We’ve all heard the phrase “less is more” when referring to art and architecture, but could it be true for wealth management firms, too?
The short answer is yes.
Finding, hiring and training quality employees today is challenging. Retaining your best and brightest is especially tough when your competitors face the same dearth of options and are looking to poach your finest people.
Meanwhile, demand for your services has increased. Basic economics say you need to charge more when demand is up and supply is down. But there’s a tipping point where you simply don’t have the capacity to take on new clients no matter how much you charge.
If you believe the 80/20 rule — where 80% of a firm’s revenue is generated by 20% of clients — you have clients that aren’t a good fit. With all these factors at play, now is a perfect time to define your “ideal” client, grade those you currently serve and eliminate those that are no longer a fit.
Only you can determine which clients deserve an A, B, C, or D grade, but consider these universal truths:
Start by creating your “ideal client” description if you don’t have one already. What is on that list? Profitability is always near the top of your list but consider other factors too. Do they meet your minimum fee threshold? How often do they refer ideal clients to your firm? Are they responsive? Do they demonstrate the level of integrity you expect from your clients? Do you and your staff enjoy working with them and do they treat everyone on their account with respect?
Once you decide your criteria, have every professional grade their respective clients. As grades are given, have someone on your administration team compile the results on a single spreadsheet so advisers can see all results side by side. Then, as a team, discuss the findings and finalize your list of clients to cull.
Now for the fun part. With your list in hand, it’s time to remove the clients you’ve decided need to go. Identify those that need to be told on the phone or via a conference call, as well as those that can be notified via email. Be sure to identify the person on each client’s team to handle the separation to ensure it is done properly and respectfully. And don’t forget to remove them from marketing lists and portal access.
By removing the clients who aren’t the right fit, you now have time to focus on retaining the firm’s best clients, coaching your next generation of leaders and even creating new services. It will also show that you value your staff at all levels and give them an opportunity to do more engaging work, feel less stress and expand their knowledge.
Bonnie Buol Ruszczyk is the owner of bbr cos., where she serves as a marketing and DEI consultant for professional services firms.
South Carolina estate planning firm joins Osaic’s IBD network, citing succession planning tools and multigenerational growth resources.
A new SIFMA and KPMG study of more than 2,100 US investors finds satisfaction high, AI-only trust falling, and demand for human guidance growing across every generation.
Retail banks and private wealth firms scored 40 in Fitch's AI stress test, signaling possible one-notch downgrade risk under an adverse scenario.
Elsewhere, Wells Fargo Advisors adds a $400 million Morgan Stanley veteran in Naples as an ex-Cetera advisor goes independent with LPL.
According to a federal charges Bradley Heppner, 60, received more than $150 million in payments through funneling money from GWG Holdings to a shell company.
Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor