What Client Services Do Wealth Management Firms Provide?

Jan 23rd 2012
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By Tony Batman, chairman and CEO, 1st Global

Most CPA firms start their financial advisory services with a basic model of access to financial and investment products and over time add specialization, complexity and integration to arrive at a wealth management model. The depth of the client-advisor relationship and the level of technical wealth management expertise are primary indicators of where your firm falls on the ladder of development. Typical client services in a wealth management firm include the following Method 10™ elements:

  • Tax planning
  • Investment planning
  • Retirement planning
  • Insurance
  • Income protection and asset preservation
  • Estate planning
  • Business planning
  • Education planning
  • Debt management
  • Special situations

Method 10™ elements are the 10 key wealth care issues that financial advisors systematically address with clients in order to implement comprehensive financial solutions. Not all clients need all 10 areas, but it is important to provide well-rounded service to clients and know which of these areas clients do need.

Firms evolve in their offerings

Your evolution may begin with the model most firms adopt in the early days of their financial advisory effort, the “broker/agent” service model. The most common wealth management service offered at the initial stages is investment planning. Investment planning is the cornerstone of the wealth accumulation phase of your clients’ lifecycle.

As your firm matures and clients come to expect and demand more comprehensive advice, your firm will enhance its expertise to help clients through an increasing number of relevant and vital Method 10™ issues. Once asset accumulation programs are in place to meet these clients’ goals, the natural corollary is to protect those assets both for now and for the future. Therefore, insurance planning becomes the next key service offering for your firm.

Eventually, as your clients mature, the emphasis of their wealth management planning shifts to the transfer of their wealth to others. Your firm then becomes the advisor on the full range of issues and solutions that comprise estate planning for individuals, families and business owners. And finally, to meet the shifting demands of your clients as they age, you will develop even broader and deeper Method 10™ expertise and engage clients in a wider array of Method 10™ solutions.

Clients may initiate the steps

At the beginning stages, the majority of your client engagements will emanate from the client. Typically, a firm will only take action to help a client at the request of the client. Often these requests evolve from tax planning discussions. Your firm will react to the client-presented opportunity and assist the client in clarifying the issue, crafting solutions and recommending and implementing the solution for the client directly. As confidence is gained, your firm will be more and more proactive in raising Method 10™ issues with clients.

A natural first step is to use the knowledge acquired from tax work to uncover financial issues of importance to your clients’ financial well-being. Eventually, your firm will offer a comprehensive range of services and outline a cycle of client engagements that will address every wealth management issue in your clients’ lives.

Thus, at the most basic level, your clients initiate the wealth management discussion and action. At the highest wealth management level, your professional firm has structured an ongoing series of meetings through which your clients fully expect to cover the key wealth management issues as delineated by the Method 10™.

Growth involves setting goals

To achieve the lofty goals of wealth management success ($1,000,000 revenue or $500,000 for solo practices, 20 percent annual revenue to growth, 22.5 percent EBITDA), your firm must set, measure, and control the internal dynamics of your firm’s growth initiative. The most common measures are activations, number of meetings, assets under management, and Method 10™ implementation.

By “activations,” I mean the conversion of existing clients into financial services clients. How does one officially become a “financial services client?” A financial services client is one who has implemented a solution through your firm. The potential activation rate of your practice depends on its size. Multi-partner firms (those with more than three partners) typically convert up to 33 percent of their tax clients. Smaller practices and solo practitioners have a higher potential conversion rate, closer to 50 percent. The key driver of revenues, activations, and assets under management is the number of qualified financial services meetings with clients your firm conducts. Every time your firm meets its daily/weekly/monthly goals for meetings, it’s like making a first down. Your firm is moving forward toward its goal of wealth management success.

Industry studies indicate that the average annual financial services revenue per client ranges between $2,500 and $8,0001. This variation is a product of the level of service that a firm provides. A complete wealth management firm on average commands $8,000 per year per customer. This premium is not a result of charging higher prices; rather, it is the result of broader Method 10™ services and solutions. In practice, wealth management firms that are well on their way to success have clear goals. For example, it is common for these top firms to set long-term goals to have a practice with 150 clients, $100,000,000 in assets under management, $1,000,000 in fee-based revenue, plus additional revenue from other Method 10™ solutions (retirement, estate planning, etc.). Yet, the road to wealth management differs for every financial services practice based on its clients, its opportunity and its own definition of success.

1CPAs and Wealth Management: The Critical Path to the Optimal Financial Services Firm white paper.

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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