Wealth Management: What’s in it for You and Why is it Important to Your Firm?

Nov 29th 2011
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By Tony Batman, chairman and CEO, 1st Global

True wealth management firms help their clients with three macro issues: wealth accumulation, wealth protection and distribution and wealth transfer. The spotlight on wealth management is a result of increasing demand from clients, especially baby boomers, for customized personal services. As they struggle with complex wealth preservation and distribution, and protection and transfer issues emanating from their impending retirements, boomers require and are actively seeking professional assistance.

So what’s in it for you and why is it important to your firm? The following information presents several benefits resulting from offering wealth management services to your clients.

Offers satisfaction from your work

The number one benefit of a wealth management initiative for your firm is the satisfaction you can feel from your work. You have probably given advice to your clients on many financial issues: investments, retirement, and insurance. For years you may have “outsourced” your advice, allowing clients to find and use their financial advisor of choice to implement your recommended solutions. Often, the results have not been fully in line with what you or your clients planned for.

Forget about who is to blame. Consider this breakdown between your advice and clients’ solutions to be a problem that you have the power to address. By taking control of how your clients solve their financial challenges, you add a level of professional service that adheres to the professional ethics you profess: serving in the best interest of your clients. Your mission is to improve your clients’ financial lives. Stand confident that your professional service is at a higher level than other professionals. Your clients will tell you that, but you have to give them the opportunity.

Raises your standing as a professional

Wealth management can raise your standing as a professional. To understand more clearly the issues your clients face, you need to educate yourself. Whether through workshops, Webcasts or other means, you can gain valuable and practical knowledge about the Method 10™ wealth care issues of your clients and how you can help them, directly or with the help of resource partners.

Impacts your business skills

A wealth management practice also positively impacts your business skills. As your practice grows, you need to grow as a leader and think like a CEO. As a CEO, you must manage your staff, drive their activities, and reward their successes. As a leader, you must communicate the wealth management initiative to all your partners and staff. Wealth management requires that your firm implement systems (meeting system, marketing system, staffing system); you are the driver of these systems. As the leader of your firm, you must act as liaison and develop resource partners.

A commitment to success means change – change in the way you serve your clients, change in the way your firm is organized, change in how you approach your profession. You can choose to fear and avoid that change, or you can choose to embrace it. The road to world-class wealth management is not easy, but nothing worthwhile ever is.

Unlocks the potential value of your firm

Wealth management is the key ingredient in unlocking the potential value of your firm. Many firms label themselves “successful,” but they fail to define the details of what that success is. At 1st Global, we believe that any definition of success must be clearly articulated. A vision without clarity is merely an illusion.

To achieve success as a wealth management firm, your results must be sustainable and predictable. Industry studies and our own experience have shown that there are real quantified standards of success for wealth management firms. Leading wealth management firms have these three key financial definers:

  • $1,000,000 wealth management revenues ($500,000 for solo practices)
  • 20 percent annual growth rates
  • 22.5 percent EBIDTA

No firm begins with a wealth management unit operating at these impressive levels. There is a predictable evolutionary path that firms follow on the way to true wealth management. The traits that represent a growing, successful firm are the depth and breadth of client services and the profitability that results from the increased services.

The evolution to wealth management for your firm can be measured in the following ways: depth and breadth of Method 10™ solutions offered to clients, structure and organization of your practice to offer client services, the catalyst for client engagement, and financial results.

Generates revenue and services clients holistically

Naturally, few firms begin as true wealth managers. Instead, at both the professional and the firm level, your practice will undergo a growth process over time, increasing its ability to generate revenue and service clients in more sophisticated and holistic fashions. The profitability perspective should be measured as total pretax income per owner, including salaries and profit distributions. The client perspective can be measured in terms of revenue, wallet share, breadth and depth of Method 10™ services provided per client, and the revenue per service or client satisfaction scores. As indicated, the client perspective correlates strongly with the financial perspective. As client relationships deepen and more complex solutions are provided, your financial results also expand.

The advantage of CPA, tax and accounting firms lies in the fact that you do not have to start from the bottom of the curve. A mature client base and demonstrated expertise allows your firm to enter financial services in the more advanced stages of the wealth management curve, from both a client perspective and the profitability dimension.

Therefore, to achieve success your practice must recognize your clients’ need for specialized knowledge and areas of expertise and seek to build a foundation from which you can deliver this expertise early on.

This article and its content have been provided by 1st Global. With more than 500 firms affiliated with 1st Global, it is one of the largest wealth management services partners for the tax, accounting and legal professions. 1st Global delivers the required capabilities essential for wealth management excellence including progressive ongoing education, which places the firm in a unique position to offer wealth management knowledge.
1st Global was founded by CPAs on the belief that accounting, tax and estate planning firms are uniquely qualified to provide comprehensive wealth management services to their clients. Each affiliated firm is provided with education, technology, business-building framework and client solutions that make these firms leaders in their professions through dedicated professional client relationships built around wealth management.
1st Global Capital Corp. is a member of FINRA and SIPC and is headquartered at 8150 N. Central Expressway, Suite 500 in Dallas, Texas, (214) 265-1201. Additional information about 1st Global is available via the Internet at

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