ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

Follow us on
 Facebook  Twitter  LinkedIn  RSS Feed

    Last 14 days

Most Popular Articles


Most Popular Commentaries

    Last 12 Months

Most Popular Articles


Most Popular Commentaries



More by the Same Author

Equities
   Value
Practice Management
   Fees
   Marketing
How to Communicate Your Account Minimum
By Dan Richards
March 26, 2013

Next page     Bookmark and Share  Email Article   Display as PDF  Remind Me Later


Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Dan Richards

Over the past decade, there’s been increasing pressure on advisors to establish a minimum account size for new clients.  The challenge is how to communicate that – should you be direct and upfront, or subtle and indirect?

A New York City-based advisor recently asked that question in this email:

Reading your article on the sentence that generated $600k in new business triggered this question. 

 I was curious to know how you would advise responding to prospects who contact our office who may not meet our minimum.  We have a mature practice and have capacity to take on fewer than a dozen new clients per year.  To this point, investable assets are the sole criteria we use to determine whether a prospect is qualified.

That said, it doesn’t seem right to tell someone over the phone something on the order of, “We have a $2 million minimum.”  It sounds snooty, and I’m not sure what is supposed to happen with the conversation after that gets said.  Note that we tend to provide the greatest value to people with more complex financial and planning situations – while that’s not 100% correlated with assets, there is certainly a connection. 

And then there are the referrals from clients.  As much as we try to train existing clients as to the people we can best serve, there are always exceptions – the nephew, the pal who may need help but doesn’t qualify.

Any light you can shed on this would be much appreciated”

Need a keynote speaker for your conference?

Dan Richards

If you’re looking for a speaker to inspire and energize advisors, consider Dan Richards.

Dan shares fresh, leading-edge perspectives on ways to attract new clients and communicate more effectively with existing ones – and helps each audience member create a personalized plan of action to grow their business and better serve their clients.

For more information about booking one of today’s top experts on client marketing for your next conference, contact info@clientinsights.ca or call 416 900-0968.

Within this email there are actually three questions:

  1. Should you have a minimum asset threshold for new clients?
  2. Should there be other factors that you look at beyond assets?
  3. How do you communicate your criteria to prospective clients?

The need for an account minimum

It’s clear that every advisor needs to set a minimum threshold for new clients.

The reason is very simple: While that threshold will vary based on individual practices, if you have a minimum standard of service level that you provide, you need a minimum threshold of revenue to justify that service.

At one time you could have a large number of clients who delivered little or no profit (or in some cases on which you lost money). That worked when larger clients provided windfall profits and in effect subsidized smaller clients. That model no longer works, as clients are more aware of lower-cost options and advisors are more aggressive in marketing to and competing for your higher-end clients. 

In a world where you can no longer rely on super-sized profits from your top clients, you need to ensure that all clients deliver sufficient income to offset the costs of serving them.

Display article as PDF for printing.

Would you like to send this article to a friend?

Remember, if you have a question or comment, send it to .
Website by the Boston Web Company