Bring Held-Away Assets into the Fold: 6 Timely Tips

By Amy McIIwain, President, Financial Social Media on Thursday, January 5th, 2012

Today, an increasing number of financial advisors are taking a holistic approach to managing their clients’ assets and becoming the trusted advisor of choice. As you know, a key element to this transformation is that advisors are now monitoring, reporting and often on advising on held-away accounts that were previously not under direct management, such as 401(k)s, 403(b)s and other accounts that are not with a primary custodian. For you, as an advisor, this raises the question:

“What do I need to know about billing on held-away assets?”   

I recently authored a whitepaper that deals directly with these questions. It’s part of our SMART Decision series at ByAllAccounts and is entitled, Bring Held-Away Assets into the Fold: The Definitive Guide to Billing for This Service. In the whitepaper, I cover the six vital issues to consider when you bill for services on held-away accounts, a quick preview of which is provided here:

1.) Custody Issue

Do you wish to have custody over your clients’ accounts? Since SEC Rule 206(4)-2 was changed, the rules on taking custody are now more stringent than ever. They even include surprise annual examinations by an independent public accounting firm that’s registered with the Public Company Accounting Oversight Board. However, it’s also true that you don’t need to have custody to manage a client’s held-away assets or to bill for the advice you give on those accounts. Using an account aggregation engine is one way to give yourself the opportunity to manage and bill, without taking custody.

2.) Fee Schedule

You have options when it comes to determining how much you’ll charge for these additional services on held-away accounts. Many firms charge at least 50 to 75 basis points. Or…you can roll your charges into a larger, all-inclusive financial planning fee.   

3.) Billing Mechanism

While you can’t bill directly to a client’s retirement account, there are a number of ways to receive your fees—from deducting from a brokerage or bank account to receiving a check. You  can also use ACH and credit card options. In every case, it’s possible to work with an account aggregation provider that integrates its technology with your billing capabilities, an excellent way to streamline the process.

4.) Client Contracts

Of course, you’ll need to obtain proper authorization from your clients to bill for managing their held-away assets. The best approach is to create a client-friendly document that lays out the intent of the agreement, and to include a series of schedules that can easily accommodate any changes that need to be made. These should include a schedule that lists each account, the level of authority you have, and where it will be billed…and a separate schedule that outlines what services you will offer and the fees involved.

5.) Communication Strategy

When you bring a new client on board, you may wish to position your reporting and advice on held-away assets as your customary way of doing business—a compelling competitive differentiator for your firm. With existing clients, you may find that it’s best to introduce the topic during routine meetings or phone calls—both good opportunities to describe the many benefits of the services involved.

6.) Implementation Plan

Before you make announcements to clients, you need to assess the anticipated change in your staff’s workload and how it will impact your day-to-day operations. In fact, it makes sense to start with just a few clients to measure the overall impact, then roll it out to the rest of your clients in a staggered fashion.


Those are the basics. I invite you to read the whitepaper for additional details on managing, advising and billing on your clients’ held-away accounts—activities that will enhance your position as a trusted advisor AND increase your revenue stream.  

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