate discovery is to say something along the lines of, “Bob, what’s going on in your business lately?”

Business owners like Bob tend to happily and extensively talk about their businesses. Your job is to listen carefully and probe. Skillful probing will enable you to fill in all the information you need, enabling you to find opportunities for your services or the services of other professionals.

Consider a common scenario: Bob owns a number of fast-food franchises and has to pay a lot in income taxes. He is always very interested in ways to legitimately lower taxes on his company and personal income.

You confirmed this perspective during discovery. You also learned that what he is doing to lower his taxes … is not much. And you found out he has a company 401(k) plan with very little money in it. There’s no company match, and the people in his business tend to leave after a few years. Also, the people running the company with him are his children, who will one day inherit the business.

Connecting the dots, you see that a defined benefit plan might make a lot of sense for Bob. Depending on circumstances, you can save him $1 million annually in income taxes. Moreover, almost all the monies will end up going to him or his children.

Now that you have fleshed out the opportunity, you have to frame it for him. One way to do that is to say, “Bob, there’s a way you can probably pay close to $1 million less in income taxes with most of that money going to your family in the future. Also, the money will probably grow until you or your children take it. Why don’t I run the numbers for you?”

Very, very rarely will a successful business owner not be very, very interested in having you do such an analysis. Now, if the numbers work out as expected and the client’s situation is the same as when you started the conversation, there is a strong likelihood your client will go ahead with the defined benefit plan. In this case, you may very well be managing an additional $800,000 more each year (and that doesn’t include appreciation).

That would be a 20% increase in Bob’s AUM ($800,000 = 20% of $4 million) in year one. Each year, Bob would be adding to the monies you’re managing.