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How to get more of the right clients – and more income


“If you have never turned away a potential client, you don’t have a client proposition.”

An easy, glib thing to say. And there has been a period since the beginning of 2013 when we have tried not to have the “proposition” conversations, which, pre-RDR, caused a certain amount of overkill for some.

But slowly the wheel has turned and many IFA firms now seem ready to build a bit more scale on top of the rather solid foundations they have carefully and expensively created. In short, they need some more clients, and some more income. 

But this time it is different. This time they see clearly – well, many firms do – that more of the wrong clients may well look and feel good in the short term but will actually not help them in the long term.

And they are right.

There are three sets of learning experiences going on here. 

The first is that the historic model for many firms was to make money upfront and then lose money on that client forever unless they sold them something again, at which point the roundabout starts again. Essentially, a consultancy model. This is fine, but you really need a great marketing machine to bring in the new work. Most small firms do not have this.

The second learning experience is that in the past few years there has been a move away from the hamster wheel model to a service-based model. In “widget” terms, this means what the firm produces is an ongoing relationship. In fact, in most cases over 80 per cent of the income of these firms is attached to an active ongoing relationship.

And the last one is firms are learning to trust only the income they themselves control as everything else is subject to someone else chopping and changing the rules, be it the FCA, product providers or HM Revenue & Customs.

That means advisers must put themselves in a position whereby, in the words of the late, great David Norton, “clients will cheerfully pay their fees”. Note the brilliant use of the word cheerfully. Only when this is true do you really control your income and destiny.

So when I ask firms, “What type of clients do you want?”, the answer I require should be rather more targeted than “£250,000 to invest”, or whatever the figure happens to be.

The answers are becoming more specific, such as: 

“Retired company directors with complex pension circumstances who want us to help them create and manage an income in retirement”,  

“Divorcing women who need help getting the pension arrangements right”, or 

“Family-owned limited companies who need help in organising the transition to the next generation while preserving the accumulated wealth.”

You can see the point. By creating very targeted profiles, known as avatars, the firm can see exactly who they want to work with, how they want to work together and, crucially, why the clients may want to work with them.

Now comes the hard bit.

David Scarlett once said: “You should be highly visible to your target client, and invisible to everyone else.” He is right.

So how do you do this? How do you become the go-to firm for retiring directors? How do you make sure, if there is a tricky divorce case at a firm of solicitors near you, that you are the one they call? 

How you do that is the subject of whole books but the starting point is the following exercise:

For your top 20 clients, do you have the following information?

  • Age
  • Occupation or former occupation
  • Family circumstances
  • Risk profiling score
  • Overall net worth
  • Income and how they are paid (for example, self-employed, salaried, bonus, dividends)
  • Amount invested with you
  • Hobbies – where do they spend their time?
  • How do they like to work with you? Delegators? Hands on? Are you comfortable with this?
  • Do they refer other clients,and are these the right sort of clients?
  • Do your staff like working with them (perhaps based on a traffic light system)? 

Put all this information together, and look at patterns.

There will be cluster points. This tells you the two to three types of people you work best with. Best usually means you know them, they trust you, you are their first port of call, and your staff know and like them. Then target people that look like that.

If only it were that simple, but it is a starting point at least. In short, focus on the clients you work best with.

Phil Billingham is a director of the Phil Billingham Partnership and Perceptive Planning 



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  1. So much time is spent on asset allocation yet most advisers have a single source of revenue based on AUM income allocation is just as important for the firm a mix of income streams yet so few recognise this

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