Specialist advisors manage double average assets per advisor

By articulating a tailored service offering, advisors are likely to win business when competing with a generalist, Cerulli Associates says

October 15, 2013 11:07 IST | India Infoline News Service
New research from Cerulli Associates, a Boston-based global analytics firm, states specialist advisor practices manage nearly double the industry average assets per advisor. Specialist advisors accounted for 29% of overall advisor assets as of the end of June 2013.

"The vast majority of financial advisors are generalists," states Bing Waldert, director at Cerulli. "We estimate that only 15% of advisors tailor their business to a unique clientele, such as institutions, retirement plans, or high-net-worth investors."

The fourth quarter issue of The Cerulli Edge - Advisor Edition takes a close look at wealth managers and identifies the characteristics that distinguish a true wealth manager from other advisors.

"Although practiced by a minority, specialization helps generate gains in asset aggregation. Specificity in marketing and in personal interactions throughout the business development process yields results that differentiate from generalist practices," Waldert continues.

According to Cerulli, specialization limits an advisor's viable market, but improves success in business development. By targeting a narrow segment and clearly articulating a tailored service offering, advisors are more likely to win business when competing with a generalist.

"Asset managers can increase the value of their relationships by catering to the unique needs of specialized practices, such as providing guidance on requests for proposal to institutional advisors or providing customized product solutions," Waldert explains. "From a broker/dealer perspective, specialist practices are worthy of recruitment and development."

To further the incubation of specialist practices, Cerulli encourages broker/dealers to provide internal resources, such as business specialists who can coach teams that have the potential to evolve into a specialized practice. Teaming also enables an advisor to develop a specialty while delegating nonessential activities to other team members.

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