Unlocking Real Value Blog

How Many Other Advisors Do Your Clients Have?

Do you know? ¬†And are you your client’s primary advisor? A recent survey of advisors and clients by Cerulli and Associates has some sobering results for many advisors. On the second question – of the 1500 advisors surveyed who concentrate on clients with more than $5 million in investible assets, 73% said that they were their client’s primary advisor while only 34% of the corresponding clients agreed with that assessment. Quite a disconnect.

Back to the question in the title – How many other advisors do your clients have?¬†According to Cerulli’s report, which covered over 7800 households, about 25% of advice-seeking households use multiple advisors, with the percentage increasing to 33% among those with investible assets of $2 million to $5 million. That percentage grows to 58% for those with more than $5 million in investible assets.

Clients with multiple advisors also tend to keep less of their net worth with their primary advisor. By the end of last year, only 22.6% of investors surveyed kept more then 90% of their assets with their primary advisor; this percentage fell to 13% for those with more than $5 million.

All of the statistics quoted above showed gains from a similar survey conducted in 2008 – a continuing reaction to the financial crisis.

So, do you really know how many other advisors your clients have? The opportunity here is for those advisors who are able to focus on the entire relationship, even if they don’t have all of the assets. The advisor who plays this role is often referred to as the Alpha advisor (or quarterback). While it may be too late to stop your clients from diversifying among multiple advisors, providing the key service of reporting on all of their assets – whether for a fee or not – should position you above their other advisors. It’s also a great marketing and prospecting tool to help you grow your business and increase client retention.

It doesn’t’ seem that the trend toward multiple advisors is set to reverse itself, especially after the last few months, where images of 2008 are entering our dreams once again. So don’t fight the trend – react to it and succeed from it. Become an Alpha advisor.


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