Alternatives can help advisors stand out from their competitors

According to new research from Cerulli Associates, 81% of advisors agree that offering alternative investments helps them enhance their service offering and differentiate their practice. Advisors can set themselves apart by having a strong alternative product shelf with exposures that investors can’t access themselves — such as private markets.

Advisors also agreed that alternatives can help them attract high-net-worth clients (67%), raise assets under management (66%), and increase client retention (66%).

“My practice’s allocations to alternatives are going to increase over time. The firms that adapt to that, either by having the types of relationships to support alternatives or the intellectual capital to manage them, are the ones that are going to win.”

— Independent RIA with $300 million in assets under management

Differentiate your practice and attract HNW clients

Cerulli’s conversations with advisors suggest that sophisticated clients value having access to institutional-type, cutting-edge products and may be drawn to a practice for its ability to access high-quality private market offerings. Many advisors interviewed by Cerulli have recognized the opportunity to leverage alternative investments in a bid to position their practices to an upmarket client base.

Resources to help

• The Referral Code program is based on years of research into how top financial professionals build strategic partnerships that lead to high-net-worth referrals.
• Showtime is designed to help high-net-worth financial professionals refine their stories for prospective investors, institutions, and multi-generational families.

Consolidating client assets

Some advisors interviewed by Cerulli said that wealthy clients are leveraging other advisors for private market exposures. Advisors may be able to attract those assets and increase walletshare by offering high-quality private market exposures.

Resources to help

• Our Fi-natical Curiosity program explains how embracing the power of curiosity can help financial professionals earn more business from their clients.
• The Wealth Management Implementation Checklist provides a framework designed to help you implement more holistic wealth management.

Retaining clients

In addition to opening new client segments, advisors report that offering alternatives can serve as a retention tool as their clients’ wealth and portfolio complexity increase. Clients are more likely to stay with an advisor who has an expanded investment menu or a tier of options best suited for similar investors. Investing in private markets allows advisors to help clients with more complex needs, making assets stickier.

(See Chapter 3 of the Cerulli study for more advisor insights into the practice benefits of alternative investments.)

Resources to help

• Our Golden Hour program offers guidance on building relationships that can help you retain your best clients.
• Our Segmentation and Service resources provide a framework on how to segment your client base, stratify your client service, and systematize your model.

More resources from Invesco

Looking for more resources to help enhance your business? The Practice Innovation Index is a diagnostic platform that analyzes where your practice ranks among your peers in the areas of new business development, wealth management, client service, and practice management. And it serves up customized resources designed to help advisors improve in these areas.