Updated Friday, July 25, 2014 as of 5:07 AM ET
Blogs - Idea Exchange
Win Business Owner Clients With Corporate Services
Tuesday, December 10, 2013
Partner Insights

Corporate executives and business owners need help with more than just their personal wealth management, but most financial advisors aren't approaching them effectively or satisfying the breadth of their needs, according to research by the Aite Group.

The competition among traditional financial advisors providing corporate services -- in particular executive benefits -- to businesses is limited. According to the study, only 5% of surveyed financial advisors offer corporate services as part of their standard offerings, and prospects quickly recognize their value. (Full disclosure: Our firm, NFP Advisor Services Group, commissioned the study which was conducted by independent research firm Aite Group.)

When advisors add corporate services such as deferred compensation, executive benefit programs and defined contribution/benefit plans to their menu of services, they serve business owners and executives better. They also differentiate themselves and boost their revenues compared to financial advisors who focus solely on wealth management. This is especially true when the advisor is already well-positioned to win the assets resulting from a significant liquidity event for the executive, such as the sale of a business or an IPO. While the need for specialized expertise scares off some advisors, that expertise is available from the right partner.

The new Aite whitepaper, “Keys to the C-Suite: Capturing Wealth Management with Corporate & Executive Benefits,” compares key characteristics of different types of practices and highlights best practices for acquiring and serving corporate clients and business owners.


Most financial advisors focus solely on wealth management in their practices. Aite’s survey of 400 advisors revealed only 20 with any corporate services expertise, but these were among the most profitable practices.

The survey compared the following practice types, which vary in degree of industry specialization and breadth of corporate services:

  • Wealth management-focused services, which mainly refer their small business clients to third parties for corporate services
  • Retirement plan services with no industry specialization
  • Specialized retirement plan services focused on a specific industry
  • Comprehensive corporate services

Comprehensive corporate services practices offer many services beyond investment and wealth management. Some, such as life insurance and defined contribution retirement plan services, may be familiar to advisors. Others include executive benefits, such as deferred compensation, nonqualified plans and key man insurance, and, to a lesser degree, group benefits and/or health care plans.


Among the practices surveyed, those offering comprehensive corporate services exhibited a top-line revenue advantage. Their total revenues averaged $2.6 million, which puts them about $1 million to $2 million above the averages for retirement plan and wealth management practices (see the figure below).

Regarding the metric of average revenues per client, retirement plan services practices with an industry specialization outpaced comprehensive corporate services practices, retirement plan services practices with no specialization, and wealth management practices. However, specialized retirement plan services providers were unable to turn their higher revenues per client into an overall revenue advantage in comparison to those providing comprehensive corporate services, for reasons we'll explore below.

The revenue advantage of comprehensive corporate services providers may surprise some financial advisors. Traditional financial advisors often state that they believe the margins on corporate services are too narrow, so they aren’t interested in offering them. It's true that margins are narrow, but corporate services clients offer advantages because they’re bigger – much bigger – than the typical wealth management or retirement plan services client.

First, while the fees for comprehensive corporate services may be lower margin or only generate one-time premiums, you're typically collecting those fees for services you wouldn’t otherwise offer a wealth management client, so they add up quickly. Second, corporate services clients are stickier than other clients, which will help when you sell your practice. Companies don't like disrupting the complex web of services that their company needs. Finally, corporate services clients are a great source of more profitable wealth management clients. When company owners sell their firms or participate in an IPO, they look favorably on the financial advisors who provide them with corporate services, and are often already familiar with their personal wealth through their executive benefit consulting. These financial advisors typically get the first opportunity to manage the proceeds from the liquidation event.

Taking advantage of owners selling their businesses does, however, require patience. It may take years to reap the full benefits of these relationships. Here's what one of our interviewees said about acquiring a client for corporate services even if they represent a smaller opportunity upon commencement of the relationship: “You service them like they are already an A client or a high B client. You want to be there to catch their liquidity event. From 2007 to 2013, we tripled our gross production because there were liquidity events — a half-million-dollar client became a $10 million client.”


(1) Comment
A very good piece of advice indeed to make your profitable financial advisory service a gold minliente. If you could convert your plain vanilla wealth management company into a full-service financial advisory company offering a range of corporate services, revenue would sky-rocket. Your AUM would also multiply every time your client came into money either on account of an IPO or sale of stake. However tread with care, you would need specialised personnel to provide these kinds of services. I wonder however why is it that only 20 out of 400 advisory firms opted for providing comprehensive service. Would like to know where exactly is the hitch.
Posted by KIMMY B | Thursday, December 12 2013 at 12:57PM ET
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