There are two ways to generate more assets under management. One involves delivering more value to existing clients. As you work with wealthier clients, for example, you are increasingly unlikely to see them put all their investable assets under your purview. But there are proven methodologies that will help you bring over more of these assets. Those financial advisors who offer products and services besides investment management can deliver that expertise to more clients and see more revenues—and usually more profits.

It’s easier to deliver more value to your current clients, because, after all, you can more easily connect with them. That means they offer the easiest way to significantly increase profits. Nevertheless, most financial advisors fail to find ways they can offer more help to those current clients. They don’t even make a concerted attempt to find out.

If you think you might be one of those advisors, ask yourself these questions:

  • How many of your clients have special needs or problem children?
  • How many of your business owner clients are looking for effective ways to substantially reduce their income taxes?
  • How many of your wealthier clients are interested in not paying any taxes on any appreciation in their investment portfolios?

It’s very likely you have clients like these. If so, there are opportunities for you to deliver greater value to them and thus increase your AUM.

New clients are also essential if you want to significantly increase your profits.

And the most common way to get them is through referrals from those who are already satisfied clients. But how do you do that? When somebody asks one of your clients for a referral, your client has toremember you and make an introduction, and often these introductions are weak.

Ask yourself these questions:

  • How many client referrals are you getting from the top 20% of your clientele?
  • What steps are you taking to help these clients make referrals to other investors?
  • If you are taking steps, how well is it going?

We find that most financial advisors are not tracking new client referrals. Furthermore, relatively few of them are being proactive. When they are, they’re often not sure about the efficacy of their approaches, and in the end, very few financial advisors are getting the number of qualified client referrals they likely could.

It’s important to get those satisfied clients to act as your advocates.

For a smaller percentage of financial advisors, new clients come from other professionals such as accountants and attorneys. These referrals tend to produce much wealthier clients

Inorganic Growth

Buying another advisory firm is also a way to increase assets, though it comes at the price of the firm you’re acquiring. That means you will have to take action to become more profitable. You might need to modify operations at the target firm to achieve cost savings. And once you’ve acquired those new clients, you’ll want to increase their value the same way you do with your current clients—by offering them more financial products and having the new clients act as your advocates. The acquired firm’s referral sources will also become yours and create a pipeline of new clients.

“Everyone Wins”

People take action only when it’s in their self-interest: To wit, accountants will only refer a wealthy client to you for investment management work when it’s in their interest. Attorneys want to work with you when you can help them locate more legal business among their own clients. When you can find that for them, they’ll be looking to you for your expertise more often.

That means, for better relationships, you need a deeper understanding of clients, colleagues and peers—not just the services they want, but the actual outcomes they want. When you help people achieve their self-interest, they’re more motivated to help you achieve yours.

This is what we call the “Everyone Wins” process. It’s never about selling—never—it’s about adding value. That’s not just a semantic point. It’s about the way you think and act, and if you do it right, it’s completely different from any sales system. Adding value means finding new ways to provide expertise (whether that’s with investment management or tax help or insurance).

Financial advisors who have embraced this process can achieve sensational results. They are able to regularly deliver considerably more value to their clients as well as help other professionals achieve greater success. And their clients regularly become their advocates. Also, such advisors will establish pipelines of new clients from accountants and attorneys. In fact, they are usually able to identify potential clients for their investment management services and other financial products in their very first meeting with an accountant or attorney.

2021 could be a truly exceptional year for increasing profits at your advisory practice. Whether the pandemic abates or not, whether the markets go up or down, whether some other calamity appears or not, you can make it a great year.

The key is your ability to optimize or enhance your relationships with clients, prospects, your team and other professionals. One of the most effective ways to do this is by looking deeper and finding ways that your expertise helps those around you.