How big is the goldmine WITHIN your business?
Best Practice Advice & Sales & Marketing for Professional Services & Strategic Issues

How big is the goldmine WITHIN your business?

January 23, 2013

by Tony Vidler

It's Gold!Just how much opportunity is sitting inside your business today?  How much new business is waiting for you inside your existing database?

Hint:  it’s Gold.

I have been reading a fascinating report from a North American firm recently (referenced below), and want to just focus on one key finding – as that finding supports something which we have instinctively known for a long time:  A lot of clients do not give advisers all their investable funds.

The report looks at the difference between elite adviser performance and that of the average adviser in 2011, which was post GFC and a time when many investors were still reeling – as were many advisers.  It did focus on wealth management advisers, and measured performance essentially in simple terms:  number of new clients added, and amount of new assets under management added.  They ended up defining “elite adviser” as someone who had added 5 or more $1,000,000 plus AUM new accounts in the measurement period.

Here’s a quick takeout of some the performance findings:

Average number of new clients added

All advisers:     25

Elite Advisers: 16

Average amount of new AUM added

All advisers average:     $9,715,753

Elite Advisers average: $25, 141,379

Average AUM added from existing clients

All advisers average:      $2,942,376

Elite Advisers Average: $7,813,793

There was an even larger variation in the performance of the average advisers and the elite advisers in terms of new business gained via entirely new clients – but we shall leave that for another article soon. The obvious conclusion from this research is that the elite advisers are bringing in fewer brand new clients, but of higher average value.  The Elite advisers are doing a lot more business with existing clients than their peers.  Elite advisers are doing a lot more business full stop – including getting more new clients (and nearly 3 times the AUM from new clients that the average adviser).

What I find particularly interesting though, and which is a true revelation, is the sheer volume of business which is sitting inside an existing business.

Let’s just focus on those two numbers….the average adviser is getting nearly $3 million in new AUM from existing clients.  The Elite adviser is getting closer to $8 million in new AUM from their existing clients.

The question that any adviser must be asking by now is “how did they do it?” gold-rock

The answer is remarkably simple:  elite advisers spend more time getting personally connected.  It is their primary marketing activity – and the more discerning clients with greater funds value that style and approach.

In fact two thirds of the very top advisers spent two thirds of their marketing efforts and activities on one of two things:

1.  Strategic Networking

2.  Obtaining introductions

And these two activities accounted for well over 80% of their business results.

No matter how good advisers think they are, or how good a job they are doing with their clients, there is clearly a goldmine waiting for a prospector – already sitting inside the business.  Perhaps more importantly though, there is clearly an ongoing seam of gold within the business that can be tapped with strong personal networking and connection.  New clients, or higher than average value, are out there waiting for the right adviser to assist them.

They value personal introductions or professional referrals through their strategic professional network.

What do you think you should focus on if you want gold results?

Reference:  “Marketing Tactics of Elite Advisers”, by Matt Oeschsli, Cetera Financial Group.

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Comments (2)

  • Great post Tony! It lines up with a key marketing strategy being improving what you do for your current clients.

    David Rae
    • thanks Dave, I appreciate that. I’m glad if it helps you with your clients too. I think I’ll be writing one or two more posts about the findings and implications of this piece in the next week or two as well – so stay tuned!

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