Unlocking Real Value Blog

AK In The News: Are Small Portfolio Accounts Worth Pursuing?

I was asked to write an opinion piece for Fundfire (A Financial Times Service) on the question of whether it makes sense for advisors to seek smaller accounts as a business-building strategy. This comes in the wake of LPL Financial’s decision to lower the minimums in its model wealth portfolios to $25,000.

While one of the great things about being an advisor is that you can build your business any way that you want, and I have usually shied away from a small account strategy, I have come around to believe that you can be successful with such a strategy – if you build your business the right way.

There are two general principles that advisors should keep in mind when developing an asset-gathering strategy:

  • Always act in clients’ best interests; and
  • Focus on building a profitable and sustainable business.

If advisors consider both factors, they should be able to determine which clientele is best for them.

Now, having said this, and firmly believing that each advisor ultimately needs to set his or her own direction, and understanding and accepting that advisors can make a good living servicing a large number of small accounts, my bias still rests with a larger minimum built around a top-notch service organization that emphasizes a differentiating value proposition.

This leads to long-term, stable and profitable client relationships and a healthy, thriving business.

Contact me if you want me to send you the entire opinion piece.

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