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    As we mentioned in a recent blog post, the financial planning industry is always evolving, but one thing that remains constant is the best method for advisors to differentiate themselves from competitors: offering trusted advice. This is especially true for advisors looking to move upmarket or retain a competitive edge among high-net-worth (HNW) clients. 

    The scope of that guidance is changing; however, and it’s no longer centered solely on investments. The lines between investing and other personal finance areas such as banking, lending, taxes, etc., are becoming increasingly blurred for advisors. Clients at all levels are looking for guidance on their overall financial wellness and professionals who once served only as investment advisors are now being asked to perform more like personal CFOs. 

    Recent research offers some powerful takeaways: 

    1. Set yourself apart–ASAP. According to leading industry research firm Cerulli, “The most successful firms in the wealth management space are those that add value beyond the realm of investment management. Providing [expanded services] can set firms apart by not only improving the client experience but also by building relationships across generations.”  
    1. Go deeper with clients with custom-tailored, holistic advice. Management consultant Deloitte has already called attention to this shift, noting, “To meet investor needs, wealth management firms and their advisors should shift to holistic, goals-based advice and measure performance based on achieving clients’ goals within agreed timeframes rather than beating market benchmarks. This is also a way to broaden the range of advice advisors provide, from investment to wealth management, and escape the commoditization of investment advice.” 
    1. The potential rewards of making such a shift are immense. According to a recent article in Wealth Management, “Becoming a holistic financial advisor can result in a number of benefits for your firm. For example, it can help you improve client retention, boost revenue by cross-selling more products and services, differentiate yourself from the competition, and offer more comprehensive, well-rounded advice to your clients.” 

    The good news is working with an outsourcing firm like AssetMark can help advisors who are seeking to expand their solution sets and capabilities deliver advice and solutions on both sides of a client’s balance sheet. Outsourcing with AssetMark can help you overcome what Deloitte described as, “significant barriers to providing holistic advice… including access to the right tools and software, training, access a wide range of products and services.” 

    Perhaps the best news of all is that it’s not that difficult. 

    Keep reading to discover how to separate yourself from competitors, boost your value proposition with clients, and start offering cost-effective liquidity to your clients so they can be prepared to manage those inevitable emergencies life seems to serve up when least expected.  

    Everybody’s doing it 

    According to financial experts, nearly 80% of Americans carry some form of consumer debt, with an average debt of approximately $38,000 (not including mortgage debt). 

    If you’re not offering lending solutions to your clients, chances are they’re meeting that need with the services of another financial institution—that is, one of your competitors. Those other institutions can then use conversations about debt to probe the client for other financial needs, such as banking and investing. Once established, a need for lending solutions can set the foundation for discussions about how transferring investment balances can lead to better terms for banking products or financing one’s debt.  

    In short, debt conversations are just another avenue for mega-competitors—including wirehouses and asset managers—to try and separate you from your best clients. 

    Prepare during the good times 

    It is a common aphorism that in good times one should prepare for bad times. This still makes sense today, as despite society’s progress, maintaining one’s equilibrium in the world is still a delicate business.  

    The proof is in the headlines—from weather disasters to the COVID-19 pandemic to armed conflict in Europe, these crises seemingly arose out of nowhere and racked up significant losses in terms of illness, death, employment, business closures, and a thousand other impacts that caused people to need temporary cash infusions.  

    Crises have other features, too. For example, the arrival of the pandemic and the Russian invasion of Ukraine were accompanied by large drops in the markets. If clients didn’t have access to lines of credit and had to sell assets to meet emergency needs, they could do so at an inopportune time. 

    Thus, offering clients access to a line of credit to access liquidity in the event of personal or large-scale emergencies not only seems prudent, but it also seems like a requirement for any advisor seeking to provide holistic financial guidance. 

    Bad terms 

    Of course, advising clients on the strategic uses of debt is not limited to emergencies. 

    As stated earlier, a large portion of Americans are making use of debt, but few are doing so in a way that makes good strategic sense. 

    If 80% of Americans have debt, how do they manage it? The answer is most of them make use of piecemeal lending. They have a car loan or lease. They have credit card debt. Perhaps they leverage a home equity line or they’re borrowing money to finance a wedding, bar or bat mitzvah, or other family events. 

    Their car lease is through an automaker’s financial arm. They have two credit cards with different companies. Their home equity line of credit is through their bank.  

    You get the picture: most Americans have debt with a number of different lenders and may have different (or not ideal) terms with each of them. This is a stark departure from the way businesses typically approach their lending. 

    Well-run businesses look at their debt needs strategically, which enables them to approach and negotiate favorable terms with commercial lenders. With experience handling financial issues, advisors recognize that a percentage point can make big differences in financial outcomes over time. Yet, few of our clients approach their household debt strategically, and few advisors think to shift from the investing (assets) mindset and provide guidance on the debt (liabilities) side of a client’s household ledger, although that is beginning to change. 

    Securities-Backed Line of Credit – An easy and cost-effective way to help your clients by making strategic use of liquidity 

    Securities-backed line of credit (SBLOC) uses a client’s non-retirement investment assets as collateral. SBLOC allows clients to set up a line of credit backed by their investment portfolio, so they have strategic access to liquidity during emergencies that may be relatively cheaper than other borrowing options.  

    The funds from an SBLOC can be used for lots of different expenses: funding a home purchase, paying tax bills, bridge financing, etc. But they cannot be used to buy additional securities. 

    Ready to learn more? 

    For complete details on how SBLOC can help you and your clients, download the Liquidity Solutions for Investors flyer. If you’re ready to meet client liquidity needs and expand your service offerings, AssetMark can help. 

    Still need more information? Contact your AssetMark Consultant or connect with us here. 


    AssetMark is a leading provider of extensive wealth management and technology solutions that help financial advisors meet the ever-changing needs of their clients and businesses.

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