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Account Minimums as a Metric for Finding Ideal Clients [Episode 21]

Episode description

Every advisor doesn’t necessarily need to establish a clear-cut account minimum for their clients. In fact, Micah Shilanski doesn’t have one in his practice. He has a system of fees in place which function in a very similar way.

But for those who do establish account minimums, like Matthew Jarvis, this all-important number will guarantee, at the very least, the growth of your practice.

To ensure that you practice what Matt and Micah consider to be one of the most important facets of the industry, they provide some great advice on the topic through these keys talking points.

[#1 Be Ready For Clients Who Are Below Your Minimums]

  • Matt starts off right away with the recommendation that you should know how to react to the select clients who fall below the account minimum you have set in place.
  • A great practice that Matthew likes to utilize when clients don’t meet the mark is to refer them elsewhere using an apt analogy. He likens himself to a cardiologist. But what the client actually needs is a neurosurgeon. No hard feelings, just not at the right place.
  • In addition, for those who perhaps get irked that you won’t take them on as clients, explain to them that by taking on any more clients, you run the risk of spreading yourself a little thin and taking away value from already existing clients.

[#2 It’s OK to Tell People No! ]

  • It’s hard to tell people no sometimes. If you have a new practice, if you have a more general enterprise versus niche clientele, the idea of turning people away from your venture can be difficult.
  • Micah says one of the quickest ways to grow your practice is to respectfully tell prospects that don’t fit, no.

[#3 Discounted Fees? Not a Good Idea! ]

  • The question of ‘what if it’s someone you know?’ comes up and Micah states that every instance where he has been involved with a discounted fee situation has blown up in his face in some say or another.
  • But Micah also does state that he has done some pro bono work in the past with strict conditions in place that actually led to the making of very strong clients he still works with to this day.

[#4 The Risks of a Hybrid Firm ]

  • Matthew says that making your firm a quasi-charity will probably lead to burnout because you are burning valuable time and resources on many different cases. You aren’t really doing anyone that much of a favor.
  • As Micah states this hybrid dynamic (part charity, part financial advising practice) makes for a confusing time for clients. This is because so many clients are part of the same network and know each other. If you have a reputation for pro bono work, recommending clients becomes harder: “Do I recommend those who need cheap work or those who will bring more value to the practice?”

[#5 Common Mistakes Most Advisors Make ]

  • All business is not good business. In this respect you risk running into the quantity over quality realm i.e. rushing around in a mad frenzy with too many clients.
  • If you are afraid that your hard account minimum (say $750,000 in revenue) is too much and you’ll miss out on so many clients, don’t worry! The million dollar clients are out there and will find you.

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Matt and Micah’s Action Items

  1. Develop a strategy for communicating with the prospects that you are not interested in working with.
  2. Train your team on how to filter phone conversations regarding inquiring prospects who want to join as clients.
  3. Determine who your ideal client is: assets, age, profession, location, and so forth.
  4. Set your soft and hard minimums.
  5. Have an outlet for pro bono cases.

More details at: https://theperfectria.com/account-minimums-as-a-metric-for-finding-ideal-clients

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Produced by Simpler Media

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