Investable asset data: Fine tuning the power to serve your clients

Published 5th Mar 2021
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Businesses that know more about their customers tend to outperform their competitors. But sometimes, and for very good reasons, customers and clients like to play things close to the vest.

We’ve recently updated our Investable Asset Database to make it much easier for wealth managers (and a few other businesses) to not only know more, but to answer one of the most pressing questions they have about clients: what is their capacity to invest?

The fact of the matter is that some wealth managers don’t have a good picture of the amount of money a client could be investing, or is investing, and that has an effect on the advice they give. There are many reasons for this knowledge gap. Some investors reduce risk by entrusting money to multiple managers. Sometimes, new clients make initial investments to explore whether they have a solid working relationship with a new advisor. And sometimes, that new client that just walked in the door, driving a sensible Honda, could simply be an extremely frugal person, worth millions.

Whatever the reason, getting a solid picture of a client’s investable assets is critical to the success of a wealth advisor. It helps advisors align service levels to the potential value of a client, and it helps them estimate the share of wallet an investor has placed with an advisor.

To update our Investable Asset Database, we used the interest and dividend income from the anonymized tax returns of every U.S. household. We then reverse engineered their investible assets using average interest rates and dividend distributions. To further tweak our calculations, we relied on a wealth database from the Federal Reserve.

Our Investable Asset Database calculates investible assets down to the zip+4 level, and is the only dataset that relies on information reported by the country’s 150 million households. Two things set our database apart: It’s not survey based, and to use it, you don’t need to participate in or rely on data provided by a consortium that covers only part of the total population. Our data relies on the closest source of truth there is for a consumer’s financial position – the tax return.

To illustrate the power of our Investable Asset Database, let’s take a look at Philadelphia, Pa. Our data shows that there are over 135,000 homeowners in the Philadelphia metropolitan statistical area (MSA) that have investible assets between $1 million and $5 million, compared to the approximately 32,000 renters that have investible assets in that same range. When you look at the average investable assets for the homeowners in that range it is $1.9 million, whereas for renters it is $1.8 million. When compared to other large cities in Pennsylvania, our data shows that there are over 3.5 times as many households in Philadelphia within this investable asset range than in Pittsburgh, and roughly 35 times more than in Harrisburg.

For wealth managers, this information can be used for upsell and cross-sell opportunities, but there are other applications as well: luxury retailers can use this data for site selection. Hospitals can use it to calculate the likelihood of recovery of past-due debts, and lenders can use it to inform decisions on loan modifications.

For nearly any industry, better data means better allocation of resources. But for the financial services industry, the pool of potential customers is small. Just 16 out of every 1,000 households in the U.S. have investable assets above $20 million. The Powerlytics Investable Assets Database tells advisers where to look and just as important, where not to look. Sometimes, advisers may find them in their own client list masquerading as someone that they normally would not pay close attention to.

Want to know more about our Investable Asset Database? Contact us at