Do You Understand Your Client Roster?

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Do you understand the depth of information in your client roster and the hidden intelligence, even treasures, that live there? Have you analyzed your business in enough depth to know how to multiply its value?

In my work with financial advisors over the last several decades, I have learned the secrets hidden in their book. A detailed “book analysis” will answer the following questions:

  • Do you have the right number of clients?
  • Do you have the right quality of clients?
  • What are the areas where I need to improve my client relationships?
  • Which clients require/deserve the most retention efforts?
  • Can my clients be profitable?
  • How much time should I be spending with my clients?
  • What are better ways to approach my clients about introductions?
  • Are my clients remunerating me fairly?

Having the right number of clients

What’s most important about having the right number of clients? Recognizing that every book of business and every FA is different is different, let’s start by discussing an advisor who has an established book. As an example, this advisor’s business is currently providing financial security for her and her family, but she has bigger dreams. She has a desire to grow her client base and AUM. She may be working too many hours. She may not have time to grow her business.

Is there a way of putting a plan in place to meet her objectives? Advisors need to retain their current base of profitable clients but have time to grow their books.

In virtually every book of business, retention of existing profitable clients is the number one requirement. Why1?

  • Acquiring a new customer can cost five times more than retaining an existing customer.
  • Increasing customer retention by 5% can increase profits from 25-95%.
  • The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.