White Paper

Best Practices of Today’s Elite Advisors

Executive Summary

This paper from The Oechsli Institute and First Clearing is designed to provide firm principals and financial advisors with some of the latest insight into “best practices” for reaching and serving today’s affluent clients. This insight is drawn from the results of The Oechsli Institute’s 2015 Affluent Client Research, which is presented in a companion paper, “Understanding Today’s Affluent.”

One of The Oechsli Institute’s primary objectives in conducting such ongoing research (over nearly two decades now) is to uncover trends related to affluent investors and financial advisors. Our intention is to better understand the relationship between these two groups — how clients and advisors meet, work together, and make smart money decisions. This year, we’ve noticed a number of industry trends continue:

  • The phasing out of the one-dimensional investment advice model in favor of a more holistic planning approach.
  • The client-advisor relationship expanding from purely business, to business and social.
  • Affluent families, including spouses and children, becoming more involved in the advisory relationship.
  • Technology improving advisor productivity, financial planning, and the overall client experience.

At a glance, none of this appears revolutionary. It seems like common sense. Yet when you take a closer look at the general population of financial advisors, it becomes apparent that common sense isn’t always common practice.

The advisors whom we call “elite advisors,” however, are supremely aware of these trends. It’s why they’re elite; they’re always working to improve. Right now, we see their actions focused on two interrelated areas:

1. Relationship Management. Elite advisors are able to exceed the expectations of their affluent clients in terms of services provided, breadth and depth of knowledge, professionalism, and personalized service. Elite financial advisors develop loyal affluent clients who are advocates.

  • 82% have broadened the relationship they have with their affluent clients to include a social component. (Affluent clients rank their financial advisor’s overall performance in key metrics 13 to 14 points higher when the relationship is expanded to include a social component.)
  • 0% have lost an affluent client to a “robo-advisor.”

2. Relationship Marketing. Recognizing that the affluent distrust traditional marketing tactics, elite advisors have moved away from the traditional marketing tactics of cold-calling, direct mail campaigns, public seminars, and asking for referrals. They’ve developed a more nuanced, personalized approach that involves some combination of social prospecting, intimate events, referral alliances, and personal introductions. These elites understand that social prospecting in affluent circles is what cold-calling was 35 years ago: It’s everything in the world of marketing to the affluent.

Through relationship marketing, elite advisors are acquiring $1 million+ clients far more successfully than the general population of financial advisors.

On average, over a 12-month period:

  • 46% brought in between $10,000,000 and $19,999,999 in new assets from new clients.
  • 35% brought in between $20,000,000 and $29,999,999 in new assets from new clients.
  • 19% brought in $30,000,000 or more in new assets from new clients.

In this report, we’re going to share with you how these trends have shaped today’s elite advisors, the impact this is having on their respective practices, and the disparity between elite advisors and the general financial advisor population (GFAP).

You’ll see references to affluent investor and elite advisor data from our research, which we’ve organized into four key areas of an elite advisor’s practice:

  • Wealth Management
  • Practice Management
  • Client Loyalty
  • Business Development