Getting a Larger “Share of Wallet”

We want to deepen client relationships.  How do you do that?

Years ago, stockbrokers sold…stock. (and bonds.)  Bankers did checking, savings and loans.  Insurance agents sold…insurance.  It was pretty easy to determine who did what. 

Today everyone tries to do everything.  Doing business in more than your traditional field is increasing share of wallet or cross selling.  This involves deepening the relationship, but also broadening it into nontraditional products.  The logic is simple: If your client enjoys doing business with you, they would likely be open to doing nontraditional business too.  This is especially true if they have an anonymous relationship with that service provider.

Deepening the Relationship

Let’s look at the opportunities:

  1. Financial planning.  Your client might historically be a stock trader.  It’s important for you to know your client.  It’s important for them to see the bigger picture.
  2. Consolidating assets held away.  As we approach year end, clients with multiple account relationships find themselves needed to aggregate gains and losses.  It’s easier if everything is in one place.
  3. Managed money and fee based accounts.  This approach puts both advisor and client on the same side of the table.  Consolidating assets is attractive because the more you have under management, the cheaper the fees on a percentage basis.
  4. Selling upwards.  Your clients have parents.  They might be older.  Your client helps them manage their money.  There’s a role for you too.
  5. Selling downwards.  Your client has children.  Maybe grandchildren.  We also call them “heirs.”  It’s to your benefit if you get to know them early on.  Your client benefits if you are helping plan college saving strategies.

Widening the Relationship

Your client buys other services from different providers.  Those same people might be asking your client to consolidate assets (held by your firm) with them.

  1. Insurance.  There’s a role for life insurance and annuities in a client’s financial planning.  If you are licensed for this business, it could be done through you.
  2. Lending.  Your client has a home.  Possibly a vacation property.  Any rental properties?  These often have mortgages.  The mortgage application process is something buyers dread.  This could be done through your firm, with you acting as the helpful intermediary.  Clients also have home equity lines of credit (HELOC).  If you can do mortgages, you can do those too.
  3. Savings.  Some money isn’t in the stock market.  Clients have “safe money,” often held in Certificates of Deposit or Us Treasury Bills.  You should have instruments to keep safe money safe.
  4. Money they influence.  Here’s a category that’s often overlooked,  Your client serves on the board of a charity.  They have an endowment or foundation.  It’s invested long term, often with money managers involved.  They periodically review manager performance.  Can your firm get into the competition on a level playing field?

There are areas financial advisors don’t touch:  Tax accounting.  That’s left to the CPAs.  Legal issues.  That’s the area for lawyers.  There are plenty of other areas involving money where you and your client can together deepen their relationship.

Related: Why Advisors Need to Define Their Market