The wealth management industry is evolving rapidly, with investors seeking more personalized and comprehensive financial solutions. Held-away assets—those not directly managed by a primary advisor—represent a significant part of many investors' portfolios. In fact, a study by CWP Private Wealth Management has found that held-away assets could represent up to 40% of an investor’s total portfolio.
These assets, often overlooked, hold tremendous potential to deepen client relationships and enhance financial outcomes. They are like missing puzzle pieces: a client’s financial picture is incomplete without them.
Why Held-Away Assets Matter
When investors hold assets, such as 401(k)s, from the purview of their financial advisor, it often leads to missed opportunities for strategic alignment and comprehensive planning. Advisors who can integrate held-away assets into their clients’ broader financial plans position themselves as comprehensive wealth stewards.
This approach fosters stronger client relationships and drives better financial outcomes by ensuring all assets work cohesively toward the client’s goals. Advisors can offer holistic advice, identify gaps in investment strategies, mitigate risks, and recommend adjustments that reflect the client’s life goals and evolving circumstances.
Consider a client with a substantial 401(k) balance managed through an employer. Without the advisor’s oversight, the account might have a suboptimal allocation or fail to align with the client’s broader financial strategy. By incorporating this held-away account into the overall plan, the advisor can recommend changes that better align with the client’s risk tolerance and retirement timeline. It is not just about numbers on a spreadsheet; it is about making a client’s dreams come true.
Expanding the Advisor’s Role
Offering holistic advice goes beyond simply managing investments; it requires advisors to act as trusted partners in all aspects of their client’s financial lives. By integrating held-away assets into their services, advisors can address previously overlooked areas such as:
- Retirement Readiness: Helping clients maximize employer-sponsored plans and ensure their retirement savings are on track.
- Tax Optimization: Identifying opportunities to minimize tax liabilities across all accounts, including held-away assets. As an example, advisors can recommend strategic Roth conversions or tax-efficient fund placement across managed and held-away accounts.
- Life Transitions: Providing strategic advice during significant events, such as job changes, inheritance, or the sale of a business. For example, an advisor can guide a client through rolling over a 401(k) after a job transition, ensuring the funds are integrated seamlessly into the broader strategy.
Advisors can also use this integration to educate clients on the importance of viewing their complete financial picture, including helping clients understand the impact of their employer-sponsored plans on long-term goals and how incremental changes today can lead to substantial benefits in the future.
A Seamless Integration: Black Diamond and Future Capital
Firms of all sizes can elevate their practices by integrating held-away assets into a broader financial strategy. By offering recommendations on contribution strategies, fund allocation, or rollover opportunities, forward-thinking advisors ensure that all investments align with the client’s long-term objectives.
By actively managing and monitoring held-away accounts, advisors can expand their managed assets, clients enjoy better returns, and the advisor-client relationship strengthens. That is why SS&C Black Diamond has partnered with Future Capital, a leader in held-away account management, to provide the tools and insights needed to integrate these assets seamlessly into comprehensive financial plans.
With this direct integration, advisors can monitor performance and suggest rebalancing to maintain optimal asset allocation across both managed and held-away accounts. Gaps in client portfolios that might otherwise go unnoticed can now be spotted. For instance, if a client’s 401(k) is heavily weighted in company stock, the advisor can propose diversification strategies to reduce risk and improve the overall portfolio balance.
This integration also enhances transparency and trust. By offering a unified view of all assets, advisors demonstrate a commitment to comprehensive financial stewardship—a key differentiator in today’s competitive market. Holistic advice empowers clients to make informed decisions, improving their overall financial well-being.
The Future of Wealth Management
Advisors looking to integrate held-away assets into their client’s financial plans should begin by initiating meaningful conversations about these accounts. Ask clients how their 401(k)s or other employer-sponsored plans fit into their broader goals and explore areas where your expertise can add value. These discussions provide insights into the client’s financial picture and position you as a trusted partner who understands the nuances of their needs.
Held away assets are too important to ignore. By aligning client conversations with actionable data and advanced technology, advisors can deliver the personalized, comprehensive service that today’s investors expect.
For more insights on how the SS&C Black Diamond Wealth Platform can help your firm thrive in this evolving landscape, request your personal demo, call 1-800-727-0605, or email info@advent.com.
