How To Build a Million Dollar Asset Management Business by Steve Moeller If you want to be on the leading edge of this movement, you need to switch from selling to advising. We'll look at five key steps to transform your business into a million dollar asset management business. Here are five steps to make the transition from selling to advising: Convert your eligible existing clients. Duplicate your past successes by "cloning" your best clients. Cultivate and penetrate "rich niches". Create strategic alliances with centers of influence. Help the Media Make You a Star Convert your existing clients Your biggest assets are your existing client relationships. So don't discard your existing practice. Use it as a solid foundation to build upon. If you've been in the financial services industry for a number of years, your clients probably have somewhere between $4 and $15 million in mutual funds and variable annuities. The fastest way to get started in the asset management business is to simply convert this money. But, a comprehensive asset management service can enhance your clients' comfort with their money. They like the idea of having an ongoing relationship with an investment professional. Many of them want help managing their assets. Advisors who have converted their accounts find their clients are very enthusiastic about asset management. First, draw up a list of all your clients who qualify for the managed accounts you want to offer. Stick with conservative money management firms. The more conservative the client perceives your methodology the more money you will get. Once you have identified the clients that have the money and the interest in professional money management services, call them up and invite them in for a meeting. Explain to them the benefits of fee-based money management as opposed to the traditional approach. Cover the advantages for you and them. Practice on your favorite clients and be sure to use an Investment Policy Statement (IPS). This is a formal written document that details your client's goals, risk tolerance and exactly how their money will be managed. Duplicate your past successes by cloning your best clients If you're like the typical advisor, you probably have a handful of favorite clients. The type who genuinely appreciate what you do for them, are a pleasure to work with, and are happy to compensate you for your services. People who come to you through a referral are 15 times more likely to become your clients than similarly qualified prospects. They don't have unrealistic expectations. They don't make unrealistic demands. And cloning practically guarantees that they'll be sold on you before they even meet you. You can expect to clone one to three new clients for each of your best clients. Eventually, you'll get to the point where you'll be referred to new clients who are even wealthier than your existing clients. Cloning your best clients is the most cost efficient system for building an asset management business. This business is based on relationships--not transactions. In a sense, you become the product. If you get good at the referral process, you should be able to create a never-ending stream of qualified, motivated new wealthy clients. Leverage your time and resources by conducting sponsored group presentations. Many advisors like to speak publicly. But open public seminars are very expensive to promote and your audience is usually a cross section of all income and net worth segments. Here's a sobering fact: 10% of the households in this country control more assets than the other 90% combined. The key to making serious money in financial services is to stop wasting time on the bottom 90% and to "target" your efforts on the top 10%. These are the people who need your expertise and are happy to pay for it. Financial advisors who market to this elite 10% routinely generate million dollar annual incomes. How do you identify and attract these elusive prospects? Easy. You simply conduct sponsored group presentations for organizations with high concentrations of the "top ten-per centers With a little research you can identify an organization within your community that have a high concentration of the top 10 percenters. They usually meet monthly and are always looking for speakers who can help them meet their goals and solve their problems. Effective research is also the key to discovering the unique financial concerns of each niche market. Once you understand each niche's financial concerns, you can focus on the problems that you can get paid to solve. Then create a customized presentation explaining how you can help solve those financial problems. The new prudent investor rules are good foundations for your presentation. Talk about concepts, challenges that people in their situation face and how professional money managers can help them to achieve their goals. Stay away from selling products Meeting planners, human resource directors and program chairpersons are turned off by product pushers. However, they are always looking for qualified speakers who can provide useful information for their people. Tap the incredible power of target marketing by cultivating rich niches. When you speak for a group that is particularly enthusiastic and interested in what you have to offer, take a closer look at that industry. Ultimately you should become very familiar with their unique problems and opportunities. Write articles for their trade magazine and speak at their convention and chapter meetings. The goal is to plant deep roots in fertile soil. Cultivate relationships with people in a common community. Stay away from mass marketing it's not very effect when you're trying to open a minimum of $50,00 or $100,000 accounts minimums. There are specific niche markets that you should look at closely. One is retirement rollover; another is personal investment portfolios--primarily professionals, business owners and key corporate executives. Focus on people over 60, they control most of America's wealth. Look at qualified pension plans. The pension plan market is huge, growing daily. Target plans with under 50 employees and $250,000 to $3 million in assets. These are under-prospected plans and you'll typically be dealing with the owner who can make quick decisions. Create strategic alliances with centers of influence. Strategic alliances could be CPAs, association executives, or key people in your target market. They could also be venders such as pension plan administrators. My favorite centers of influence are CPAs. The secret for getting an endless stream of qualified prospects from CPAs is to stop asking them for referrals and concentrate instead on building strategic alliances. You must be able to solve major problems for them. Learn about their problems through research interviews. Look for problems that you can get paid to solve, like too much money and not enough time or expertise to manage it themselves. Investors are becoming more and more resistant to traditional sale approaches and to paying commissions. If you work with conservative money managers, manage your clients expectation and develop a written investment policy statement for each client, you'll find the fee based asset management is an incredibly fun and profitable business to be in. Copyright © 2000 by Steve Moeller, Tustin, CA. All rights reserved. Steve Moeller is one of North America's foremost experts on marketing financial services to the wealthy. Over the last decade, Steve has studied and researched the best strategies for building a super profitable financial services business. He is a highly sought-after financial services industry speaker and management consultant. He is the author of "Effort-Less Marketing"and other learning tools and coaching programs. To find out more about his coaching programs, learning tools or to find out how to hire Steve to speak at your meetings, call 800-678-1701 or e-mail bizviz@businessvisions.com. For a free subscription to Steve Moeller's Client-Centered Advisor e-mail editor@businessvisions.com.