4 growth strategies from a financial adviser's playbook

Competitive advantage can come through deeper relationships with clients. When thinking about how to best engage their clients, the top financial advisers — private bankers and multi-family offices — use the concept of “wallet share” to frame their goals and strategies for their existing clients.

For a financial adviser, wallet share denotes what percentage of the total assets of a client is managed by that particular adviser. Financial advisers are always jockeying to increase their share of clients’ assets. As you go up the financial scale to the ultra-affluent and family offices, they rarely use one financial adviser, unless they have tremendous trust in that individual.

However, every financial adviser knows that the easiest path to increasing their assets under management (AUM), which is a core goal, is by expanding their wallet share of their client’s existing assets. This same framework and tactic can be used by residential real estate agents to grow their business with existing clients.

Here are four tactics that draw from the financial adviser’s playbook for increasing wallet share that can be applied as growth strategies for agents:

1. Understanding that residential real estate is part of your client’s overall balance sheet

In the financial advisory business, most advisers (even those at the top end of the advisory space, including the top multi-family offices I work with), attempt to help their clients understand their risk not only across their liquid assets, but across their illiquid assets, like their operating businesses (where most of them derive their money) and the real estate, both commercial and residential.

Most of these service providers, including accountants and attorneys, are ill-equipped to provide the data and information necessary to help their clients understand the risk residing within the residential component of their real estate portfolio. 

However, framing and discussing your client’s residential assets within the context of their overall balance sheet and how they look at risk can immediately elevate your role and the conversation.

2. Offering clients a consolidated performance report of their residential real estate assets

Every financial adviser offers their client a daily, monthly or quarterly performance report on their financial assets and how they performed against generally recognized benchmarks.

How many agents do this for the asset which they assisted in acquiring? How many agents do this across their client’s entire residential portfolio, helping them understand the overall performance against benchmarks and markets (if possible)? 

Most high-net-worth individuals will have at least one or two properties, and as you move toward the ultra-affluent and billionaire, that number can be anywhere from three to five (or sometimes more).

It may not be possible to show how assets are performing against benchmarks, but it’s certainly possible to pull together all the data on a portfolio of residential assets and give their valuation at the time of purchase and current market valuation.

Family offices use reporting systems like Addepar, Archway and BlackDiamond to consolidate and report the data on their assets in an integrated and comprehensive fashion.

Yet, notably absent from these reports are portfolio views of their residential assets. This represents a unique opportunity for agents to build a portfolio view of all their client’s residential assets and deliver that on a quarterly basis.

There is no high-net-worth, ultra-affluent or billionaire who would not look at this type of report to see how their residential assets are performing from a portfolio perspective — even if they bought with the intention of only living in these homes or sharing them with families.  They did not get to their place in life without having a strong sense of curiosity and control.

This approach can also be used for attempting to win a listing as well as positioning you to increase your wallet share. The top accounting and legal firms serving family offices are positioning themselves above the asset managers by sitting on top, and aggregating all the data and information that gives them greater leverage. 

Agents can implement this type of strategy for the residential asset portfolio. These legal and accounting providers are known as “Centers of Influence” (COI). This strategy can help agents use their social capital to convert their sphere of influence into becoming a COI with wealthy high-net-worth and ultra-high-net-worth families.

3. Build a network of regionally focused experts

If you did craft a value proposition around both the total balance sheet of your client as well as offering them a portfolio view of their properties, you need to have an ecosystem of partners in place to help provide expertise and potentially execute a transaction across the geographic regions represented in your client’s portfolio. 

Agents are good at building these types of networks and understanding the economics involved should a transaction surface. Every residential real estate transaction in your client’s portfolio should start with or involve you.

4. Offer value to your clients by introducing them to other clients they want to (or should) connect with

There is a large multi-family office on the West Coast that counts a majority of the top technology billionaires among its clients. It’s adapting a smart strategy to identify and inventory its clients’ passions, hobbies and interests, with the goal of making introductions and curating a community among clients. 

Everyone wants to associate with their peers by level or passions. This offers a significant value proposition and positions you down the road for a potential referral introduction. It’s an important way to build social capital among your clients.

Building these type of introductions among your clients also reinforces connective trust tissue. It not only leads to increased wallet share but also to increased market share through referrals. 

In conclusion, the concept of wallet share is a core focus for every financial adviser. They are constantly attempting to increase the wallet share of their client’s overall assets.

Expanding wallet share is the lowest hanging fruit to drive organic growth for a financial adviser — and it can be the same for an agent. In a similar fashion, real estate agents can employ the same concept of wallet share when viewing how to grow their business with existing clients who have portfolios of residential owner-occupied assets.

By helping wealthy families assess and understand their entire portfolio as part of the overall balance sheet, an agent can advise on the entire portfolio. Should a transaction opportunity surface, they will be well-positioned to increase the wallet share of that client’s business.

David Friedman is the co-founder of WealthQuotient. Connect with him on LinkedIn or Twitter. Kofi Nartey is the founder of SOCIETY Real Estate + Development. Connect with him on Facebook or Instagram.