Laura Gregg, Director of Practice Management and Advisor Research for FlexShares ETFs, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss practical strategies for growing client wallet share.
The most efficient way to grow an advisory practice is to grow the wallet share of your existing clients, says Gregg. The New Rules In Growing Wallet Share, a recent research study published by FlexShares, debunks the idea that advisors can easily control all of their client assets simply by reducing fees or improving relationships with their clients.
The study reveals that most clients view their relationship with their advisor and how much to allocate to their advisor as a highly emotional decision. Clients vary in their approach to advisors and finances, so advisors are encouraged to understand their clients and get to know them in a way that builds trust.
Once advisors understand the emotional cues of each type of client, they can more easily communicate with them. Using behavioral finance theory, clients generally can be categorized into one of five persona types, including the protector, the competitor, the collector, the verifier, and the simplifier. The protector tends to be risk averse and keep lots of cash, while the competitor may see themselves as the smartest person in the room. The collector believes in diversification in both their portfolio and their advisors. Verifiers may be an advisor’s favorite client, as they seek holistic advice and often place all of their assets with a single advisor. The simplifier wants to completely delegate the investment process to an advisor they like and trust.
To learn more:
Webcast: The New Rules in Growing Wallet Share: What You Should Do – and Never Do – To Grow Assets With Existing Clients. WATCH REPLAY
Report: The New Rules In Growing Wallet Share