The ClientWise Blog

Financial Advisor Marketing: Big Opportunity to Help the Affluent

Posted by Chris Holman on Dec 1, 2011, 4:20:00 PM

Are you a financial advisor marketing to the affluent? Are you also looking for a way to truly help them?

Consider this statistic. 58 percent of investors with $5 million+ to invest are using multiple investors. In fact, 30 percent of this group is using, on average, 4 or more advisors!

By the way, this is not a trend limited to the affluent. Over the past three years, investors in all wealth brackets are establishing more relationships with more advisors. This is all revealed in a fascinating study by Cerulli & Associates, “Are Clients Two-Timing Advisors?"

Why is this happening? It’s not too hard to figure out. In the post-Madoff era, investors are afraid to place too much faith in any one advisor. Some investors also like to play one financial advisor against the other. Likewise, there are investors who choose different advisors for their perceived expertise with different asset classes. Finally, you have the investor who believes that multiple advisors is a way of achieving de facto asset allocation.

So, where’s the “big opportunity” for financial advisors who want to dial up their marketing?

Having multiple financial advisors: 
  1. Complicates financial decisions,
  2. Increases risk, and
  3. Decreases portfolio return.
 Talk about a triple-whammy!

In all likelihood, this trend towards multiple advisors will die down, once the market’s volatility decreases, and investor faith is restored. Ironically, until that point is reached, many investors have placed the financial being of themselves, their family, and their heirs…at even greater risk!

So, here are some coaching questions to those of you readers who are financial advisors, who are also in a marketing mindset: 
  1. When you meet an investor who is using multiple advisors, what are you doing to inspire trust?
  2. Are you able to communicate to wealthy investors why having multiple advisors places them at risk?
  3. What services and tools are you offering that allow investors to analyze and consolidate their multiple investment portfolios?
 I trust this helps!


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Topics: Client Acquisition, Marketing Approach, Business Development