Wealthy clients hold more assets than advisors think, SEI research reveals

Seven in ten wealthy Americans say their financial advisor has never asked to manage a larger share of their assets despite 95% of advisors saying they actively try to consolidate client assets.

SEI Investments Company surveyed 518 financial advisors and 302 high-net-worth investors (defined as U.S. adults between the ages of 50 and 70 with at least $1 million in investable assets) and found a persistent communication gap that may be quietly constraining growth across the advisory industry.

According to the research, 88 percent of high-net-worth investors keep some assets away from their primary advisor, and nearly half (47%) have placed three-quarters or less of their total assets under that advisor's management. However, 81 percent of advisors surveyed said they tell clients they offer household-level portfolio management.

"Our research found a striking disconnect between what advisors believe they are communicating and what investors are actually hearing," said Arthur Worthington, Senior Managing Director of Strategic Business Development & Integration at SEI. "That gap has real implications for firms' organic growth."

The findings arrive at a moment when advisory firms face mounting pressure to grow without relying on acquisitions. As InvestmentNews has reported, organic growth remains the core engine of sustainable advisory firm value, but many practices have allowed market appreciation to mask stagnant net new asset flows.

The tax savings trigger

When investors were asked what would motivate them to move more assets to their primary advisor, the answer was unambiguous: 46 percent cited tax savings as the leading factor, ahead of increased retirement income and lower fees.

More than one-third said they would be highly likely to consolidate additional assets within a year if an advisor quantified the potential tax reduction in specific dollar terms.

The problem is that most advisors cannot do that. Only 49 percent of survey respondents said they are able to put a concrete number on the financial benefit of every household portfolio management practice they offer. Advisors cited a lack of centralized data, an inability to view all client accounts in a single interface, and lean staffing as the primary obstacles.

The operational burden

Advisors who already provide these services are spending significant time doing so.

Those who deliver services such as asset location, rebalancing, tax-loss harvesting, and tax-smart withdrawal strategies across multiple household accounts spend an average of 48 hours per month on related tasks. For advisors with the largest books of business, that figure rises to 65 hours per month, and to 67 hours for those serving the wealthiest clients.

Much of that work remains manual. Some 30 percent of advisors cited a lack of adequate technology as the primary barrier to providing or expanding household-level management services. The operational cost of delivering UMH at scale has effectively created a ceiling on how many clients advisors can serve in that way.

Worthington framed the technology gap as a solvable problem. "Advisors need technology and operational infrastructure that can make household-level value tangible, measurable, and personal to each investor," he said. "More than one-third of investors said they would be highly likely to move additional assets within a year if an advisor quantified the tax savings in dollar terms, yet only about half of advisors say they can consistently quantify those benefits."

The SEI research aligns with a broader industry trend. Advisors better not give up on organic growth even as M&A activity remains elevated with practice management experts noting that the clearest path to wallet share expansion runs through existing client relationships rather than net new acquisitions.