For Wealth Managers, Specialization Trumps Generalization

Wealth managers who use a consultative approach and foster close relationships control twice the level of client assets and command three times the annual income of more-traditional financial advisers, according to a study conducted by CEG Research Worldwide and sponsored by Dow Jones. The study, "Best Practices of Elite Advisers: The Wealth Management Edge," found that wealth managers control an average of $645 million in assets, while investment generalists manage $308 million on average. Moreover, wealth managers enjoy an average net income of $881,000, compared with $279,000 for generalists.

One secret to a wealth manager's success is the higher frequency of client contact, CEG reports. As a result, 65.9 percent of wealth managers feel comfortable asking for new referrals on a regular basis, compared with just 1.8 percent of investment generalists. Given that statistic, it's no surprise that 87.7 percent of wealth managers cite client referrals as a primary source of new clients, compared with 78.9 percent of investment generalists.

The survey polled 2,094 U.S.-based financial advisers that hold at least $50 million in assets under administration and have been in business for at least five years.