Financial advisors should focus extra attention on their 50 best clients to achieve growth and build their “ideal” practice, said Nancy Petrucelli, a coach who has worked with wirehouse advisors for the past 20 years and has the numbers down to a science. She spoke at the IMCA conference Tuesday in a workshop entitled “Growth by Design.” If you can wow these top clients with proactive, high-touch service, and are willing to ask them for referrals, you will win additional ideal clients, she said, and that is the best way to build your business.
In all, Petrucelli said 150 clients is the maximum that a financial advisor can successfully manage. She prescribes 12 monthly face-to-face contacts, four quarterly reviews and one annual review as a minimum for the top 50 clients, and four quarterly reviews and one annual review for the bottom 100. This adds up to 4 to 5 calls a day, she calculates, which should take up 180 of the 250 work days in the year. She also recommends advisors take a week of vacation each quarter to recharge, which then leaves the advisor with 160 days a year to focus on wowing their best clients.
“Service is key to retention and penetration,” she said. “It also leads to client advocacy and introductions.”
As you add new ideal clients, you should cull from the bottom of your book, she said. “The businesses that have the quantum leaps—you grow by shrinking—by shrinking households. You can do exponentially more business with fewer clients,” she said. “Trying to please everyone, you end up not pleasing your best clients.”
So review your “personality-challenged” and bottom households and plan to transition them out of your practice, she said.
Most advisors are great at reactive service, said Petrucelli. They know how to deliver when a client asks for something. But to wow your best clients you have to help them before they even know they need the help, she said. You should be able to describe your top client with the same level of detail that you would your best friend, she added.
So, who is this ideal client? He or she is nice, wealthy, trusts you and appreciates your service. You have to train these clients to describe you to their friends. Petrucelli suggests first devising a sentence you would like your clients to use to talk about you—one that is both intellectually and emotionally accurate, like “I provide clients with peace of mind.” Then tell your best clients that this is your goal, and ask them how you are doing at it.
To win referrals, ask your best clients for advice on how to help you grow your business, she said. “Asking for advice is the most powerful way to influence people,” because then they become committed to your success. Another practice that is key to growth, she said, is to ask your best clients what else they are doing as an investor to achieve their goals—and to make it clear to them that you can provide the best service if you manage all of their assets.
Having an advisor-based and fee-based approach is also critical to creating an ideal wealth management practice, whether you are at a wirehouse or an independent firm, she added. The “broker” moniker is broke, and the model now longer works. Today, advisors get paid to provide advice, not to sell products or conduct trades. “Being fee-based is Numero Uno,” she said.