Do you find yourself constantly scrambling just to keep up with all of your clients? Does it seem as though you’re fighting (and losing the battle) to deliver the level of service you promised at the outset of client relationships? Have you lost business as a result?
Entrepreneurs who are working to build their businesses and increase their client capital often become overwhelmed when they treat everyone equally. Often, when financial advisors first start out on their own, they do not establish a structure for their clientele. This is something I discuss more deeply in The Entrepreneurial Journey. They may treat their most profitable clients the same way they do their least profitable ones, which is a waste of time and prevents them from reaching their full earning potential.
How many clients do you currently have? Now ask yourself, honestly, how many of those people you have a close working relationship with. Most likely, that number is no higher than 100. If you stretch yourself too thin by serving as an advisor to too many people, you will be doing them all a disservice.
The key is not to shed clients, but to segment them. As your business has grown, it’s likely that you identified your ideal clients and that these are not the relationships you acquired in the early days. Rather than abandon those who have remained loyal and who may eventually mature into your ideal clients, classify them on an AAA, AA or A list.
As I explained in the book, most advisors will likely find that their top 40 or so clients are supplying their firm with 150 percent of its wealth, and working with the remaining clients detracts from profits, bringing the company back to 100 percent. Determine your key relationships by establishing a set of criteria for who should be on the A list, and strictly observe those rules. Don’t let someone who should be in the A category linger on the AAA list.
Identify the potential value of each of your clients, and compare their likelihood of buying. The AAA clients will be those who offer high value and have a high chance of doing business with you. To achieve the value every client promises, take a three-pronged strategy. Focus on growing their assets, then cross-sell and consolidate.
To avoid “orphaning” the rest of your clients, bring on a junior sub-producer or consider splitting the servicing responsibilities with another advisor. By having a strong plan for working with every segment of your clientele, you will be able to ensure that every individual is adding to your revenue rather than taking away from it.
