Markets spurred AUM growth for professionals over recent years, but with a downturn, financial professionals need effective strategies for winning new clients and new assets if they’re going to grow. But what are the key factors that can help you achieve this goal?

There are several critical success factors that can help ensure business growth in the private wealth industry. Here, we explore these factors and how they can be applied to your own practice.

Demonstrating Value Beyond Asset Allocation

According to Philipp Hecker, Chief Executive Officer of Bento Engine, a company empowering financial advisors to deliver proactive advice at scale, “savvy advisors and their clients are ignoring the headlines, recognizing that wealth management entails more than just asset allocation, investment management and chasing returns.”

The most critical success factor for private wealth professionals was demonstrating value beyond asset allocation. This means shifting the focus of your practice from portfolio management to comprehensive financial planning, which can strengthen long-term relationships with clients. By offering services such as retirement planning, estate planning, insurance planning, and tax planning, you can help clients achieve their long-term financial goals and build a strong foundation for your practice.

Building Relationships with Next-Generation Heirs

Another important success factor is building relationships with next-generation heirs. This can be a time-consuming process, but it’s worth the effort as it can help you retain assets when client wealth is transferred and even add new clients.

According to Barron, “cultivating relationships with the next generation of clients has become a priority for wealth managers. Approximately $60 trillion in assets is slated to transfer from primary clients to their heirs within the next 25 years. But only 13% of heirs retain their parents’ advisor.”

That makes attracting and servicing next-gen clients an important investment in a firm’s long-term growth. By building strong relationships with the next generation, you can ensure that your practice will continue to thrive for years to come.

Investing in Technology Upgrades

Private wealth professionals also see investing in technology upgrades as a critical step to ensuring success. This can include investing in a customer relationship management system to make service efforts more efficient or digital tools that give clients a self-serve option for routine requests. Although the biggest barrier to entry is the cost of implementation, the benefits of increased digitization are worth the investment.

Streamlining Your Client Base

Streamlining your client base is another success factor that can help your practice grow. By focusing on your most profitable clients and shedding unprofitable ones, you can maximize your revenue and improve your bottom line. This can also free up more time to focus on your most important clients and build stronger relationships with them.

Succession Planning

Although less critical than other success factors, succession planning is still an important consideration for business growth in the private wealth industry. By planning for the eventual transfer of ownership or leadership, you can ensure a smooth transition and maintain continuity for your clients. This can also help you attract new clients who value stability and long-term relationships.

Dwindling Demand for Crypto

Finally, private wealth professionals see meeting demand for crypto as a less critical success factor. Although it’s not in their area of expertise, it’s important to stay informed about this growing trend as more clients are looking to invest in digital assets. By partnering with experts in this field or learning more about it yourself, you can offer your clients a broader range of investment options and stay ahead of the curve.

In conclusion, there are several critical success factors that can help ensure business growth in the private wealth industry, including demonstrating value beyond asset allocation, building relationships with next-generation heirs, investing in technology upgrades, streamlining your client base, succession planning, and meeting the demand for crypto. By focusing on these factors and tailoring them to your specific practice needs, you can achieve long-term success and growth in the private wealth industry.

Are you starting off in the wealth management industry or are you planning to switch roles? The Anderson Search Group can help you find the right match.