Skip navigation
spreadsheet glasses nikoniko_happy/iStock/Thinkstock

Are You Game for a Feasibility Study?

Get ready for a heightened awareness of time, value and money.

CLEVELAND — “I take great pride in the service we provide for our clients,” Carl stated as he puffed out his chest with pride and then added a zinger, “I don’t believe that any advisor who truly carries out his service promises has time for marketing.”

Carl had just set me straight. Or did he? Hardly. Carl simply provided a lame rationalization for not having any strategy for client acquisition, much less efficient practice management.  After asking a few questions, it was obvious that Carl was true to his word — he provided a lot of service to his clients. His challenge was that he was providing a lot of service to every client.

This is Carl’s book in round numbers (I asked him to keep it simple): $800K production, 200 clients. We agreed that he was working an average of 45 weeks per year, putting in about 40 hours per week — providing him around 1,800 working hours per year. Simple math allocated 9 hours per client, per year.   

After listening to his service model: four review meetings and four personal calls per year, it was obvious he had no time for marketing. Each review lasted 1 1/2 hours, prep and post review time was estimated at 30 minutes and phone calls at 15 minutes. All of which conveniently totaled 9 hours per client. I’m not sure whether Carl had calculated the numbers in his head to make them fit or if it was a coincidence. It doesn’t matter. His real challenge was whether or not he’d be game for a feasibility study. Surprisingly, he was.

To create his feasibility study, I suggested he use an Excel spreadsheet and record the following: revenue, assets, upgrade, advocate, time requirement for each client. Afterward, I requested that he shoot me an email about what he learned. My instructions were rather bare bones as there were a number of advisors in the queue with questions and quite frankly, I never expected to hear from Carl. But in less than two weeks, I received a detailed email which I’ll summarize.

He had 195 clients and his 2016 production was $805K. 73 percent of his revenue ($587,650) came from 37 clients, with a minimum annual revenue of $10K per client; some were over $20K — averaging $16,000 per client annually. 158 clients generated $217,350, averaging $1,376 per client annually. 

Without getting into the upgrade, advocate, time requirement findings, the above alone was a huge aha-moment for Carl. It also explained his defensive comments about marketing and his quick turnaround to my feasibility challenge. Deep inside he knew something needed to change. He just didn’t know where to begin.

Yet, from this simple feasibility study, without any guidance, Carl began the process of overhauling his service model. He determined that he was going to have three tiers of service: Platinum for his top 50 clients ($10,000 minimum annual revenue), Gold for the next 100 ($2,000 minimum annual revenue) and Silver for the rest.      

At this juncture, I’m not sure where he stands on the service details for each tier — as he’s now working through our "7 Steps to Ideal Service Models" with one of our coaches — but I do know that he’s made time for marketing. He’s looking to acquire only Platinum clients. I’ll keep you posted on his progress. 

Our experience with advisors working through this feasibility study is a heightened awareness of time, value and money. It’s not unusual to see advisors with three or four tiers of service, with the majority of their working hours being eaten up by middle-tier clients. Usually, this is at the expense of time that could be used to strengthen relationships with top-tier clients. All of this becomes more real when looked at from the lens of time, value and money.

What Carl is about to discover in his quest for more Platinum clients is that service is the new sales. With more time to spend on his top 37 clients, he’ll be able to personalize relationships and meet people in his client’s spheres-of-influence — which should result in new Platinum clients.

Carl was game for the feasibility study, now good things are happening. Are you game?

Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.