Expanding your client base is undoubtedly one of the most important factors when growing a business; however, Conrad Francis, founding director of Inspired Money, said on an Advisely webinar that there needs to be “quality controls” in place to ensure that you are signing on the right clients.
Although it may seem that quantity would be the name of the game – bringing in more clients to drive up revenue – Francis argued that having steps in place throughout the onboarding process can help determine whether or not they are the right fit for the business while also saving time later if and when they are signed on as a client.
“That’s always going to be a challenge when you’re scaling and growing so you just need to make sure that your checks and balances are in place,” Francis said.
One of the strategies JBS Financial Strategists chief executive and founder Jenny Brown uses in her firm is that, before a meeting is set, a senior adviser will have a short call with the prospective client to assess their appropriateness for the firm.
If the adviser decides they aren’t the right fit, they will refer them on to another business or information source that can help them address their concerns. But even so, Brown said “it’s really hard” to have to turn clients away.
Both Francis and Brown hinted at the need to have checkpoints at the early stages of onboarding to ensure the fit and quality of the client, but also that they are committed to the work that comes with getting advice.
“There is a questionnaire that’s sent out from that first conversation. So, if they do tick the box and we see that they could be a good prospect, then they’ve got to fill in that first form because if they’re not prepared to do some work then we can’t meet with them. It’s as simple as that,” Brown said.
“It’s very much trying to narrow out those that aren’t the ideal clients and send them somewhere else.”
Building on this, independent financial adviser Nathan Fradley explained that having too wide a client base can lead to inefficiencies and too much variation that ultimately puts a strain on business processes, making it more expensive and time-consuming to deliver services.
“If you’re trying to scale and scale quickly, you should be aligning everything you do with the people you work with,” Fradley said.
“Working with older clients means, when I have less digital approaches than younger clients, if I’m trying to mix the bag too many times, it’s going to create challenges.”
Having stepped out on his own last March, Fradley said “you’ve got to be strong, especially if you’re a single AR building it yourself”.
He suggested that, while you may feel like you need to accept everyone who walks through your door, doing so could leave you feeling stuck with clients you don’t like working with and it can hurt your business.
“They’re the ones that take longer. They’re the problem clients. They’re the ones you don’t like working with. They’re the ones you dread picking up the phone for. They drain you mentally. They drain your time. That’s going to be the handbrake on your business,” Fradley said.
However, it is important to note that while there will be prospects that clearly are not a fit for the business, there will also be those that might not be ready for advice yet but have the potential to be a client in the future.
For these reasons, Brown said, it is important to maintain communication touchpoints through regular email newsletters, for example, fostering that relationship until they are ready to take the next step.
