The SEI study said it found that most financial advisors think they are pushing clients to consolidate assets, but the majority of HNW investors say they have never been asked.

There’s a wide gap between what advisors think they urge clients to do and what clients say they hear, suggesting a significant growth opportunity is being missed, a survey from SEI says. 

SEI, a US-listed provider of financial technology, operations, and asset management services within the financial services industry, has published a report, based on 518 financial advisors’ responses in late January, with an average client net worth of $2.9 million. (Research was conducted by FUSE Research Network.) The investor survey covered 302 US adults aged 50 to 70 with at least $1 million in investible assets, conducted by YouGov in April.

Ninety-five per cent of advisors said they actively try to consolidate client assets, yet 71 per cent of their HNW investors said their advisor had never asked them to manage a greater share of their wealth.

The disconnect persists despite 81 per cent of advisors saying they tell clients they offer household portfolio management, sometimes referred to as the unified managed household model, which coordinates a client's assets across accounts for tax efficiency, rebalancing and withdrawal planning. Among investors surveyed, 88 per cent said they keep some assets away from their primary advisor, and 47 per cent said that their advisor holds three-quarters or less of their total wealth.

SEI said it commissioned the study to examine barriers to household-level advice.

“The findings point to a resourcing problem as much as a communication one. Advisors offering services such as tax-loss harvesting and tax-smart withdrawals across household accounts spend an average of 48 hours a month on related tasks, rising to 65 hours for those with the largest books and 67 hours for those serving the wealthiest clients,” it said.

The survey found that 30 per cent of advisors cited a lack of technology as a barrier to scaling the service, and only 49 per cent said they could quantify the financial benefit of every household portfolio management practice they offer.

There is a missed growth opportunity from this picture, SEI said. For example, research showed that almost half (46  per cent) of investors said tax savings would motivate them to move more assets to their primary advisor, and more than a third said they would be highly likely to consolidate within a year if shown a specific dollar figure for potential tax savings.

Such surveys play into how businesses such as SEI market their wares. For example, Arthur Worthington, senior managing director of strategic business development and integration at SEI described how his firm’s Unified Managed Household (UMH) can help solve issues such as the advisor/client “gap.”

“With SEI's UMH capabilities, there is an opportunity to go beyond talking about the benefits of managing assets across the household and actually show investors how value is being delivered. More than one-third of investors said they would be highly likely to move additional assets within a year if an advisor quantified the tax savings in dollar terms, yet only about half of advisors say they can consistently quantify those benefits,” Worthington said. 

It is quite common for research reports to identify various “gaps” with the implication that wealth managers can and should close them. For example, according to a report by investmentsandwealth.org, Bridging the Wealth Management Divide, June 2024, the authors from CEG Insights said their research showed that “a profound chasm exists between the wealth management services advisors claim to provide – and indeed, often do provide – and the services clients perceive they’re getting.”

“This dangerous disconnect is a pervasive, industry-wide problem that demands attention, the paper said. (Its authors are John J Bowen, Jr, founder and chief executive officer of CEG Worldwide, a coaching firm for financial advisors, and George Walper, Jr, managing principal of strategic research at CEG Insights.)