A small but relevant poll by SEI Advisor Network released last week hit the nail on the head for financial advisors.

Not surprisingly, 66% of advisors surveyed indicated their top priority this year is growing their business. Client referrals won the race as the leading choice of how to bolster assets under management, followed by solidifying professional relationships for referrals and creating a marketing plan.

While these results were not surprising, they brought up the question: Do advisors actually have the time to devote to such tasks?

How could advisors possibly find the time to focus on garnering referrals both from their clients and other professional networks, much less the hours it requires to create and implement a new marketing plan from scratch?

While there are a myriad of exercises financial advisors can put into action to create more time in their day, there is one vital part of the formula those drills leave out: working with clients.

Thus, for this week’s column, I am diving into an aspect of your job that most of you don’t want to talk about—an aspect that can be the key to your growth this year and the ones ahead: Letting some of your clients go.

Everyone has them — clients that take up too much time and account for too little of your bottom line. And we’ve all heard the excuses. “But he’s been with me from the start. He’d be crushed if I let him go.”

No matter how you look at it, it’s a simple equation: Having clients that don’t add enough to your bottom line limits your growth and inhibits your ability to carry out the recruitment activities that are essential to expanding your practice. So despite all of your concerns, it’s time for you to think about this process. For a few tips on doing so, I spoke with Paul Lofties, vice president of wealth management and acquisitions at Securities America.

First things first, you must determine which clients are pushing you up and which are weighing you down. To do this, Lofties recommends segmenting your clients.

While some advisors segment clients by revenues, services required and even groups of clients they prefer to work with, Lofties suggested keeping it simple and just looking at revenues. Once you have your clients ranked by the revenue they bring in, separate them into A, B, C and D clients. As and Bs are your top moneymakers, while Cs and Ds are your bottom feeders. This is the group to consider releasing.

Now that you’ve targeted which clients are limiting your growth, the next step is creating a structured approach for releasing them from your services. The most common option is a partial book sale, in which you sell the bottom tier of your book of business to another advisor who is either at an earlier stage in his career—and to whom these clients will make up a large percentage of his book—or a junior rep who is looking to create his own book.

To find a buyer, Lofties recommended turning to your broker-dealer, many of which have match services for just such transactions. If you aren’t affiliated with a broker-dealer, there are a bevy of companies who provide such services, such as FP Transitions. Going through a broker-dealer allows the deal to happen much faster, howeer, as the broker-dealer is often attuned to handling the paperwork and the compliance hoops you have to jump through when executing such a deal.

The second option is transferring these accounts to a junior rep. While this can be a good way to keep these clients feeling like they are still a part of your firm’s family, Lofties warned against hiring additional staff simply to take care of these smaller, unprofitable accounts. For a sole practitioner, a multi-person practice is a whole different business model.

“The advisors need to be committed to the idea of being a branch manager, having multiple junior reps, having the multi-advisor office,” Lofties said. “Otherwise, they won’t be successful because they will be taking on a lot of new roles they haven’t had experience with before and that don’t fit in philosophically with what they want to do.”

Next week, I will discuss the third option for releasing clients and how often you should be taking a look at this process. I will also address the many concerns advisors have with letting clients go.

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