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Strategy 3:

Work With The Right Affluent Clients

Strategy 3 Contents 

1. Design Your Client Avatar

2. Design Your Ideal Client Profile

3. The Value of Working in A Niche

4. What Makes a Niche Effective 

5. 3 Questions For Identifying Your Niche

6. Researching Your Niche: Interview With Influencer

7. Researching Your Niche: Background Intelligence

8. Segment Your Existing Clients

9. Releasing Inappropriate

10. Success Factors for Effective Client Release


Working with The Right Affluent Clients Audio

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We know that the concept of focusing on just one type of client to the exclusion of all others is foreign to most financial advisors. If you are like most participants in The Elite Wealth Manager, you are entering the program without a clear sense of exactly the kind of client you want to serve, nor are you likely to have segmented your client roster to identify the specific clients who are most ideal for your practice.
In Strategy 3, you will do this and more. You will carefully consider and then document your ideal client, will systematically identify and research one or two market niches you most want to serve, and will take steps to releasing the clients who could be better served by another advisor. By the end, you will understand the dramatic impact that a single-minded focus on your optimal clients can have on your practice.



Working with The Right Affluent Clients Transcript


Tools For Strategy 3
Ideal Client Profile Form — A form for documenting each characteristic of your ideal client.
Influencer Interview Guide — A guide for conducting research on your likely niche through interviews with influencers in the niche.
Client Information Sheet — A worksheet for segmenting your client base. This was also provided to you during your program pre-work.
Client Release Letter Template — A template for a follow-up letter to clients whom you will be releasing.

Ideal Client Profile Form


Influencer Interview Guide


Client Information Sheet


Client Release Letter Template

1. Design Your Client Avatar



Design Your Client Avatar Audio

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Design Your Client Avatar Transcript

Begin envisioning your ideal client by creating an avatar.


This is simply a visual representation of your perfect client that will guide you as you build your business to attract and serve your ideal clients.

To create your avatar, answer these questions about your ideal client:

  • Is this person a man or a woman? If you prefer working with couples, you can make your avatar a couple.

  • What is this person’s first name? Yes, go ahead and name your avatar.

  • What is this person’s marital and family status? Is he or she married? Divorced? Widowed? Does your avatar have children or grandchildren? If so, how many and what ages are they?

  • Where does this person live? Be specific; envision not just which city your avatar lives in, but which neighborhood and even what his or her house looks like.

  • Is this person working or retired? If your avatar is still working, describe his or her occupation, employer, work history and work aspirations. If your avatar is retired, how does this person spend his or her time?

  • What does this person care about most? Family? Work? Hobbies? Charitable causes? Be specific.

  • What is this person most worried about? Money? Health? Family members? Again, be very specific.

  • What does this person dream about? What are his or her most important goals and aspirations?

  • What else is important to this person? By the time you arrive at this question, you will have a fairly clear picture of your perfect client. Now fill in any other detail that has come to mind as you have answered these questions.

Once you have answered these questions, you will have a vivid, detailed picture of your ideal client. This is what one well-imagined avatar would look like:

My avatar is Jane. Jane is 49 years old and is the CFO of a mid-sized pharmaceutical company based in Minneapolis. She was divorced four years ago from her former husband, Leo, an internist at a large hospital in Minneapolis. She lives in the affluent suburb of Eden Prairie in the well-appointed four bedroom house where she and Leo raised their children. With the children now out of the house, she is considering downsizing to a condo in the city close to her job.

Above all else in life, Jane loves her kids. Jimmy, age 22, is an engineering student at the state university and will be graduating later this year. Jill, age 19, just started college and is hoping to go on to medical school. Even though both children are busy with school and their own activities, all three stay in close touch. Ever since the kids were young, the family spent one week every winter in Florida, a tradition Jane has carried on since the divorce. All three love to snorkel and relax on the beach. And while both kids have always done well in school and appear headed toward good careers, Jane still worries about their prospects in an uncertain economy.

After her kids, Jane is dedicated to her job. She spends long hours at work in a high-pressure environment, but is proud of the growth she has helped her firm achieve in a very competitive industry. Her team is extremely important to her and she has spent considerable time in recent years mentoring key people who have gone on to achieve substantial success. While she earns a good salary and has accumulated a significant amount in both retirement and taxable accounts, she worries that she is not as well positioned as she could be.

Jane has always been committed to giving back to her community and currently sits on the board of directors of an organization serving homeless youth in the Minneapolis area. Through her fundraising work with the board, Jane has developed an extensive network of contacts with business leaders throughout the metro area. If money were no object, she would love to volunteer her services full time to nonprofit organizations to help them improve their fundraising and financial management.

The chances are very good that you have never before taken the time to imagine your perfect client at this level of detail. But this is not a “feel good” exercise; it’s a critical step to building a highly profitable business.

Why is this so important? Because as you take your business to higher levels, you will be faced with decisions at every turn—decisions about how to best attract prospective clients, how best to serve them and how best to keep them for the long run.

When you do not have a clear picture of your ideal client, you will hesitate at every decision, wasting time, money and effort in the process. But when you know your ideal client, inside and out, you will make much better decisions. You can simply ask yourself, “What would Jane want?”

2. Define Your Ideal Client Profile

Your client avatar has given you a very good feel for your ideal client. Now you will incorporate your avatar into a larger, more formal framework—your ideal client profile. As you will see, your ideal client profile will become a valuable tool for helping ensure that you work only with optimal clients.

The rationale for this is simple: To attract exactly the right clients and then serve them extremely well, you must identify them with laser-like accuracy. To say you want to serve affluent clients is not nearly enough; you must drastically narrow your focus to one specific type of client. Rather than being something to everyone, you will be everything to a select few.

Craft your ideal client profile by considering each of the following eight client characteristics.

1. Description (key elements from your client avatar)

Who are the ideal clients that you want to attract? If you have done the work in creating your client avatar, you have already answered this question. You have a clear understanding of your ideal client’s stage in life, marital and family status, industry and occupation, age, interests, values and goals.

2. Geographic Location

Where are your ideal clients located? Many financial advisors spread themselves too thin by pursuing too many different types of opportunities, and they make it worse by spreading their limited resources over multiple locations. Most successful financial advisors stay focused on one particular geographic location market per principal.

3. Amount of Investable Assets

How much does each ideal client have in investable assets? You want to move upmarket, but you must define exactly what that means in terms of investable assets.

The Rule of Five is a useful guideline. Take the top 20 percent of your clients and calculate the average investable assets of those clients. Multiply that figure by five. The result should be your target. For example, assume that the top 20 percent of your clients have on average $500,000 to invest. Multiply $500,000 by five. The result tells us that your ideal client will have investable assets of $2.5 million.

Bear in mind that this is only a guideline and is not applicable to everyone. Use it to start thinking about possibilities. We often find that financial advisors do not realize how easily they can move upmarket—if only they are willing to set the bar high and act systematically to attain that goal.

4. Minimum Assets under Management and Minimum Fee

What will be the minimum level of assets and minimum fee you will charge your ideal clients? Requiring a minimum amount of assets of any new client you take on will eventually enable you to serve fewer, but wealthier, clients. Fewer clients will allow you to provide a higher level of service to each one and will potentially make your practice much easier to manage. Many of the most successful financial advisors we coach set their minimum required assets at $1 million or more.

In addition to a minimum asset requirement, consider instituting a minimum fee. If we assume that your fee is 1 percent, then your minimum annual management fee for a $1 million client would be $10,000. Should you decide to accept a client with less than $1 million, he or she would still be subject to the minimum $10,000 fee. Remember, however, that the SEC requires that your fee be “reasonable in light of the services rendered.” So the account should not be so small as to make the fee unreasonable.

5. Financial Challenges

What are the key financial challenges of your ideal clients? The affluent have financial challenges, not problems, although they are certainly problems for you to solve. In defining your ideal client profile, determine the specific financial challenges your ideal clients have that you (or your strategic partners) can effectively address.

Examples of such financial challenges include asset allocation of large retirement rollovers, managing concentrated stock holdings, increasing tax efficiency of investments, generational transfer of wealth and wealth protection. To allow you to add the greatest value, the challenges will be complex, demanding a high level of proficiency.

6. Source of Acquisition

What is the optimal way to acquire your ideal clients? Would you prefer to acquire your ideal clients through client introductions? Strategic partnerships with centers of influence? Private events? Or something else?

7. High-Net-Worth Personality, Compatibility and Profitability

What is the high-net-worth personality of your ideal clients? Many financial advisors find they work better with one particular high-net-worth personality over others. Just as important, they find that they should avoid certain other personality types.

8. Passion and Commitment

Are you passionate about serving your ideal clients? Are you committed to doing what it takes to be their hero? Your answer here should be a resounding “Yes.” It’s not enough to simply like the clients you work with; you should be passionate about making a real difference in their lives. When you have this passion, many things will fall into place for you. When people recognize that you want you want to be a hero to them, the gravity shifts. Instead of pushing people to consider working with you, they will be pulled toward you. The result is not just satisfied, loyal clients, but a higher quality of life for you and your team.

Document your Ideal Client Profile

Once you’ve determined these eight characteristics of your ideal client, document your ideal client profile using the template found in the Tools section of this strategy and share it with your team. Below is a sample of a completed profile.


Moving forward, you will use your ideal client profile in three ways:

  • To help assess your existing clients. Later in this strategy we will show you how to segment your current clients to determine which ones you should work with moving forward. This will help you work not just with the right clients, but also the right number of clients.

  • To accept only ideal clients. You will begin to accept only those new clients who match your ideal client profile. (Of course, there may be exceptions with which we would agree, the primary one being a client who offers an extraordinarily large account.)

  • To shape your conversations with prospective clients. Your ideal client profile has given you a clear image of your ideal client. As you reach out to prospective clients in your various marketing efforts, this image will shape your messaging.

Over time, you may find that some elements of the profile shift as you move upmarket, as economic conditions change, as new opportunities arise or as your personal interests evolve. As they do, be sure to update your documented profile.


Define Your Ideal Client Audio

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Define Your Ideal Client Transcript

3. The Value of Working in A Niche

Imagine this: You move to a new city and are establishing a financial advisory practice. To get started, you run a newspaper ad that announces your new business and invites people to contact you. What are your result? Your parents might be proud of you, but you would get few clients, if any—and certainly no affluent ones.

In contrast, imagine that you focused your efforts on attracting and working with a single community of affluent individuals and families. By the end of a year, you would be fully established at the center of the community. You would be known as the authority who understands the unique concerns of that community. As a result, members of the community would be drawn to you and would freely offer introductions to others in the community. And you would accomplish all of this without placing a single newspaper ad.

The benefits of working in a single niche are substantial for both you and your clients.



The Value of Working in a Niche Audio

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The Value of Working in a Niche Transcript

  • It’s easier to become the expert your clients need. As we saw in Strategy 2: Implement Wealth Management, many affluent clients face a range of financial challenges beyond investments. However, it’s simply not possible to become an expert at solving all types of financial challenges, nor is it credible to claim expertise in all areas. It is entirely possible, however, to be fully proficient in executing the wealth management process and in managing a network of professionals who specialize in addressing the needs of one type of client. When you focus on one market niche, you can become the expert whom the clients in that niche are looking for.

  • It’s easier to begin conversations with qualified prospective clients. As the expert in one niche, you cannot help but become well-known. As you meet with your clients, you will make it a point to let them know that you are focused on working with people just like them. Because they will see your ability in addressing their financial concerns and will know other people facing their same challenges, they will be happy to introduce you to these people. Growing your practice by adding additional clients from your market niche will become easy.

  • It’s more cost-effective. When you focus on a single niche, your days of printing brochures and giving presentations for masses of people will be over. By narrowing your focus to a single type of client, you will no longer spend money and time attempting to reach large numbers of individuals in the hope that a few will respond to your offer. Your marketing budget can be relatively small but, because it will be so focused, very effective.

  • It’s easier to provide world-class service. By focusing on one select market of clients with similar needs, you will be able to create a single, high-quality, streamlined service model and then customize it as needed to meet the specific needs of each client. You will realize the benefits of scale while still providing the personalized service each client requires.

  • It’s easier to position yourself as the expert your clients want. When prospective clients know that you are already working with people who are just like them, with similar financial challenges, it reinforces your positioning as the authority for that community. Likewise, when prospective clients learn that you are working with clients from outside of their community, it dilutes your value promise. By serving clients from a range of backgrounds, you are not seen as a serious expert to any single community.

  • It’s more enjoyable. When you work with one type of client that you have chosen because you truly enjoy them as people, you have a substantially higher quality of life. This is not just a “feel good” benefit, but a true business benefit as well: When you work with people with whom you have a high affinity, you tend not to get burned out and are happy to remain in business for many years.

4. What Makes A Niche Effective

We define niche as any distinct market that is particularly suited to your talents, skills and interests. Each of us has unique talents and advantages in different areas.


Your goal will be to match your own skills and interests with those of your niche.

This is just the starting point, however. Not every niche that matches your skills and interests is automatically a good one.


To identify a truly great niche for you and your practice, you will look for these characteristics:



What Makes A Niche Effective


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What Makes A Niche Effective


  • Your ideal client is a member of the niche. You have already identified the most profitable and enjoyable client you want to serve. Your ideal client should therefore be a member of the niche you choose.

  • Unique financial needs that you can address. A great niche is made up of affluent individuals and families who have specific financial needs that you are well-qualified to address.

  • The opportunity to provide a superior approach. Not only must you be qualified to address the unique financial needs of members of the niche, your qualifications should exceed those of any other financial advisor who is attempting to serve that niche.

  • A size that enables you to scale your business. Great niches are tightly focused, but they are also big enough that there are plenty of potential clients for whom you can provide a consistent experience.

  • Significant growth potential. The best niches offer you abundant opportunities to grow your business to exactly the size you wish.

  • The ability to pay for your services. The niche you choose should be affluent enough to be able to afford the services you provide to address their particular needs.

  • Response to your value promise. You want a niche filled with people who are inclined to be responsive to your value promise.

  • No major competitor who is already established. You want to become the go-to financial advisor in the niche community. If a niche is already served by a financial advisor who fills this role, move on.

Often your choice of niche will result from an alignment of your skills and interests and of the community where you choose to work. For example, if you excel in stock option planning and live in an area where there are major employers who use stock options as an important part of their compensation packages, the employees of these companies may be an excellent niche for you. Or if you enjoy helping clients secure their retirement and there is a retirement community nearby with large numbers of affluent retirees, this could be your niche.

Below are just a few examples of market niches that participants in CEG Worldwide’s coaching programs have chosen to serve. In every case, these niches have proven to be highly profitable and enjoyable.

  • Executives in the oil and gas industry in the Houston area

  • The yachting community in and around Newport, Rhode Island

  • Female executives approaching retirement age in Silicon Valley

  • Radiologists practicing in south Florida

  • Women in transition—widows, divorcees and inheritors of unexpected wealth—in Asheville, North Carolina

  • Physicians in private medical practice in Boston

  • Family business owners in New York City

  • Successful retirees in southern Utah

  • Affluent individuals transitioning from work to retirement in northwestern Ohio

  • Self-employed entrepreneurs in Winnipeg, Manitoba

  • Affluent heads of households in the Phoenix area whose top priority is caring for their families’ financial security and long-term legacies

  • Airline pilots and airline executives in the Houston area

5. 3 Questions for Identifying Your Niche

Question 1. Where are the pockets of wealth in

your community?

Look around your local area to identify the concentrations of wealth. These are typically specific communities, industries, companies, demographics and trade or professional organizations. Identify at least five pockets of wealth in your community. Depending on where you live, you could identify many more.

Example: You live in Minneapolis, where many publicly traded companies are headquartered. These all represent pockets of wealth. In addition, there are pockets of wealth in the many medical and technology companies based in the Minneapolis.

Question 2. Who are the people in the pockets of wealth that you could serve well and profitably?

Now think about the people in these pockets of wealth. What types of people are there in each pocket of wealth that you could serve well and profitably? Do not be overly concerned here about a lack of specific expertise in serving these people—you can acquire that. Instead, identify the people you would be committed to serving extremely well and who would be willing to pay you for your high level of service. Identify at least three types of people within the pockets of wealth you identified in Question 2.

Example: Among the pockets of wealth in Minneapolis that you already identified—publicly traded companies, and medical and technology firms—whom could you serve? A few choices could include executives with publicly traded companies who hold significant stock options; senior executives at technology firms; or senior executives at medical firms who are nearing retirement and hold significant retirement accounts. You undoubtedly could think of additional examples.

Question 3: What makes one niche better than the others?

Among the three or so niches you have identified so far, what makes one more attractive than the others? Answer this question to land on one niche (or at most, two niches) that you believe would be right for you.

Example: Among the niches in Minneapolis you have identified so far, what draws you more toward one niche over the others? It could be geographic location (for example, its offices are near yours) or the types of people that work there (for instance, you especially enjoy working with data-driven people, such as those at technology firms) or an upcoming event that will create opportunities for you (such as a merger or an acquisition). It could be that members of the niche predominantly have a high-net-worth personality that is compatible with your own. It also could be that you already have clients in this niche, which is a significant advantage.



3 Questions for Identifying Your Niche Audio

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3 Questions for Identifying Your Niche Transcript

 6. Researching Your Niche: Interviews with Influencers

By the time you have answered the three niche identification questions, you will have greatly reduced your many potential niche opportunities to just one or two. This is a huge step, but you’re not done. Before committing to that niche, undertake some systematic research to confirm that it’s right for you. Along the way, you will also uncover the opportunities the niche has to offer.

Don’t be tempted to skip this market research. To successfully attract and serve a niche community, you must understand it extremely well. If you sidestep the research, you run the very real risk of putting your ladder against a wall and going to great effort to reach the top—only to discover that your ladder is on the wrong wall.

You will undertake research in two areas:

  • Influencers. We will provide you with a process for effectively reaching out to the “movers and shakers” in your niche in order to gain useful knowledge and establish key relationships.

  • Background intelligence. We will show you how to tap a range of resources to round out your knowledge of your niche.

Your goal in each area is three-fold:

  • To gather information that will help you confirm whether or not this niche is right for you

  • To deeply understand the key issues and challenges of the niche community so that you can effectively attract and then serve them

  • To uncover specific opportunities for prospective clients within the niche



Research Your Niche: Interviews With Influencers Audio

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Research Your Niche: Interviews With Influencers Transcript

One of the best ways to fully understand the unique needs, challenges and concerns of people in your niche—as well as to uncover opportunities in the niche—is to interview its influencers. Because these are the people around whom members of your niche naturally congregate, they are in the best possible position to provide you with insights that will help you establish yourself in the niche and provide optimal service to members of the niche.

Who are influencers?

Every niche has individuals who can help you to some degree, but true influencers all share these important characteristics:

  • They are themselves members of the niche.

  • They are the “movers and shakers” in the niche.

  • They understand the unique needs of the community.

  • They are familiar with the niche’s trade press, which you will use in your marketing.

  • They know the key people, such as attorneys or CPAs, with whom you might form strategic partnerships.

  • They know the venues where you could make group presentations.

  • They are willing to share all the above information with you.

Each interview requires a block of your time, so be selective about whom you choose. At this stage, aim to conduct five interviews with influencers. Later, once you are more established in your niche, you can conduct more interviews in order to accelerate your marketing efforts, but for now, focus on doing five interviews with influencers.

Identifying your Niche’s Influencers

There are three primary ways to locate influencers and secure interviews with them:

1. Talk to clients in your niche.

Ask any current clients in your niche about who the most influential people in their community are. In particular, ask about the individuals whom the clients know personally and whom they would be willing to introduce you to.

2. Tap into niche associations.

Contact the executive director of the local, regional or national association or other organization of your niche. For example, if your chosen niche is made up of senior executives working in high-tech in Silicon Valley, for example, you would contact the head of the San Jose chapter of the American Electronics Association, a nationwide trade association that represents the technology industry.

The association that serves your niche will not always be so obvious, but with a little research you should be able to identify the right organization. Think about where members of your community congregate and communicate with one another. For instance, assume that your niche is made up of owners of successful privately held small companies. Some inquiries will tell you that many of these small business owners are members of CEO groups. These groups are their gathering spots, which makes their group leaders your best sources of information.

Another excellent resource for determining the right association is the Encyclopedia of Associations, usually available from your local library. It’s a guide to more than 24,000 national, regional, state and local associations, including professional societies, trade associations, labor unions, cultural and government organizations, and other groups of all kinds.

Once you have identified the appropriate person in a niche association, your conversation might go as follows:

“Hello, my name is _______. I’m a financial advisor working with __________ here in _________. I would like to gain a better understanding of the unique financial needs and challenges of these people.

“I need your help. I am currently conducting research on how these people should best manage their financial affairs in today’s environment. To do this, I would like to interview 10 leading _________ in the area. Can you provide me with the contact information for people you think would be willing to speak with me?”

3. Leverage social media.

Use LinkedIn to contact connections who are members of the niche you are considering. Send each a message such as the one below:

Hello, Tom.

As you know, I’m a financial advisor working with _________ here in ___________. I would like to gain a better understanding of the unique financial needs and challenges of these people. Since you yourself are a member of this community, I thought I’d reach out to you.

I need your help. I am currently conducting research on how people in your situation should best manage their financial affairs in today’s environment. To so this, I would like to interview five leading ______ in the area. Could you let me know who the individuals in this community are who are most influential in this area? I would be particularly interested in anyone whom you know personally and would be willing to speak with me.

Using your thought leadership content in interview with influencers

Once you have identified influencers you would like to interview, review the thought leadership content available to you through CEG Advantage to locate any content that would be of interest to particular influencers. This will include both VFO Special Reports, Flash Reports and the books designed for accountants and lawyers. Bring in the appropriate content to your meeting to share with the influencer. If you uncover any other topics of specific interest to the influencer during your interview, you can send additional content in an email following the interview.

Steps for effective interviews with influencers

Once you have identified five influencers, conduct this 10-step interview process.

Step 1. Call to set up the appointment.

Call the influencer, introduce yourself and then proceed with the conversation along these lines:

“Hello, Bill. Ted Executive of _________ recommended that I contact you. Ted spoke very highly of you and said that you are an expert in the unique needs of members of your community.

“I’m a financial advisor in this area, and I’m in the process of conducting research to determine how I can add the most value for people in your community, given the challenges in today’s marketplace. Ted thought you might be willing to share your insights and opinions with me.

“We’ll need to spend about one hour together to do this. I’d like to invite you to breakfast (or lunch) next week. How would next Wednesday work for you?”

Step 2. Open the Interview.

Take the first few minutes of your meeting to describe what you would like to accomplish and how it will benefit members of the niche and the influencer. Do so in this way:

“Bill, I really appreciate the opportunity to get together with you and your willingness to share your time with me. I think it’s going to be very valuable for the members of your community as we uncover how best to address the financial challenges they face today.”

You may occasionally find that the person is uncomfortable with the purpose of the meeting. Address this by reassuring them that you are there not to sell anything but to find out how you can better serve their community:

“I’m only interested in doing research. I have no intention of selling anything to anyone.”

Step 3. Introduce your Questions.

Now provide the framing for the interview and let the influencer know that you would like to record the conversation. (Be sure to check with your compliance group on the permissibility of recording your interviews and any retention requirements.)

“As I mentioned on the phone, Bill, I’d like to ask you a series of about 20 questions to get an understanding of how I can better serve your community. To make sure that I capture everything, I’m going to record our conversation so that I don’t miss anything you say.”

If the influencer has any concerns about recording your conversation, respond in this way:

“I would like to record our meeting to ensure that I capture everything and am able to focus on your responses. Then I’ll have the recording transcribed and will read it back again to make sure I didn’t miss anything. This recording will be confidential and only for my internal use.”

Step 4. Conduct the Interview.

Since you are judged by the quality of your questions, it is critical to have thoughtful, open-ended questions prepared in advance. Each question should be designed to reveal specific aspects of the niche that will be useful to you in attracting and serving members of the niche. Our influencer interview guide is available for download from the Tools section of this strategy.

Step 5. Close the interview and gain an ongoing commitment.

To close the interview, simply say this:

“Bill, I really very much appreciate the great insights you shared with me today. I know your thoughts and ideas will have a large impact on addressing the financial challenges facing _______ today.”

If the influencer has provided excellent information and insight and is qualified to be a client, ask if he or she will act as an ongoing resource whom you can contact as needed. Enlist the ongoing support of the influencer in this way:

“Bill, I would like to contact you occasionally for your ideas and opinions. I would appreciate it if you acted as a member of my informal advisory council. Essentially, this would mean that I would reach out to you two or three times over the course of a year to use you as a sounding board so that I can better serve the community. Would that be okay with you?”

Step 6. Follow up with a thank-you note.

Because the influencer has given you the benefit of his or her time and unique knowledge of your niche market, you should express your thanks in a thank-you letter (preferably handwritten) that is mailed the same day as your meeting.

Below is a sample of such a thank-you note.

"Dear Bill,

I very much appreciate you investing your valuable time in helping me to improve my service to members of your community. Ted said that you would be very knowledgeable and he was certainly right. I appreciate your opinions and in particular found your insights on _______ very valuable. The information you shared will be most important to our business, and I believe it will be incredibly useful in helping me to help the community.

As you suggested, I’ll also follow up with ________, and I’ll drop you a line to let you know what I find out from that conversation.

I also deeply appreciate your willingness to be part of my informal advisory council, and I look forward to our next conversation.


 7. Researching Your Niche: Background Intelligence

Secondary research is a very easy way to pick up additional background on your niche that did not turn up in your influencer interviews. In addition, it will keep you current on the happenings and trends in your niche long after your primary research is complete.

These are the best ways to conduct secondary research on your niche:

  • Google your niche. Many of us use Google every day without giving it a lot of thought. Do not overlook its value in finding out more about your niche. Learn how to refine your searches and make them more efficient using Google’s tips and tricks.

  • Look at social media for your niche. Social media outlets can be the source of a surprising amount of information about any particular niche.

  • Review your competitors’ web sites. Visit the websites of financial advisors who market to your niche. Take note of their positioning: What is their compelling value proposition? What do they offer that you do not? What can you glean about the financial challenges of niche members?

  • Subscribe to the newsletters of the niche’s associations. Virtually every association publishes a print or email newsletter. Perusing these on a regular basis will keep you current on trends in the niche as well as the association’s activities, including upcoming events that you should attend.

  • Examine trade publications. If your niche is based in an industry, subscribe to its trade publications. See Wikipedia’s directory of professional and trade magazines for links to hundreds of publications.

  • Network at niche events. Depending on your niche, conventions, conferences and even social events are all opportunities for you to interact with members of the niche community to make new contacts and gain additional perspective on the niche.

  • Obtain published research. In almost every niche, one or more consulting firms make primary research reports available for relatively nominal expense. Often these providers can be identified by searching “[Your niche] research reports.”

Stake Your Claim to Your Niche

You now have your ideal client profile in place and have undertaken research to help confirm that you have identified the right niche. Your research has also likely turned up multiple opportunities that you can pursue right now.

It’s time to stake your claim on your niche. Commit to making it your own and becoming the financial advisor among all the others who is the best qualified and best positioned to serve the niche. Put a flag in the ground—this niche is yours.

Some financial advisors second-guess themselves about whether they have made the correct decision and, as a result, fail to fully immerse themselves in their niche. Remember that marketing should be “Ready, Fire, Aim.” The market will quickly tell you whether you have made the right choice. When you get it right, everyone in that niche will want to work with you. If you get it wrong, you can move your flag to another niche.



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Research Your Niche: Background Intelligence Transcript

8. Segment Your Existing Clients

Moving to a substantially higher level of success with fewer clients requires you to have highly profitable clients—and only profitable clients. You simply do not have room for extra clients who are not right for your practice. This makes segmenting your existing client base a critical building block for your future success.

Earlier in this strategy, you identified the type of client you most want to work with. Now you will systematically segment your current client base to determine which of your current clients match your ideal client profile. You will also identify those clients 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.

Step 1. Assess your current situation.

Go through your client list, identifying each of the following. (You will have done this as part of your pre-work for The Elite Wealth Manager.)

  • Client’s name

  • Client’s age

  • Date acquired

  • Source of client (for example, as the result of an introduction by a client, a private event or a strategic partnership)

  • Gross revenue received last fiscal year from the client

  • Client’s total investable assets as of the end of the last fiscal year that were not managed by you, such as 401(k) assets, cash held in a bank or assets managed by other financial advisors

  • Client’s total assets under management as of the end of the last fiscal year (these are the assets that are managed by you)

Step 2. Compare each client to your ideal client profile.

Now assess how each client matches your ideal client profile:

  1. Compare each ideal client characteristic in your profile to the characteristics of each of your clients to determine how closely each client matches your profile. Most of these characteristics can be assessed simply by indicating “yes” or “no.”

  2. Rate how well each client matches your profile on a scale of 1 (low) to 6 (high). You will transfer this rating to the total client value assessment below.

Step 3. Assess each client’s total client value.

Rate each client on client segmentation form you received during your pre-work (also available from the Tools section of this strategy). Rate each factor on a scale from a low of 1 to, for most, a high of 3; for some factors, the high rating may go up to 4, 5 or 6. Total the ratings to arrive at a total client value score for each client.



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Segment Your Existing Clients Audio

Step 4. Analyze your results.

Using your assessment, decide whether or not each client is valuable enough to be converted to your wealth management approach. Some financial advisors establish a minimum total client value score, below which they will not accept an existing client. Others just consider all the data together and make a decision on each client.

Generally speaking, while clients with a score of 35 to 40 are considered to be ideal, many financial advisors continue working with all clients who score 30 or higher. Clients scoring in the 20 to 29 range may be kept or not, depending on their individual circumstances. Clients with ratings of 19 or lower generally should be released.

Step 5. Make decisions about each client.

Finally, make a decision about each client on each of the following issues:

  • Should I convert this client to my wealth management process? (Or have I already converted this client?)

  • Should I release this client?

  • Is this client potentially a valuable influencer in my niche?

  • Does this client have significant asset-capture potential?

  • Does this client have the potential to introduce me to affluent individuals qualified for my service?

Two cautions

  1. These calculations are no substitute for your considered judgment. They do, however, provide an objective framework to help you decide. One common exception to the segmentation is an existing client who may not meet all the criteria but has assets well in excess of your minimum and is extremely enjoyable to work with.

  2. You may need to adjust your ideal client profile to match your revenue goals. For example, if you want to make $1 million in gross revenue and wish to work with only 100 clients, each client must provide $10,000 per year of recurring revenue on average. This means that your ideal client would need to have $1 million in assets with you (assuming a 1 percent management fee). In our experience, most financial advisors decide that they need approximately 100 ideal clients to achieve the level of success they desire.

Once you have segmented your client base and identified your ideal clients, you are ready to begin building your entire practice around serving them well while attracting additional clients just like them. This is only the first step in a series that will move you to a significantly higher level.

9. Releasing Inappropriate Clients

It is commonly assumed in our industry that bigger is better: The more clients that financial advisors serve, the more likely advisors are to earn higher incomes. Many take it for granted that a financial advisor with 500 clients is more successful than one with 100 clients.

However, this assumption is not always correct. In fact, we’ve seen that the most successful financial advisors tend to have among the fewest clients of all advisors.

So we discourage you from seeking more clients just for the sake of having more clients. You need both the right clients and the right number of clients. You have already identified your ideal clients. Now you will take the steps to release the clients who are less than ideal. By doing so, you will enjoy important advantages:

  • You will free up substantial time to better focus on your serving existing ideal clients and building your business to attract additional ideal clients.

  • It will improve your quality of life. When you work with only top clients for whom you can add substantial value, you will feel energized and inspired.

  • Focusing your practice on select clients sends a strong message to these clients that you are devoted to serving people just like them.

  • Much more often than not, having fewer yet more profitable clients will mean a higher net income for you.



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Releasing Inappropriate Clients Transcript

You have already segmented your client base to determine the specific clients that should be released. Now place this in the larger context of what you want to achieve in your practice. For instance, if your goal is to earn $2 million in revenue while serving 100 households at a 1 percent fee, each household would need to have an average of $2 million in assets with you. You will not be able to achieve your goal immediately, but keep it in mind as you move deliberately in releasing select 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.

The most obvious barrier to releasing existing clients immediately is the loss of revenue. But you have something more valuable than short-term revenue at stake: your human capital. To maximize the value of your human capital, you must focus on your highest and best use. Working with inappropriate clients is, by definition, an inappropriate use of your time.

There are four options for discontinuing work with particular clients: two that we heartily discourage you from using, one that may be appropriate for you and one that we wholeheartedly recommend.

Option 1. “Quiet file” the Inappropriate Clients

In this option, financial advisors create a “quiet file” of clients with whom they no longer want to work. They stop proactive work with these clients in the hope that the clients will no longer contact them—but that their recurring revenue trail will continue.

Of course, this option rarely works as financial advisors hope. Instead of simply going away, these clients continue to demand time and energy disproportionate to the business they offer. They are often the most difficult clients (particularly for your team) in addition to being poor sources of introductions to qualified prospects.

While this is a common option that has been used by nearly all financial advisors at one time or another, you should not consider it. When you quiet file clients, you let them down. Not only do you stop serving them, you fail to release them in order to be served by another advisor. Quiet filing is the antithesis of the deliberate action that will create new success.

Option 2. Hire another financial advisor to serve the inappropriate clients

This is another route commonly taken by financial advisors but like the first option, it ducks the fundamental issue. Hiring a junior advisor that you must train and supervise costs time and money and will not turn inappropriate clients into profitable, ideal clients. Again, this is not the kind of deliberate action that will enable you to focus on the right clients.

Option 3. 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. Actually, you should consider transferring both the inappropriate clients and the financial advisor if they are not profitable enough to warrant your time.

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. Compensation for this transfer is sometimes accomplished using a revenue-sharing code with another financial advisor. The most typical deal we see is where the financial advisor making the transfer receives half of the compensation for four years.

Be aware that if you do a revenue-sharing code arrangement, you remain the named financial advisor for the client, so compliance risk may remain yours even though you are no longer directly servicing the client. Recognize this risk—as well as your responsibility to make sure your client is well served—and be sure that you are transferring to a well-qualified financial advisor. Many financial advisors, upon assessing the risk, elect not to use this option. Check with your compliance professionals to understand the exposure you will have if you do go with this option.

If you choose this option, the optimal time to transfer inappropriate clients is at a Regular Progress Meeting, which you will learn how to conduct in Strategy 5: Nail the Wealthy Client Experience. Assuming that you are transferring clients to a senior financial advisor in your firm, we recommend a script such as the one below.

“Bill, as you know, my favorite part of my business is working with clients just like you. However, because of the substantial growth in my business, we have had to undertake many efforts to ensure that we provide the highest possible quality of service to each and every client.

“To provide this level of service, I will be asking Susan to join us in a few minutes. Susan is one of our senior financial advisors and will be able to devote the proper amount of time and resources necessary to achieve your financial goals. Bill, you deserve nothing less.

“Because of the growth in the firm, I can continue only with clients who have over $1 million in assets managed by our firm. However, I will continue to chair the investment committee that is responsible for the management of every client's portfolio at our firm.

“With Susan, you will get the full attention you deserve and will also get the same high-quality investment process that you and I have worked on together. If there are any problems whatsoever about working with Susan, please don't hesitate to call me. We want all our clients be successful. Would it be okay to bring Susan in at this time?”

In many years of experience with this option, we never lost a single client. As a matter of fact, many clients commented on the improved level of service they received.

Option 4. Sell the inappropriate clients

This is the optimal option. By selling all your non-ideal 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. As an independent, you can take advantage of a firm such as FP Transitions to help you with this transaction.

If you are an employee, your firm should have the flexibility to sell a portion of your client base internally. You would effectively be selling a portion of your book of business and should receive either an ongoing revenue share or possibly up-front money. Check with your firm about how best to structure such a sale.

Bear in mind that you will need to conduct due diligence on the new financial advisor—you owe it to the clients you are releasing. You want the financial advisor to be equipped to continue to grow that part of his or her business, as your deal will likely involve either an ongoing revenue share or an earn out. In addition, if you will receive revenue for the sale, you will have ongoing exposure. Work with your compliance professionals to ensure that the sale is in the best interest of the clients.

If you choose to sell a portion of your clients, consider using the following script in your initial discussions with the clients you would like to sell.

“Lily, as you know, providing a very high level of quality service to every one of my clients is extremely important to me. In fact, it's the most enjoyable thing I do.

“As I'm sure you've noticed, our business has grown quite a lot in recent years, both in terms of the number of clients we have and the number of staff. As we've grown, we've taken steps to ensure that every single client continues to receive that high level of service.

“We're excited about our newest effort to provide this kind of service, which is a strategic alliance with Outside Advisory Firm X. As part of this alliance, Outside Advisory Firm X will be responsible for some of our clients.

“I've chosen Outside Advisory Firm X very carefully. It is an excellent firm with a terrific reputation and will be able to devote the proper amount of time and resources necessary for these clients to achieve their financial goals. With your permission, Lily, we'd like you to be a part of that move. We believe that you deserve nothing less.

“The most important thing is that you will continue to receive excellent service. You may find that because the new firm is focused specifically on clients with situations and challenges similar to your own, you will be even happier with the new firm.

“It's also important to know that Outside Advisory Firm X will continue to manage your investments according to your current plan, unless you approve any changes.”

If the client’s account is especially large, you will want to have the principal buyer available to meet with him or her at this time. Introduce the client to the buyer as you would if you were transferring the client to another financial advisor in your office:

“The name of the senior financial advisor at Outside Advisory Firm X is Jim Financial Advisor. With Jim, you will get the full attention you deserve and will also get the same high-quality investment process that you and I have worked on together. If there are any problems whatsoever about working with Jim, please don't hesitate to call me. We want all our clients to be successful. Would it be okay to bring Jim in to meet you?”

Assuming that you receive a positive response, follow up on this conversation by sending the client a letter that outlines the next steps. A sample is shown below.

Dear Lily,

I wanted to follow up on the conversation we had today about our new strategic alliance with Outside Advisory Firm X and the advantages of moving your account to the new firm.

As we discussed, the primary reason for this move is for you to continue to receive the high-quality service that you so deserve. Outside Advisory Firm X is ideally positioned to provide exactly this service, and I wholeheartedly believe that you will be quite happy there.

The next step we need to take is to have your written consent to move your account to Outside Advisory Firm X. I have included with this letter the appropriate paperwork for your signature, as well as a postage-paid envelope. I encourage you to sign and return the paperwork at your earliest convenience in order to avoid any interruption in the management of your account.

I understand that you may have questions about this, and I encourage you to call me at any time so that I may answer them.

Financial Advisor to the Affluent

Using this release methodology, we have historically seen a 98 percent client approval on the sale to the new firm. The remaining 2 percent are typically just impossible to reach but ultimately do move at some later date.

10. Success Factors for Effective Client Release

Should you choose to either transfer or sell your inappropriate clients, the following measures will help you do so effectively.

Have your wealth management process in place before releasing clients

You need to have your wealth management process fully in place and running well before you begin releasing inappropriate clients. For most financial advisors, the best timing for beginning the release process is about 90 days after you have established the rediscovery process that we will discuss in Strategy 5: Nail the Wealthy Client Experience. By that time, you will have built sufficient confidence in your new wealth management process that you will feel comfortable in releasing a portion of your clients. If you have any doubts about the best timing for releasing clients, work with your CEG Worldwide coach to identify the optimal time frame.

Identify the right providers before releasing clients

Do not begin releasing until you have identified other advisors or firms that are eager to take on your clients and that will take excellent care of them.


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Success Factors for Effective Client Release Transcript


Release clients in tranches

In most cases, it will not be to your advantage to release all inappropriate clients at once, as doing so would cause an abrupt and possibly significant drop in revenue.

Instead, consider releasing clients in tranches according to their assets. For example, you might begin by breaking out the bottom 20 percent of your clients and packaging them for sale to a firm that specializes in serving clients at that asset level. Once you have replaced that revenue with the addition of ideal clients, move up to the next 20 percent and a provider appropriate for serving that asset level. Continue until you have reached your goals for revenue and number of ideal clients.

Establish close client contact

While you should meet with clients with larger accounts in person to explain the sale or transfer, you can use phone meetings for clients whose account sizes do not warrant individual meetings. It’s best if you make these calls yourself, unless it is such a large number that time does not allow you to do so. In this case, have a member of your team help with the calls. Dedicate one day to phoning these clients to help ensure that you reach each one.

Follow up the telephone calls with a letter. It is essential that the phone call precede the letter. Along with the letter, you will also mail a change of broker of record and/or a new financial advisor agreement—whichever is required to change the registration and to allow the buyer to receive the fees and/or commissions.

Call all clients two weeks after mailing the letters to verify that they received them, to answer any questions and to ask when you can expect to receive the consent forms. If needed, send additional copies electronically.

Consider arranging a conference call with the principal financial advisor to whom you are selling or transferring the clients. This will be your opportunity to introduce the new financial advisor, who can then address any questions or concerns the clients may still have about the arrangement.

Keep all parties interested

Regardless of whether you’re an independent financial advisor or an employee, it’s important to make sure that there will be an earn out provision based on the degree of success in transferring or selling the revenue opportunities. It is in both parties’ interest to facilitate a smooth transaction.

Get compliance assistance

It’s critical to get compliance assistance when undertaking any transfer or sale. Seek help either from the compliance office of your broker-dealer or, if you are an RIA only, from your own legal counsel. Pay special attention to your company’s privacy policy to confirm that all provisions are followed properly.

Maintain great client service

Finally, bear in mind that if clients have received poor service in the past, some will use either a transfer or a sale as an opportunity to explore relationships with other financial advisors. Minimize the possibility of this by continuing to provide all clients with excellent service up until the time that you release them, and then to make the sale or transfer as convenient as possible for them.

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