Want to build the ideal practice? Start by limiting the number of clients you serve

(March 2006) When it comes right down to it, the financial services industry is all about the future. We encourage our clients to think about the kind of future they see for themselves and their families. Then, we ask them to take action today in order to realize that vision. What we are selling our clients is a better future, delivered in a relatively simple, process-driven form.

Given this basic truth, I’ve always found it ironic that so many of the advisors I talk to have such a difficult time describing the vision they have for their businesses. I suppose that’s understandable for two reasons. First, when dealing with day-to-day details of running a financial services practice, visualizing your future doesn’t always make the priority list. Second, the task of business planning seems so complex it "stonewalls" a lot of people.

So let me make this a little easier for you. Ask yourself this very simple question. There is no right or wrong answer to it, but the answer you do give will drive the future of your business for years.

How many clients do you want to serve?

Your answer to this question is a core determinant of how you would go about building your practice. For example, if your goal is to build a small practice serving a focused client group, then you’ll take very different actions than the advisor who wants to manage the wealth of 800 client families. If on the other hand you have aspirations of running a multiple-advisor branch, you’ll need to do something very different to achieve your vision.

Determining the number of clients you would like to serve helps you structure a value proposition and systemize your core business functions: wealth management, client service, and marketing strategies. Knowing the number of clients to serve will get you thinking about the type of business you want to run, and what kind of future you want to enjoy. Allow me to explain what I mean by way of a real-life example.

An advisor I worked with operated in a suburb of a major city. At one point, he served over 1,100 client families. He didn’t do it alone, of course — he had a team of three associates, several assistants and administration staff, an estate planning specialist, a receptionist, a marketing coordinator, and a host of others to help him. He was the branch. By all accounts, it was a very successful business and he had the top line and bottom line numbers to prove it.

Being the biggest and the best in his market was his vision from day one. And he decided a branch approach was the way to do it. Therefore, in the running of this business, the advisor focused on what he did best, and organized his time to work with only those clients who contributed the most. Lower-tiered clients had to be content with minimal face-to-face contact. Mid-tiered clients were only able to meet with the advisor at select times throughout the year. All other contact was routed through very well-trained associates and assistants, who also took ownership of his vision and business philosophies. In addition, clients would also have to be satisfied with a focused selection of products and services. Through the years, the advisor stayed true to his business plan, much like a bank would.

As for the advisor personally, he made what most of us would call "sacrifices" in realizing his dream. He spent a lot of time at the office — ten hours a day on average. And after "family time", he would head to the home office to finish his day. To achieve his dream, he worked on family vacations and used technology to the max 24/7.

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