Updated Wednesday, July 30, 2014 as of 5:14 AM ET
Practice - Client
How to Bring in Clients' Outside Assets
Thursday, July 10, 2014
Partner Insights

Clients often have assets that you don't handle, or even know about. Such assets include self-directed investments and retirement accounts, such as 401(k)s. Often they are common everyday assets—stocks, bonds, savings accounts and stock options that have scattered to the four corners.

In their eyes, particularly in the wake of the recession, they are spreading the risk by getting advice from multiple advisors.

The result is as you may expect: a jumble of assets that don’t complement each other and lack diversification.

The challenge is convincing them you’re the one to advise them.


Larry Luxenberg, an advisor in New City, N.Y., recommends advisors start prospecting for these errant assets starting with existing clients. “Right now, the challenge for the advisor is to consolidate these held-away assets with the assets already placed with him,” he says. “The advisor is losing out on assets not under his management.”

The solution, Luxenberg says, is to sit down with clients, identify their goals and priorities and develop a financial plan. If an advisor is doing a good job for clients, additional assets “will drift in,” he says. “But a systematic approach can accelerate that dramatically.”

Once advisors have mapped out a financial plan, as part of a quarterly meeting cycle or a comprehensive annual review, they can point out the benefits of consolidating assets under one advisor, and the difficulty to monitor a financial plan if the assets are spread in multiple directions.

Technology is also playing a bigger role. Some advisors are taking a holistic approach and using account aggregation tools.


Tom Ausfahl, principal of Greystone Wealth Advisors in Mount Kisco, N.Y., uses aggregation tools frequently in handling outside assets of clients, particularly retirement accounts such as 401 (k) plans. “We want to provide a comprehensive holistic approach to clients,” he says. “We don’t want to advise clients until we know exactly what they have in the way of assets. We pull in the data from outside assets such as 401(k)s, and advise when it’s necessary to make a change to an outside account in order to maintain their overall asset allocation,” says Ausfahl. “By doing so, we can have an ongoing overview of the total assets.”

The added benefit, he says, “is that some clients really value the service and are willing to pay for it.”

At every stage, consolidating assets holds out the possibility of better decisions for clients and is beneficial to advisors in the quality of work they can produce and the compensation they earn for doing it.

Bruce W. Fraser, a financial writer in New York, is a contributor to Financial Planning. He is working on a book about the ultra-wealthy.

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