Growing New Assets Under Management From Existing Clients
Your existing clients can be your biggest opportunity for growth. It's a win:win!
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Growing new assets under management (AUM) from existing clients is a highly effective way to expand your practice and increase revenue. In this article, you'll discover how to uncover new assets and create exponential AUM growth from your current clients.
Right-Fit Relationships
The key to gaining more AUM from existing clients is starting the relationship right and working with clients who have the ability to add assets over time. This means targeting clients with higher income, who work in industries with high growth potential, own successful businesses, or are likely to experience life-changing liquidity events, such as inheritances, business sales, or job changes.
When you focus your time on clients with a higher likelihood of adding future assets, you set the foundation for growth. Starting with the right clients and establishing a wealth management process that is conducive to generating new AUM ensures success.
Launch the Hub-and-Spoke Model
My most successful clients that add more assets to their accounts always seem to follow a “hub-and-spoke pattern. In a hub-and-spoke relationship, there is an influential client who serves as the hub, with their family members, colleagues, and personal network acting as the spokes.
By delivering exceptional investment management to the hub (the client), you build trust and loyalty. This trust extends to the client's broader network, allowing you to tap into new opportunities. As these relationships expand, so does the potential for exponential growth in AUM, as each new connection (spoke) brings in additional assets under management.
Go Above and Beyond
When you really connect with a person that you believe is a real influencer and solid client, the number one rule is to go above and beyond for them. Take great care with attention to detail and timeliness of service. Over time, a big catalyst is likely to come, and you will be the wealth advisor they call. You want to be the first call on their mind when a big sum of money comes their way and if money is in motion.
Going above and beyond could mean finding and interviewing an attorney, gathering information to create an estate plan, or helping them plan to care for a parent in an assisted living facility. It could mean helping them find resources for cash management, negotiating employment contracts, or connecting them with other experts. All of these activities are often done with no fee but reap huge rewards. Truly caring for clients is the key.
Expand From the Hub
A single influential connection can turn into many millions of dollars. Some common things to look for are clients or spouses that are getting close to retirement. Executives working for publicly traded companies that are ready to be done working, or have large stock grants, options or real estate that need to be managed and converted to a more diversified portfolio. It’s like a hub and spoke: assets grow exponentially from a single strong relationship where you’ve provided significant value.
The Magic of Portfolio Analytics
A large part of most advisor’s success is consistently using detailed portfolio analytics of all client assets. I use a checklist to review every individual holding and analyze portfolios across all their assets, whether held with us or elsewhere. Follow the key metrics that can move the needle for clients like expenses, taxes, risks, and level of diversification for clients' investment policy.
Consolidating accounts is a key strategy to grow AUM because it simplifies the client's financial life, provides them with clarity, and can often reduce expenses due to greater scale. Larger account sizes also allow for access to better investment options, as many high-quality investments have larger minimums. Operational excellence is crucial, and having relationships with multiple custodians makes it easier for clients to transition assets from different brokerage firms.
Find Bull Markets
Communication is equally important. I always look for the next "bull market opportunity," because a growth mindset breeds optimism. We tend to find what we seek, so look for what your clients need. Educate and motivate clients with optimism because this helps them see a brighter future and expand their thoughts about investment opportunities.
Exclusive regular client education, such as webinars and research, keeps them engaged and gives them ideas on how to implement strategies that ultimately lead to attracting more AUM. But I balance this with candid discussion about risk. Clients appreciate honesty about potential risks.
Making the Connections
I also make an effort to understand my clients' key relationships—family, friends, and colleagues—so I can better advise them. This is how you find the “spokes” in the hub-and-spoke model. Knowing these relationships allows me to provide more personalized and relevant advice, which deepens our connection.
Dig Deeper
Many wealth advisory firms tell their advisors not to engage in research and just to sell. I strongly disagree. The best advisors I know dig deep into research that can affect their best clients. They keep current with opportunities in the capital markets, geopolitics, taxes and legal issues. The biggest clients know the difference between an advisor at this level and a run-of-the-mill salesperson.
Create Money in Motion
I don’t believe in “finding” money in motion. Instead, I believe in “creating” money in motion. That means you must always be looking for ways for clients to be better off by making a change that is in their best interest. The most common triggers are changes in tax laws and client circumstances. I make sure to ask about their life circumstances, not just their money and when new changes in laws seem likely, I tell them about it beforehand, if possible, to be ready. Awareness and understanding possibilities makes the client feel like you are a proactive advisor, not reactive.
Increase Profits By Offering More For Less
Changes in technology bring huge opportunities to give clients more and gather more AUM. For example, recently I added management services of 401(k) and 401(b) retirement plans on a discretionary basis solely because of new analytical and trading software that can be used with most retirement plans. Clients love having everything tie well into their plan and this fits my goal of making client’s lives easier. Another area that many advisors could enter is private market alternatives. Give them more and you will attract more AUM.
Orchestrate Pleasant Surprises
Surprising clients with thoughtful, personalized gifts also helps maintain long-term relationships. I prefer to give unexpected gifts that reflect the client's interests, rather than generic or branded items. The goal is to create an emotional connection by showing you care beyond the business relationship. Personalized, high-quality gifts leave a lasting impression, helping to strengthen the relationship and encourage future business.
Leverage Your Biggest Growth Tool
Your biggest growth tool is a client-aligned process. Combine this with targeting high growth potential clients and you have a winning strategy. It strengthens relationships by providing a holistic approach, identifies additional investment opportunities, uncovers hidden assets, and leads to cross-selling.
Clients achieve better outcomes, and retention improves as their investments align with their broader goals. Client satisfaction leads to referrals, and managing generational wealth can bring in even more assets over time. This naturally leads to a hub-and-spoke wealth management model for growth.
By integrating all these strategies, advisors can build deeper relationships, offer more value, and ultimately grow their AUM.
I always like to hear feedback and comments. Thanks for reading.
