Clients keep the wallet until the tax saving gets a number

Seven in ten wealthy Americans say their advisor has never asked to manage more of their money, a finding SEI Investments built a survey around — 518 advisors and 302 high-net-worth investors, the latter defined as Americans aged 50 to 70 with at least $1 million in investable assets — and the result reads as a rebuke only if the asking is presumed to be the hard part. Asking costs nothing; the arithmetic that has to accompany it is where the work sits.

Eighty-eight percent of those investors keep at least some assets away from their primary advisor, and 47% hold three-quarters or less of their total there. Put the mirror question to advisors and 81% say they tell clients they offer household-level portfolio management; both sets of answers can be true, because what clients hear is a description of a service, and what almost nobody hears is its price.

"Our research found a striking disconnect between what advisors believe they are communicating and what investors are actually hearing," said Arthur Worthington, senior managing director of strategic business development and integration at SEI, who said the gap "has real implications for firms' organic growth." Organic growth, as InvestmentNews has argued, remains the core engine of sustainable advisory firm value, but market appreciation has masked stagnant net new asset flows at many practices, which leaves growth resting on the consolidation conversation this survey says is not happening.

The client's side of that conversation turns out to be concrete: tax savings drew 46% as the leading reason to move more assets, ahead of retirement income and lower fees, and more than a third said they would be highly likely to consolidate within a year if an advisor quantified the tax reduction in specific dollar terms. Only 49% of advisors say they can attach a concrete number to the financial benefit of every household portfolio practice they offer, which leaves the trigger as a figure and the industry short on figures.

Not short on labor. Advisors delivering asset location, rebalancing, tax-loss harvesting and tax-smart withdrawals across household accounts spend 48 hours a month on the work, rising to 65 hours for the largest books of business and 67 for those serving the wealthiest clients. They named the obstacles plainly: a lack of centralized data, no single interface that shows every client account, lean staffing and, for 30%, inadequate technology.

Which is how a firm ends up doing the work and never measuring it: this publication has argued that the account nobody asked to manage is the cheapest AUM an advisory firm is likely to be offered, and SEI's data supplies the mechanism behind the silence — a practice spending 67 hours a month on tax work it cannot price has nothing to hand a client who asks what consolidating would be worth. Software that surfaces the unmanaged account without producing the dollar answer only relocates the problem, which is the trap in buying detection ahead of capacity — the same gap, found twice.

Expect the fix to arrive as a page, not a platform — household accounts, tax work already performed, the saving in dollars, a date — and watch whether the seven in ten who say they were never asked start hearing a number.