Are you paying enough attention to your top 20 clients?

It’s surprising how few top clients get the time or attention they deserve from their advisors, said John Rhodes, vice president of practice management and training at investment management firm CNL Capital Markets.

Rhodes spoke before about 60 planners at LPL Financial’s annual conference, focus13, held this week in San Diego.

“What percent of our total revenue comes from your top 20 clients?” Rhodes asked the gathering at the San Diego Convention Center. One advisor called out, “70%!” “Same,” said another; “80%,” said a third.

At presentations nationwide for nearly eight years, Rhodes said, he’s never heard an advisor say much less than 70%. Yet too many advisors lose those top clients, he added -- either by ignoring their importance or because of poor client management skills.

Rhodes said many advisors haven’t even taken the time to identify their top clients and calculate how much they contribute to annual revenues -- a step he urged all his listeners to do.


Among his other practice management recommendations:

  • Use internal rating systems so that staff members can clearly to identify when top clients are on the phone. But don’t use any system that hints at lower-quality clients -- such as an A/B/C ranking. (Try A/AA/AAA instead.)
  • Gather information about your top clients' other advisors, from lawyers to CPAs in search of referrals.
  • Draw up a menu of related services that your firm offers -- with the associated fees. Then, when a top client asks for help with, for example, valuing her business before a sale, charge a fee for that service. “They do expect to pay you for their services,” he said.
  • Keep records by sending letters, copies of which remain in the client’s file, of specific advice you gave at specific times – and whether or not a client followed that advice. If, for example, you instructed a doctor to buy more life insurance and he refused to do so because of his other annual insurance costs are high, keep a copy of the letter you sent him documenting that advice. If he dies in a car crash and his son wants to know why there wasn’t sufficient life insurance in place to cover estate tax bills, you will be able to readily show him. (“We have clients sign a waiver letter if they are going to refuse life insurance and particularly long-term care insurance,” one advisor in the audience offered. That's good, Rhodes responded -- adding that advisors have been sued over such client decisions.)


Rhodes also emphasized that advisors must customize services for top clients. These people "go to the closet and put on a piece of customized clothing," he told advisors. "They stop to get a customized cup of coffee on the way to work in the morning. Your best clients expect” this level of service, he added.

Gather details about your clients’ habits, hobbies and favorite things, to help you show appreciation effectively. If they have pets, he suggested, give them gifts for those pets; if they have grandchildren, offer something for them.

As inspiration, Rhodes told listeners the story of a planner who called the fishing lodge where he knew that one of his top 20 clients was headed on vacation. “What kind of insects are fish biting right now?” the planner asked someone at the lodge.

When the client arrived, he discovered the the advisor had ordered a box containing the right seasonal bait.

That's not just appreciation, Rhodes noted -- that's marketing. When the clients’ fishing buddies -- who are likely to be in the same net-worth bracket -- noted that the fish weren’t biting as well for them, “What do you think they’re talking about?” Rhodes asked in a rhetorical question.

His answer: They're probably saying, “My financial advisor has never done anything like that.”

Read more:


Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access