For advisors who want to grow assets under management (AUM), finding opportunities to do so within their existing client base can drive major impact without requiring significant marketing spend, sales resources, or service model enhancements.
Identifying and acquiring held-away assets – financial assets that your clients own but are not currently managed by you – represent a powerful way to grow AUM while delivering a more comprehensive and overall more valuable client experience.
Held-away assets include retirement accounts from previous employers, inherited investments, college savings plans, health savings accounts (HSAs), and independently managed assets.
The opportunity held-away assets present for advisors who can bring them under their purview is outsized; research indicates that the average American household has a significant portion of wealth tied up in held-away assets. According to the Investment Company Institute, Americans had $8 trillion invested in 401(k)s in the second quarter of 2024.
So how do you unlock the potential benefits of managing held-away assets?
Goals-based financial planning, a holistic approach that aligns financial strategies with long-term life goals rather than focusing exclusively on investment performance, can help you uncover your clients’ held-away assets and bring them under your management.
As part of a goals-based approach to financial planning, you’ll naturally engage clients in meaningful conversations about their aspirations – whether they want to retire comfortably, fund their children’s education, leave a charitable legacy or some combination thereof – that help you discover information about all of their assets, including those held away.
As you discuss retirement goals, for example, your client might remember a 401(k) from a previous job they’d forgotten about entirely. Or while planning for a child’s college fund, they might bring up an inherited investment account they’ve been hesitant to touch.
These discussions present ways to illustrate how integrating these assets into a comprehensive financial plan offers potential significant benefits to your client, including:
- Enhanced financial coordination. By bringing all of your client’s assets under a single umbrella, you can better ensure their entire portfolio is working in sync toward their goals. Doing so could prevent potential issues like overconcentration in certain sectors, or risk tolerance misalignment.
- More accurate goal tracking. A complete view of all your client’s assets makes it easier to assess whether they’re truly on track to meet their goals, or whether you need to make adjustments. For example, you may discover that reallocating funds from a held-away account significantly improves your client’s chances of achieving their retirement goals.
- Increased value. Managing held-away assets lets you provide more comprehensive service overall to clients, opening up the door to offering tax-efficient strategies across all accounts, ensuring proper asset location, and consistently delivering a clear picture of your client’s complete financial health.
Providing these three key potential benefits to your perceived value as your client’s trusted financial advisor, increasing the likelihood of retention and even referrals.
In our recent whitepaper, The Power of Goals-Based Financial Planning: How Technology Helps Advisors Improve Client Relationships and Drive Growth, we explore the impact of goals-based planning and implementation technology on advisory firm growth, including:
- Uncovering held-away assets
- Positioning to capitalize on the generational wealth transfer
- Deepening client relationships
- Offering multi-dimensional value
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