Working With Clients Who Have a Small Investment Portfolio

November 3, 2020

Some financial advisors hesitate to take on a client with a relatively small amount of money to invest. But these clients can actually form a valuable segment of your business – and can even help it grow.

Smaller — and often younger — investors may become the next generation of wealth and evolve into some of your best and most loyal clients. Building long-term relationships with them now is a great way to expand your business – now and into the future. Here’s how you can support small portfolio clients while also building the foundation for a growing business.

Make Sure the Client Has Potential

Maybe more important than a client’s investable assets today is their approach to investing and saving. Are they willing to accept your advice? Are they on a life and work trajectory that suggests future growth in income and assets? Those answers will help you decide whether that client is a good long-term prospect for you.

Get to Know the Client

Small portfolio clients may not expect to see rapid growth because of the size of their investments, but they still have financial goals. Part of a financial advisor’s job is finding out what those are, so get to know the client. Understanding their motivations will help you offer the most targeted advice.

Help Motivate the Client

Once you’ve learned their goals and created an investment strategy to meet them, the work is far from done. Successful advisors don’t simply help clients set goals, they help motivate them to meet those goals. For these particular clients, education may be even more important than it is with traditional clients; they are likely to have less financial experience and knowledge. Preventing panic during inevitable downturns and market volatility, managing expectations, reinforcing smart investing behavior — it’s all part of what successful advisors do.

Update Your Technology

Because small portfolio clients tend to be younger clients, they are likely to be very comfortable with technology. According to 2019 research from Statista, the vast majority of millennials use social networks (90%) and shop online (84.8%), and they use apps more than other generations at an average of 10.5 uses per day. When it comes to investing, Logica reports 59% of millennials are likely to use computer-generated advice to guide investment decisions. You should be familiar with technology that helps you communicate more often and use your work hours more efficiently. Consider tools like visualization software, scheduling systems and programs that enable secure virtual meetings.

A small portfolio client could grow to become your largest client sometime in the future — and can be a profitable source of referrals along the way. Think of these clients as your investment in your future: build a long-term relationship and you will reap the rewards.

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