High-net-worth investors have always been the holy grail, so to speak, of client relationships. And a new survey by Aite Group says if you want to get wealthier clients, you should be looking across the aisle.
According to Aite, wirehouse advisors generated 10 percent of their revenue from referrals coming from internal business partners, such as a retail bank, private bank, or investment bank, in 2011. But those who generate 50 percent or more of their revenue from internal business partners have wealthier clients. These advisors said 20 percent of their business was high-net-worth, 20 percent ultra-high-net-worth, and 6 percent institutional. The figures were much lower for advisors relying less on referrals.
In addition, those advisors deriving more than half of their revenue from internal referrals had median production of $550,000, compared to $350,000 for those with less than half. Sophie Schmitt, senior analyst with Aite Group, says those advisors who know how to leverage their partners generate more revenue.