If a potential client asks you whether your firm is taking on new clients, do you know what to say? Too often RIAs fumble the answer, trying to size up the prospect's net worth on the spot rather than providing a straight answer, says Joe Duran, founder and chief executive officer of United Capital Financial Partners, an RIA firm that oversees a national network of private wealth counseling firms. During an interview excerpted here, Duran talked about the client load question-particularly urgent in this climate-yet too few advisors know how to respond to it.
"Whenever we talk to advisors, even when they have $1.5 billion in assets, I ask them: 'How many client slots can you handle? They say, 'Probably 20.' And where is the bottleneck? They say, 'I don't know. I've never thought about it.' Well, every doctor knows that. Every nurse knows that. Every dentist knows that. Every accountant knows it. And we're sitting here, claiming to be service professionals. How can we possibly not know the answer to that question?
"The 'seats on the bus' is an amazing concept. You convey the idea that no matter the size of your bus, the number of seats or where the passengers sit, you're all going to get there. You have to, because the underlying premise is you have to get your clients to their goals."
LOOKING AT SEGMENTS
"Advisors are really realizing they've got to figure a way to understand how to service different levels of clients. Say you have a client with $100,000 and you are giving that person the same service offerings as clients with $2 million. One client is paying you $1,000 in fees; the other is paying $20,000 in fees. That doesn't mean you should punish the person paying you $1,000, but you cannot afford to offer the same service to those two clients. That is probably the single most important thing we do when we come into a practice. We say, 'You have to offer segmented services.'"
"We do case reviews, where the senior partner at that office reviews every single client case during a weekly meeting. He or she says to the junior planner, 'Tell me about that client.' The partner can then say: 'The client needs long-term-care insurance; the client needs to adjust or lengthen their time of work.' That conversation takes 15 minutes. Relaying the message takes an hour."