Although some clients may use multiple advisors for a variety of reasons, there are several compelling arguments for using a single advisor. In fact, it is in your best interest — and that of your clients — to persuade your clients to consolidate all their assets with you. Such strategy will not only increase your assets under administration but, more important, it will also help you provide better service to your clients.

Typically, a client may have assets with another advisor because the client believes that is a way to diversify risk, says Heather Holjevac, certified financial planner with TriDelta Financial Partners in Oakville, Ont. Or, the client may have long-standing personal, family or friendship loyalties with another advisor. Alternatively, they may maintain some assets with a bank that are tied to other products.

Such relationships, however, can often be counterproductive to your clients’ interests. Here are five arguments to use in encouraging your clients to consolidate their assets under your umbrella:

1. You can provide “holistic” advice
You get a better view of your client’s overall financial situation when all their assets are under your control, Holjevac says. This allows you to take a more complete or “holistic” approach to implementing solutions to meet their objectives — rather than various advisors working on disparate parts of a plan to achieve the same objective.

“You get the opportunity to give better advice,” Holjevac says.

2. You can offer better asset allocation
It is not practical for more than one advisor working at different firms to implement an asset-allocation model. Such a situation is bound to result in duplication of investments or concentration risk, Holjevac says.

For example, Holjevac says, while it is more tax-efficient to hold certain investments in a registered plan and others in an investment account, such an arrangement would require coordinating with other advisors, which can be difficult.

3. You can reduce portfolio risk
At one time or another, your client might have suffered heavy losses, leading to the choice to use multiple advisors as a way to diversify risk. While their decision might have some perceived merits, Holjevac says, such a strategy can result in higher rather than lower risk because asset allocation is not necessarily optimal.

“A single advisor can take better advantage of all available opportunities, such as tax-minimization strategies, to enhance returns,” she says,.

When a client has multiple advisors, each advisor has only partial information to drive decision-making.

4. You can offer streamlined reporting
When a client has various advisors, they have to contend with several reports and statements, which can be confusing. This situation can become problematic for tax filing, especially if tax slips are missing.

With a single statement, clients also get a consolidated view of all their investments in one place rather than having to review and compare statements from different advisors.

5. Lower fees
Clients usually pay lower fees when they consolidate their assets. For example, Holjevac says, the greater the assets clients have with her firm, the lower are their fee rates.

Clients can also benefit from lower fees through her firm’s family plan. “Although each family member’s account is separate, assets in all accounts are aggregated to calculate fees,” she says.