The Top Secret to Helping Financial Advisors Raise Their AUM

By Dr. Jack Singer

Many veteran advisors contact me with the following questions:  “Why do my high-value clients only entrust a portion of their assets with me? If they trust me with some assets, why not allow me to manage all of their assets?” “How can I change this situation?”

According to a recent Capgemini, RBC Wealth Management U.S. Wealth Report, a survey of a large sample of high net worth clients across the U.S. showed that they graded their wealth managers with an average score of C-.  Furthermore, clients who graded their advisors with these scores only turned over only 32% of their wealth to that advisor, versus 68% turned over by more satisfied clients.

Add to this a 2013 study by Fidelity Investments that found a remarkable 70% of widows fire their financial advisors within 12 months after their spouses die! For the women surveyed, they cited the following examples of why they fired their family’s advisor:

  • “He didn’t really listen to ME.”
  • “He seemed condescending toward me, dismissing my knowledge of our financial situation and options.”
  • He hardly looked at me or asked my opinion.”
  • I felt undervalued.”
  • I didn’t believe that he really understood my fears and goals.”

Clearly, the challenge for wealth managers is to gain insight into what matters to each of their clients, so that they will feel comfortable entrusting their advisor with the bulk of their assets and will remain loyal to them. We all know that there are significant differences between clients, their needs, fears, and goals; some advisors get overwhelmed trying to accommodate each client. Moreover, many advisors are so busy prospecting and worrying about attracting new clients, that they take their present clients for granted and spend little time nourishing the relationships they have with their ongoing clients.

It boils down to your mindset and the culture of your firm.  Committing a block of time each month to nourish each relationship you have with your ongoing clients will not only go a long way toward raising the satisfaction “grade” from your clients, but will also help to move them from entrusting you with only a small portion of their assets to a majority of their assets.

So, how do you nourish relationships?  Well, think about other relationships in your life—your spouse, children, friends, etc. When they complain that something is lacking, what do they complain to you the most about?  Is it the lack of time spent with them?  Is it that they do not believe that you listen to them or understanding their needs?

The Big Secret Revealed

In my 33-year career as a Consulting Psychologist, I have worked with hundreds and hundreds of relationship issues—couples, business partnerships, coaches/athletes relationships, advisor/partner relationships and advisor/client relationships.  The common denominator in all relationship issues is communication breakdowns because either or both people do not truly listen to the other.

The good news here is that “listening” is a skill that can be easily learned.  The most successful method of communicating involves “Active Listening,” and if you google the term and practice the steps, you will quickly learn the “how to’s.”  I promise you that if you use active listening skills with your present clients, your AUM will increase dramatically, taking pressure off of your ongoing concern to prospect, and you will automatically develop greater trust and loyalty from those clients. As a side benefit, once you learn the skills, other relationships in your life will also flourish!

An Advisor Case Study

Scott contacted me after he found himself getting overwhelmed by several of his most demanding clients. He was worried that if he didn’t tell them what they wanted to hear, which would necessitate him wandering away from his wealth management core values, then he would lose some of those clients.

Scott believed that since he had a successful practice for many years, he didn’t need to change anything, but he simply wanted help in dealing with this group of clients.  The first step for Scott was to realize that if he embraced a relationship-style of practice, he could be even more successful.

Regarding the demanding clients and Scott’s trying to accommodate them by modifying his core values for managing their wealth, I taught Scott a combination of “Assertiveness Training” and “Active Listening” skills.  The results were astounding! Within a matter of a few months, Scott was handling every demanding client like a seasoned pro.  He did not lose a single client, and many of his ongoing clients increased their AUM with Scott.

Action Plan

  • Read a book or articles related to “Assertiveness Training” and “Active Listening,” and practice the skills. Descriptions and examples of this technique can be found in my book, “The Financial Advisor’s Ultimate Stress Mastery Guide.”
  • For additional training and practice consider hiring a mentor who can teach you those skills.
  • Schedule frequent visits with each of your clients, especially female clients, and female spouses.
  • Offer roundtable discussions for groups of female clients and spouses.
  • Offer spouses separate wealth management strategy sessions, if they prefer, in order to understand the needs and fears they may not discuss in a joint visit with their spouse.