Strategy Highlights

Week 14
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Strategy 3: Work with the Right Affluent Clients

Segment your client base

You will systematically segment your existing client base to determine which of your current clients match your ideal client profile as well as those who do not match the profile and who, as a result, should be released in order to be better served by another financial advisor.

We recommend the following five steps to segment your current clients. For each step, use the client information spreadsheet that you received during the pre-work phase of The Elite Wealth Manager.
  1. Assess your current situation. Go through your client list, identifying key characteristics for each client such as name, age, date acquired, source, gross revenue received, unmanaged investable assets and assets under your management.
  2. Compare each client to your ideal client profile. Compare each ideal characteristic in your profile to the characteristics of each of your clients to determine how closely each matches your profile. Rate how well each client matches your profile on a scale of 1 (low) to 6 (high).
  3. Assess each client’s total client value. Total the ratings to arrive at a total client value score for each client.
  4. Analyze your results. Using the total client value assessment, decide whether or not each client is valuable enough to be converted to your wealth management approach.
  5. Make a decision about each client. Determine who should be converted to your wealth management process, who should be released, who is a valuable influencer in your niche, who has significant asset-capture potential and who may offer introductions to qualified prospective clients. Record your decision on each client on your spreadsheet in the “Decision” column.

Release inappropriate clients

You have already identified your ideal clients. Now you will take the steps to release the clients who are not right for you. This is the one action that will most effectively free up your time and enable you to focus on your optimal clients.

If the thought of releasing some of the clients who have helped you build your business to date is a bit unsettling, you are not alone. Nearly every financial advisor has reservations about it, but remember that it is appropriate in almost every case to release at least some clients.

Among the various options for releasing clients, consider these two:
  1. Transfer the clients to another advisor in your firm. This is a viable option—in some cases. If you own your firm and already have this financial advisor on staff, this option is not fundamentally different than hiring a new financial advisor. However, if you are an employee at a large firm, it can make sense to transfer these clients to another financial advisor within the company.
  2. Sell the inappropriate clients. This is the optimal option. By selling your nonideal clients to an outside advisor, you will have complete closure and the opportunity to turn your full attention to your ideal clients and prospective clients. If you are an independent financial advisor, it will typically be relatively easy for you to package up a portion of your client base and sell it to another independent financial advisor. If you are an employee, your firm should have the flexibility to sell a portion of your client base internally.