Increasing your share of wallet for existing clients can result in greater profitability for your practice. When your clients invest more of their assets with you, your average per-client revenue rises and your average per-client cost decreases, resulting in a net increase in your bottom line.
“The successful advisors of the future,” says Francis D’Andrade, vice president, private client, with at HAHN Investment Stewards Inc. in Toronto, “are the advisors who recognize that they are their clients’ personal CFO.”
This means taking a “wholistic approach” to managing their assets in order to make the best possible decisions that are in their interests, says Joanne Ferguson, president of Advisor Pathways Inc. in Toronto.
Getting to manage all or a greater share of your clients’ assets is like putting a fence around the client, says Heather Holjevac, senior wealth advisor with TriDelta Financial Partners in Oakville, Ont.
The following tips can help you increase your share of wallet with existing clients:
> Offer comprehensive financial planning
Introducing financial planning into your practice is the single most important factor that drives increases in share of wallet, Ferguson says.
Financial planning allows you to build a road map of where the client wants to go, Ferguson says, and obtain knowledge about more than their investments.
You also get the opportunity to take a more strategic approach to assessing client needs in areas such as cash management, insurance, mortgages, retirement planning and tax planning, Holjevac says. This gives you the chance to fill any gaps with products and services you provide, and find out where clients might have other financial assets.
> Offer a full suite of products and services
Offering a range of products to your clients not only improves profitability, it can also prevent your clients from becoming targets of competitors who can sell them products you do not offer. Failure to offer clients the products and services they need could mean that you are falling short in your role as a financial advisor.
“The more comprehensive your offer,” D’Andrade says, “the more integrated you are into their financial life and the taller the fence you will build around your client base.” He suggests that you offer certain ancillary services, such as mortgages and banking, to increase share of wallet through referral arrangements with the relevant providers — if those services are necessary in meeting your clients’ needs.
> Maximize your client reviews
“Have an agenda going into each client review,” Ferguson says.
During the initial planning process, Holjevac says, identify areas in which there is room to increase share of wallet and discuss each area in order of importance during follow-up client reviews. The goal is to take a strategic approach to ensuring client needs are met while providing an increasing range of products and services over time.
Client reviews should also involve more in-depth conversation, Ferguson says, during which opportunities to increase share of wallet can be identified.
> Explain benefits
Explain to clients who may hold assets elsewhere the benefits of having all assets in one place. For example, Holjevac says, show them how it facilitates better asset allocation and tax-planning decisions. You can also explain that it is easier to review and compare a single report from you than to manage several reports from various providers, and that it can make tax reporting easier.