RIAs take a soft approach to cross-selling

Planners use multiple means to show clients they have more to offer than the basics

Mar 10, 2017 @ 4:57 pm

By Liz Skinner

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Registered investment advisers are under increased pressure to grow their business and deepen client relationships, which forces them to sell their full spectrum of services to as many clients as possible. Thus, RIAs have become masters of the cross-sell.

Financial planners use newsletters, radio programs and other media to show how they have solved problems for other clients through tax planning, estate planning or even college planning. Other RIAs have more of a high-tech approach, using software to help identify new areas where they could help clients with their financial lives.

"It can be challenging just telling clients about all the different services that our firm can provide," said Drew Grider, president of The Retirement Network, a hybrid RIA. "When clients meet you as someone who provides retirement planning or tax planning, that's kind of how they tend to keep viewing you."

RIAs that are using these cross-selling methods are gaining additional assets from existing clients, a strategy that's less costly than bringing on a new client, and they're also creating "stickier" clients who are less likely to move their assets if another adviser attempts to lure them away.

(More: Marketing moves advisers should take in 2017)

In its newsletter, The Retirement Network has written pieces explaining the steps someone should take when leaving one company and joining another, and the role their firm can play explaining the benefit changes. Other pieces describe the benefits of an organized financial life and how the firm can help consolidate multiple small accounts.

Newsletters have been a great way to help advisers who are not comfortable with adopting a sales approach to convince a client the firm can help with their other needs, Mr. Grider said.

"Some advisers aren't good at cross-selling, so the newsletter is a great way to help the firm get the word out in another way," he said.

Scott Wentworth, founder of Wentworth Financial Communications, said client profiles inside of newsletters are a great way to "show clients the value of your services, as opposed to just telling them."

For instance, one financial advice firm highlighted its estate planning skills by describing the techniques used on behalf of a client to pass on shares of his business to his son in a tax-efficient manner, Mr. Wentworth said.

Adviser Alexander Joyce, chief executive of ReJoyce Financial, uses his weekly radio show to sometimes describe how people have "won" with their Social Security claiming strategies or Medicare coverage.

"That's led current clients to ask about whether we could help them with those things," Mr. Joyce said. "We want to maximize their relationship with us."

It's more efficient to get more revenue from a current client than to go find a new one, he said.

(More: Why advisers should update at least one tech system every year )

Another approach to cross-selling involves visualization and encouraging client engagement.

Adam Holt, chief executive of Asset Map, a fintech firm with software that advisers use to create a visual picture of a client's financial life, said the tool shows clients facts about their life, but illustrates anomalies like large cash positions, or deficiencies in healthcare insurance or planning.

"Advisers are looking at the legal, tax, insurance, and investment implications of how a client has structured their life," Mr. Holt said. "If you can talk about all the things in their life, you are perceived as a better advocate for their life."

The No.1 outcome for advisers using Asset Map with clients is a reduction in complexity, he said. Advisers are asked to clean up and consolidate old 401(k)s and individual retirement accounts, and invariably they end up bringing on more assets to manage.

Similarly, Adviser Jonathon Schultheiss of Gate City Advisors said his firm uses Trak software with retirement plan participants to show them what's in their plan and whether they are "on track" for retirement.

Just recently Mr. Schultheiss presented a chief financial officer for a company with his Trak report and was dismayed by how poorly prepared he looked. That led the CFO to reveal $750,000 of IRA accounts, and when those assets were plugged into the software the "on track" looked better but there were recommended investment changes for those assets.

In the end, Mr. Schultheiss won management of those IRAs, as well as another $900,000 in non-qualified money the participant had in a brokerage account.

"The software focuses on answering the question, 'Can I retire?,' which is something that's going to get people talking," said Ed Dressel, president of the firm that makes Trak.

When people feel like they are being helped they are much more likely to talk about the rest of their situation, which is what leads to the cross-sale, he said.


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