Apr 4, 2022

InvestmentNews: Attracting new clients is the key to increasing value

young woman speaking with a couple, gesturing with a pen in her hand

After a decade plus upswing, investors aren’t the only demographic spooked by the return of market volatility. The end of the longest bull market in history also has financial advisors and principals on edge as they evaluate what a decline in AUM could mean to the values of their firms.

In his 75th bi-monthly practice management column for InvestmentNews, Allworth Co-CEO Scott Hanson suggests that advisors focus on something they can control, which is getting back to basics and marketing to bring in new client assets.

From the article:

Attracting new clients is the key to increasing value.

With a record number of advisory firm mergers and acquisitions, over the past five years most advisors have seen the value of their practices skyrocket.

Despite this, due in part to the return of volatility to the market, nobody knows for certain whether valuations will continue to rise or start to fall in the future.

Since you have no power over what the demand for firms will be tomorrow, the key is to focus on what you can control.

And what is the number one (and, surprisingly, most often overlooked) driver of value for a financial advisory firm? The ability and desire to bring on new clients.

If you control an advisory firm or even a small practice, odds are you started in this business the hard way. You worked as a “producer” for either a wirehouse or an insurance company and your success was based on the number of clients, or accounts, you could acquire. The advisors who were not successful at this, washed out, while those who figured out how to prospect and convert clients managed to survive.

Scott Hanson, Co-Founder, Allworth Financial

Read the full article at investmentnews.com