How securing held-away assets helps firms — and clients

Morgan Stanley’s workplace unit and Citi each estimate at least a $5 trillion opportunity, while Bank of America’s Merrill puts it at $10 trillion.

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No, this isn’t the possible post IPO market capitalization of tech giants OpenAI, Anthropic and SpaceX. Nor is it the scale of AI investments this year. 

Rather, it’s the mountain of client assets these Wall Street giants estimate is being held at rival firms. As wealth managers increasingly count their ability to bring in new assets as the key gauge of their success, such “held away” assets are being seen as low-hanging fruit, requiring less work than securing new clients or recruiting advisors.

Existing clients are seen as a source of growth by smaller firms, as well — although the desire to bring in new investors also runs strong. A Financial Planning survey of nearly 150 advisors in May found that 56% of the respondents saw their biggest business prospects in increasing “wallet share” with existing clients. More than two-thirds, 69%, said they plan to achieve growth by increasing the number of households they work with.

Citi, Morgan Stanley and Merrill aim to capture trillions in held-away assets

Speaking in May at Citi’s investor day, Wealth Head Andy Sieg presented a slide estimating that existing Citi clients throughout the world hold $5 trillion at other institutions. Citi estimates a $3 trillion “off-us opportunity” opportunity in the U.S. for its retail bank and Citigold unit, which is for investors with at least $200,000 in assets.

Screenshot from Citi’s online presentation.

Sieg said Citi isn’t trying to make an expensive “bet on new client acquisition.”

“We have the clients,” he said. “Our challenge is to deepen the relationship by showing them what’s possible when they entrust more of their financial life to Citi.”

Other wealth managers have likewise stated big estimates for their clients’ held-away assets. Morgan Stanley CEO Ted Pick has estimated that employees whose compensation plans his firm already administers through its Morgan Stanley at Work unit have $5 trillion stowed away in other places. Pick said in a presentation at the Morgan Stanley U.S. Financials Conference in New York on Tuesday that $400 billion had come to the firm’s financial advisors from Morgan Stanley at Work and the E-Trade online brokerage since 2020.

Merrill Wealth Management President and Co-head Eric Schimpf meanwhile has estimated that there are 9.5 million Bank of America customers who don’t also have relationships with Merrill or other wealth management subsidiaries and could bring the firm as much as $10 trillion in assets.

“Obviously just capturing 1% of that opportunity would be $100 billion in client flows,” Schimpf said at a Bank of America investor day event last year. 

READ MORE: Why firms like Edward Jones and banks are rushing to ape each other 

How clients also benefit from working with one wealth manager

Firms have more than just business reasons for gaining wallet share from existing clients. Large amounts of held-away assets can also be detrimental to clients, said Scott Bishop, a partner and managing director at Presidio Wealth Partners in Houston.

“If you have five people like me managing your money and no one knows what the other people are doing, then are we replicating each other, or are we complementing?” Bishop said. “No one knows what the other people are doing. And the only way we would find out is through you.”  

As an example of how holding away assets can harm clients, Bishop pointed to the common practice of tax-loss harvesting, which involves lowering investors’ tax bills by using money lost on securities sales to offset gains. Bishop noted that tax-loss harvesting has to be carefully timed to avoid tripping on the  wash-sale rule, an IRS prohibition on claiming a tax loss from the sale of a certain security when an investor buys the same security or a similar one within a 61-day period.

“So if I sell something for a tax-loss harvest because it lost money, and someone sees that as a good buy, they may buy it and cancel out the tax loss,” Bishop said. 

Mitch Hamer, the founder and lead advisor at Intersecting Wealth in Chicago, said he doesn’t mind sharing the management of clients’ assets as long as he can be the “keeper of the balance sheet.” That means he’s allowed insight into everything other managers are doing with clients’ portfolios, even if he doesn’t necessarily control it.

He also wants any other managers in the picture to be willing to talk to him.

“They’re willing to hop on the phone with me and talk about capital gains budgets and what they’re looking to do and, for quarterly estimates, they’re sending over statements in a timely fashion and transactions and all that,” Hamer said. “If they do that, I’m thrilled. I think, ‘We have a trustworthy partner.'”

Other times, Hamer will discover another wealth manager’s strategy is basically dormant or even counterproductive to his client’s goals. That’s when he may push for more control of held-away assets.

“Not only is it a great opportunity for us to generate more revenue, but we believe that it’s going to generate a better outcome for clients,” Hamer said. “And hopefully that’s a better financial outcome.”

READ MORE: What advisors use for held-away asset management

One firm’s held-away asset is another firm’s in-house asset

Estimates are hard to come by for how big an opportunity assets held away presents for all wealth managers. That’s in part because what one firm deems a held-away asset is often an asset managed in-house by another.

One of the biggest repositories of held-away assets is 401(k)s and other retirement plans. These are often difficult to move because they are usually set up not by employees saving for retirement but through agreements between employers and firms like Fidelity Investments or Vanguard. The Investment Company Institute has estimated that Americans held $10.1 trillion in 401(k)s and another $4.1 trillion in other defined-contribution retirement plans.

Industry surveys suggest this is exactly what investors want. A January 2024 report from the consulting giant McKinsey found that the proportion of respondents to its annual surveys who want holistic advice from a single firm rose from 29% in 2018 to 47% in 2023. The survey, based on responses from roughly 7,000 affluent and high net worth clients, found the most-sought services were: legal help (cited by 19% of the respondents), tax preparation (17%) and lending and banking (10%) .

Those findings, though, are partially contradicted by other reports suggesting clients are becoming more likely, not less, to hold assets at multiple institutions. In its latest World Wealth Report, the global consulting firm Capgemini found that only 19% of the respondents to a survey of 6,510 high net worth investors reported working with a single firm last year. That was down from nearly 40% in 2019.

Meanwhile, a quarter of the high net worth respondents, defined as people with at least $1 million in investable assets, said they worked with four to six wealth managers in 2025. That was up from 12% in 2019.

Capgemini suggested in its report that many high net worth investors are still having a hard time finding everything they want in a single place.

“Whether seeking access to alternative investments, tax optimization strategies or digital asset management, HNWIs are increasingly motivated to work with multiple providers rather than consolidating with a single firm,” according to the report.

READ MORE: Understanding why clients hide held-away cash   

Are there legitimate reasons for holding assets away?

Morgan Stanley, Citi and Bank of America are among dozens of firms that have tried to counteract that tendency by adding to their offerings, doing everything from giving clients access to alternative investments like private equity and private credit to adding tax services. Clients, meanwhile, keep finding reasons to hold assets away.

Bishop of Presidio Wealth Management said he’s known clients to use their asset allocation as the setup for a competition among various wealth managers. They’ll entrust parts of their portfolios to different firms and then wait to see which one produces the best returns.

That approach, Bishop said, fails to account for how certain wealth managers can perform extremely well over a short period while losing money over the long term.

“Someone who all they bought in the last three years is Nvidia, they’ve killed it,” Bishop said. “But they’ve done it with a very big concentration and taking a lot more risk. If they do that, then you may just start saying, ‘Well, this guy won. I’m going to move all my money over there,’ because in one period, they had the right thing. But they may miss it next time.”

Other clients want to avoid putting their eggs all in one basket and hedge the risks of collapse stemming from any single institution. Bank customers, for instance, are often reminded that the  Federal Deposit Insurance Corp. (FDIC) will only guarantee up to $250,000 in individual banking accounts. Bishop said that’s less of a concern for registered investment advisors, which often rely on large firms like Charles Schwab, Fidelity and BNY for the custody of client assets.

Other times, said Hamer of Intersecting Wealth, clients may have a relationship with a wealth manager they essentially inherited from a deceased parent. Or the advisor could be a family friend or relative they feel obligated to do business with.

Again, the key for Hamer is to know what’s out there.

“There are people who say, ‘Listen, I’ve got a buddy or I know somebody from the country club that wants to do this ground-up development,’ or they’re buying a strip center, or whatever,” Hamer said. “They’re not necessarily hiding anything. But we just want to properly categorize it, know how to report on it, know when to check in on it and have an exit strategy.”