Why Financial Planning Beats Asset Management for Client Retention: Jeff Dekko

Which of two categories of advisor — financial planner and asset manager — has higher client retention rates and greater referral rates?

In an interview with ThinkAdvisor, Jeff Dekko, CEO of Wealth Enhancement Group and winner of a 2023 ThinkAdvisor LUMINARIES award for Executive Leadership, argues that it’s financial planners who are giving consumers what they value.

“Planners craft a plan related to [the client’s] life. An asset manager doesn’t even think about crafting a plan. … They’re just thinking: ‘What should we buy today or sell tomorrow?,’” contends Dekko, who joined Wealth Enhancement as CEO in 2003.

Under his leadership, the firm has become a top acquirer of advisory practices. There have been 68 acquisitions, with assets under management ranging from $250 million to $5 billion.

Wealth Enhancement, growing 30% to 40% annually, is on track to have closed about 15 acquisitions in 2024, Dekko says. The company now manages about $70 billion in client assets, up from $600 million when Dekko took the helm.

In the interview, he specifies one of his main leadership challenges as creating “a cohesive, aligned” company built on the sort of “powerful, strong-minded” people with “strong opinions” that the firm prizes. 

“We’re not doing financial engineering exercises. The object is to create positive momentum that’s aligned for our 1,300 employees,” he stresses.

Wealth Enhancement is among the RIAs starting to leverage scale to deliver greater value to both advisors and clients. But the RIA space remains “quite fragmented,” Dekko notes. “No one player has a dominant position.”

Dekko started as a brand manager at General Mills, where, at age 21, he held a “mini-general manager role with P&L responsibilities,” he says. Later, he was vice president of marketing at Recovery Engineering. Before joining Wealth Enhancement, he consulted to the firm.

In the interview with Dekko, who was speaking by phone from Wealth Enhancement’s corporate headquarters in Plymouth, Minnesota, the CEO notes that he regularly highlights the RIA’s three-part purpose-mission statement in company meetings, as well as when acquiring a practice “long before we even sign a purchase agreement.”

Here are excerpts from our recent interview:

THINKADVISOR: Are there any recent trends that Wealth Enhancement Group has aggressively capitalized on?

JEFF DEKKO: There’s certainly a consolidation in the industry. We came into that a little late, but we’ve become one of the more aggressive acquirers out there.

We’re growing very rapidly. We’ve had 68 acquisitions since I joined the firm as CEO. We’ll [have closed] 15 acquisitions, plus or minus, this year.

When I joined, we started off with $600 million in assets; today we manage roughly $70 billion. It’s been a stair-step of many things that have come together.

What are your thoughts about scale in the RIA space?

Our hypothesis is that scale now matters. There are tools and capabilities that are accessible by organizations like us to leverage scale to deliver more value to the advisor and client.

You can get value from scale. Otherwise, scale is meaningless.

But the RIA space is still quite fragmented. We’re starting to see a few scale providers. Nobody really has that much scale. No one player has a dominant position in the RIA space.

What are some of your challenges in leading Wealth Enhancement?

I always tell my leadership team, “Let’s fail fast. Don’t hide it. Learn from it. Move on.”

Perfection is not the objective. The objective is creating momentum. We’re trying to create positive momentum that’s aligned for our roughly 1,300 employees.

What’s a big challenge?

We want strong, powerful people in our organization. Those are going to have strong opinions. So a leadership challenge every day is that you have to create alignment of strong-minded people. 

You have to say that it’s OK to acknowledge your failures. But be sure to always share with the organization how that relates to where we’re trying to go.

What are financial advisors doing correctly, and where do they need adjustment?

Successful advisors have a comprehensive approach to taking care of their clients.

There are two schools out there: planners and asset managers.

Planners that have taken a wealth management view are right-on with what consumers are looking for and what they value.