Higher-Net-Worth Households Are Key Ingredient In Advisor Business Growth

Tuesday, November 27, 2012 08:18
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Higher-Net-Worth Households Are Key Ingredient In Advisor Business Growth

Tags: Advisor businesses | practice management | prospects

A new report from PriceMetrix says households that have assets of $250,000 or greater are key to growing advisor businesses in the future.  
 
Serving households with less than that amount actually costs advisors money. Revenue from serving these households decreases $270 annually while annual revenues from larger households increase by $1650.

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The report warns advisors to transfer these households to a different service channel or expect to underperform their peers.
 
Higher net worth households also have more accounts per household. Greater numbers of accounts indicates deeper client-advisor relationships as well as higher wallet share from larger clients.
 
Fee revenue is also a better predictor of outperformance than revenue from transactions.
 
The report shows that advisors should intentionally differentiate between the various sources of revenues in their books of business.

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