Raymond James advisor Jack Kennedy reached a "crossroads" last year.

After years of bringing in as many clients as possible, and giving all of them the same level of service, Kennedy said his $194 million firm in the Philadelphia suburb of West Deptford, N. J., was operating over capacity.

As a result, Kennedy Investment Group began concentrating on the quality of its relationships, Kennedy told colleagues at a packed “top advisor” session during last week's Raymond James Financial Services conference in Dallas. By segmenting out the top 20% of those client relationships, the firm revitalized its business was revitalized, Kennedy said -- and more concretely, increased revenues by 28% over a six-month period.

6-STEP PROCESS

Kennedy explained his firm's six-step process.

Identify the problem: In earlier years, success was measured by new accounts and assets under management. But that led to increasing expenditures, decreasing profits, decreasing team morale and productivity and “compromised” service and client outcomes, Kennedy said. “There was zero balance between professional and personal life and 100% of our time was spent working in the practice and not working on the practice,” he said.

Analyze and segment clients: Kennedy says he either gave unprofitable relationships to a call center or assigned them to another Raymond James office. The firm then divided the remaining qualified clients into two groups. The majority were placed in a new “asset management services” division, while the top 20% went into a “concierge services” division.

Define criteria: Concierge clients had to possess at least three of these five characteristics:

  • $500,000 or more in investable assets
  • At least $4,000 in annual recurring revenue
  • The potential to achieve the above criteria within 24 months
  • “Raving fan” who could build the brand with qualified referrals
  • Trustee or power-of-attorney holder for a concierge client

Asset management clients, meanwhile, had to meet three of five of these criteria:

  • $250,000 or more in investable assets
  • At least $1,500 in annual recurring revenue
  • Clearly defined “net worth acceleration” plan in place
  • “Raving fan” who could build the brand with qualified referrals
  • Trustee or power-of-attorney holder for another firm client in a multi-generational household

Define needs and services: After the two groups were split, top clients received a greater level of service. Among the offerings: Comprehensive wealth management and planning, estate planning, tax planning, legacy planning, asset protection planning and retirement planning, as well as a scorecard measuring how the firm is living up to its promises. The remaining firm clients get asset management services as well as net worth acceleration assistance, insurance planning -- and, again, a scorecard measuring how the firm is living up to its promises.

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