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A Surefire Way to Secure Lifetime Clients

Financial advisor turnover is a growing concern in the industry. And understandably so.

New research from Vericast shows nearly half of consumers are turning to friends or family for financial advice, while less than a third are seeking it from professionals such as a bank, credit union, or financial advisor.

The same report shows that younger generations are even turning to TikTok and YouTube for financial advice before turning to a professional.

The ‘Great Wealth Transfer’

Next is the phenomenon of “The Great Wealth Transfer.” 

The Great Wealth Transfer refers to the mass movement of wealth transferring to younger generations. According to Nasdaq, reports state that anywhere between 45 to 80 percent of heirs will likely switch financial advisors once their money is inherited. 

And the time to switch advisors managing only public equities is quick. In fact, if a client were to decide to switch advisors today, they could likely do it in about 48 hours. 

Securing clients through private equities 

One way to guarantee your clients are in it for the long-haul is to secure those with private equity agreements.

Financial advisor shaking hand with lifelong client.
Source: Unsplash

Most private equity funds come to market with 10-year terms, and up to two one-year extensions.

Even so though, the reality is that most funds exist for far longer than 10 to 12 years.

So how can advisors easily offer private investment management services?

Action for advisors 

If you’re looking to escape advisor turnover, secure higher net worth clients, and maintain generational wealth, then securing clients with private equity investments is one of the most effective ways to do it. 

While of course managing alternative investments seems like a more daunting task than managing liquid, the long-term benefits and security to retaining valuable clients is entirely worthwhile. And it doesn’t have to be difficult, either.

At AltExchange, we automate alts including private equity through our platform, built for advisors. To learn more, please book a call or schedule a demo.

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