Aegon and NextWealth research suggests just a quarter track this

Just a quarter (26%) of advisers are tracking their ‘share of wallet’ when it comes to clients’ investable assets, with those that do not having been warned that they could be missing a growth opportunity.

Survey responses from more than 200 financial advice professionals, shared in Aegon and NextWealth’s Organic Growth for Financial Advice Firms report, suggested that while only one in four are tracking the ‘share of wallet’ metric, over a third (36%) are looking to boost the level of existing clients’ asset under advice in growth bids.

The benefits of ‘share of wallet’ tracking are not limited to growth goals, but could also help advisers to prepare and executed more tailored financial plans and improve client outcomes, according to report findings.

Advisers who had a formally defined profile of their ideal target clients were twice as likely to track ‘share of wallet’ than those with an informal idea. This rose to five times more likely than those who had no target client profile, the research found.

“There are lots of elements that go into building and deepening a relationship between an adviser and their client – from the core fact find and attitude to risk, to the more personal aspects like understanding their savings goals and life beyond the economics,” said Aegon UK managing director – adviser platform Stephen Crosbie. “Although it might not seem like it at first, the concept of share of wallet could represent a considerable opportunity to improve both of these aspects.”

Crosbie noted that “from a purely advice-led perspective”, tracking this could help advisers to “spot potential strengths and opportunities or gaps and threats within their client’s entire portfolio, empowering coordinated plans, informed decisions and possibly better financial outcomes.”

Crosbie further pointed to relationship benefits.

“It shows a willingness to understand the client more deeply and where their priorities lie, which can go a long way in showcasing how you’re putting the client and their complete financial wellbeing above all else,” Crosbie said. “This may strengthen trust and open new conversations that allow you to then bring their wider assets onboard and make those better decisions.”

Good management information should serve as the “foundation of strong businesses and strong client relationships”, noted NextWealth CEO Heather Hopkins.

“One firm told us their data showed the most successful client relationships were those where they managed all of a client’s investments,” she said. “That insight gave them the confidence to have more of those conversations, and clients have responded positively.”

Source: PA