The Fact:
About half of financial advisors set a minimum asset level for their clients. For planners the average minimum is $75,000 and for brokers it is $120,000. Ninety-seven per cent of advisors will sometimes or always overlook that minimum if a referral is made by a top client.

The Implications:
The propensity to overlook minimums can be interpreted in one of two ways. In the first, advisors may be assuming that a top client will leave if a referral is directed to someone else in the firm or practice. In the second, advisors are not fully committed to minimums. In either case, advisors appear willing to work with unprofitable clients.

The Idea:
Many advisors who would otherwise enforce a minimum neglect to do so if a prospect is referred by a top client. Because your top client likely receives a very high level of service, expectations may, as a result, be mismatched from the outset of the relationship. Instead, make your service commitment clear to your client and let him or her decide if it is appropriate for you to meet the prospect. For example, you could say “I’d be happy to meet with John. Now I obviously don’t know his circumstances at this point, but it’s fair to let you know that we do have a minimum investment level of $100,000. That allows us to offer the service level that you would receive. We do accept smaller accounts, but my associate, Jennifer is the main contact for those clients.” If it’s the child of a good client, you may simply look at this as part of the family assets and waive your minimum.

The Next Step:
The Business Success Kit provides you with the tips, tools and templates that you’ll need to enhance practice productivity and profitability. It’s the most practical and comprehensive guidebook available for financial advisors. For more information, visit www.caifastore.com and click on the Business Success Kit.