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.”


Firms offering comprehensive corporate services are more successful than their competitors in winning wealth management business from the executives and business owners among their clients (see the figure below), according to Aite’s research. They stand out because they help executives and tend to win the corporate business before they pursue the executive's wealth management business.

Offering executive benefits – including deferred compensation plans such as 409(a) plans, supplemental executive retirement plans, financial planning for executives and retirement plans designed for leadership, such as 457(f) plans for nonprofit organizations – exposes these firms to executives and positions the firms favorably in the eyes of the executives who benefit. There was a similar advantage for retirement plan services firms with industry specializations while unspecialized firms lagged their specialized peers.

Corporate and executive benefits offerings help financial advisors differentiate themselves when they meet with owners of businesses employing 100 or fewer individuals — companies that are too small for targeting by the giants of corporate services.

For traditional financial advisors, it's hard to stand out on the basis of investment or wealth management expertise only. However, corporate and executive benefits change that. Few business owners hear presentations from financial advisors who can tackle the broad range of benefit and group services that they require.

Owners of smaller businesses may not be aware that there are solutions to some of the problems that burden them. They're worried about the rising tide of federal taxes and the implementation of the Patient Protection and Affordable Care Act. They're struggling with issues such as how to compensate highly paid employees without violating rules about top-heavy retirement plans.

If you can walk in the door with solutions, their eyes will light up. Not only will you educate them about new solutions, but you'll also distinguish yourself from the many financial advisors that only talk about wealth management.


Here are some of our recommendations for building a comprehensive corporate services practice:

  • Educate yourself. The best way to do this is by finding a partner that will jump-start your learning process. The right partner will also offer product expertise and access. Your practice can't afford to hire full-time experts in every field. Get help from a firm that has experts in areas outside your core expertise. These could include group benefits and executive benefits, such as health care plans, nonqualified plans and key man insurance. You need a partner with scale so they can offer you access to institutional-level investment and advisory products with features and competitive pricing that you couldn't offer on your own, along with consulting to help you identify, prospect and sell those products.
  • Identify and approach clients. Once you've educated yourself, you'll recognize the profile of business owners who can benefit from corporate services. You probably already have some clients for whom you can add value immediately with your new expertise.
  • Expand your existing book of business. Leading with corporate services, rather than wealth management, will make you stand out when you approach prospects who are business owners and corporate executives.

For more details see the white paper: Keys to the C-Suite: Capturing Wealth Management with Corporate & Executive Benefits.

James L. Poer is president of NFP Advisor Services Group, which provides a unique integration of service and technology for successful advisors to use with their clients in whatever capacity they choose.

Joseph L. Carpenter is president of NFP Executive Benefits, which provides creative and comprehensive executive compensation benefit plans supported by “best in class” proprietary administrative systems and analytic tools. 

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