How to Scale an Exceptional Client Experience

Dec 1, 2018 @ 12:01 am

You run an efficient and profitable advisory practice, with happy, satisfied clients who refer you to their colleagues, friends, and family. But do you also have bandwidth issues resulting from too many clients, which are now affecting the quality of the interactions clients have with you? How can you ensure that you spend the right amount of time with the right clients, so you can scale an exceptional client experience? It starts with an analysis of your book and then moves on to segmenting your clients and services.

Where Is Your Revenue Coming From?

All financial advisors should know which clients generate the most revenue for the firm. Generally, 80 percent of a firm's revenue is concentrated within about 20 percent of client households. This 80/20 rule of thumb is fundamental to understanding growth and profitability metrics. An optimized client service model focuses on ideal clients, and replicating those clients helps contribute to smart growth. So, who are they?

Who Are Your Ideal Clients?

Focusing on developing relationships and retaining clients who fit a particular niche allows you to optimize operations and marketing. There are many processes and materials that can be scaled when you choose to work with a select group of clients. And that, in turn, allows you to spend more time doing what you do best—giving advice.

On the other hand, the differences among your ideal clients present opportunities to provide unique, thoughtful experiences. These experiences may be based on the details you know from your relationship beyond the numbers. There are many industry data points about how frequently you should meet with your clients, for example, but the best information comes from client feedback. Each client's comfort level will be different, and the clients who require fewer meetings can help increase your capacity.

Truly, an ideal client is relative to the advisor's book of business. Do your analysis based on client households to calculate assets and revenue distribution. Then define segments using a scorecard that includes both quantitative and qualitative measures. Below are a few ideas to consider:

Quantitative Qualitative
  • How much revenue do they generate for you?
  • How much do they have to invest?
  • What is their average age?
  • How strong is your client relationship?
  • Do they provide quality referrals?
  • Do they trust the advice you give?
  • Are they coachable?

Both the revenue and the relationship are important when segmenting clients into A, B, C, and D categories. Typically, A-client households are in the top 15 percent of revenue and relationship scores. That means A clients are relative outliers on the top half, and D clients are outliers on the bottom half. Advisors can scale services for these clients. Most clients, though, are Bs and Cs. Since client service models are typically designed for A clients, a common pitfall is for advisory firms to spend too much time with these clients, leaving the largest segment of B and C clients underserved.

This presents a paradox for advisors trying to find the sweet spot between repeatable processes and unique offerings. Luckily, there is an even playing field in the industry. Everyone has the same capacity of roughly 2,080 working hours in the year. How can you make the most of that time? Start by making some tough decisions and letting go of clients who aren't the right fit.

Are Your Services and Profitability in Balance?

Working with the right clients is essential to balancing service and profitability. If a prospect is not a good fit for your service model, the next step is simple: explain that you aren't the right advisor for him or her, and perhaps suggest someone else who might be. But if some of your existing clients don't fit your service model, what's the best way to let them go without leaving them stranded?

  1. Meet with clients in person. Let them know that you have narrowed the focus of your business and that, consequently, you need to part ways.
  2. Identify other advisors in your community who may be willing to take them on. Direct fee-based clients to the FPA website for information about other CFP® professionals in the area.

Now What? Targeting the “11-Star Experience”

Once you've parted ways with the clients who don't fit your firm's service model, it's time to focus on scaling an exceptional client experience for those who remain. Since the value is in the advice, it would make sense that an advisor should focus first on delivering quality, individualized financial guidance. The next best thing is to work toward developing new client relationships. When clients consistently receive world-class service, you are more likely to see an increase in word-of-mouth referral opportunities. But what's the key to providing this kind of experience?

The answer lies in a strong knowledge of your clients and a little creativity. On a recent Masters of Scale podcast, Brian Chesky explained how Airbnb formed its 11-star experience. The company brainstormed ideas that were not necessarily feasible but that its customers would love. Then, the best parts of those outlandish ideas were simplified into repeatable processes.

Think about what a 5-star experience looks like for your clients. Then, imagine 6-, 7-, 8-, 9-, and 10-star experiences. Once you've done that, think of pure nirvana—an 11-star experience so amazing that it's illogical or logistically impossible. Finally, use the achievable concepts from these ideas to enhance the client experience. Here are a few ideas to consider:

  1. Maybe it's not in the budget to order a limo to pick up clients before every meeting, but how about sending a car to transport them on a rainy day?
  2. You could host a wintertime luau event at a local hotel with an indoor pool, complete with leis and summery drinks. Or even set up a fresh-fruit smoothie bar in your office's waiting room!
  3. Ask your existing clients for their favorite recipes and compile them into a book to give new clients as a welcome gift.

Commit to Quality

As a service provider in the business of helping individuals and families realize their goals and aspirations, turning people away can be among the most difficult decisions you have to make. Ultimately, however, you have a duty to ensure that you are providing the best service possible to the clients who work with you. Segmenting your services and trimming your book can allow you to provide a more scalable and exceptional client experience, which will help you continue to identify and retain ideal clients for years to come.

Who's your ideal client? Download our free worksheet to identify the type of client who can contribute most to your business's growth.

This post originally appeared on Commonwealth Independent Advisor, a blog authored by subject-matter experts at Commonwealth Financial Network®, the nation's largest privately held RIA–independent broker/dealer. To subscribe, please visit originally appeared on Commonwealth Independent Advisor, a blog authored by subject-matter experts at Commonwealth Financial Network®, the nation's largest privately held RIA–independent broker/dealer. To subscribe, please visit


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