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Dear Bev,
One of our junior advisors, Cheri, has proven to be an excellent salesperson. She is comfortable talking to anyone about what we do, and she has managed to find a number of leads from her personal connections. We’ve not asked this of her — she’s just self-motivated.
It all sounds good, except the people she is bringing in don’t fit our mold for the right type of client. It’s not only the AUM — although in all cases they are far below our minimums — it’s also the make-up of the client. We work primarily with business owners and very successful corporate executives, and these are younger families early in their working careers. Some are making only $75,000–$100,000 per year, which is not enough to cover a family of three or four people and save for investing.
We don’t want to squash Cheri’s enthusiasm, and she is proving to be a great role model even for our longer-term advisors who aren’t as comfortable selling. We use the term “inspiring” to describe her. She has been an energizer for our office. At the same time, we can’t keep making exceptions and bringing in these clients who don’t fit our mold and for whom we’ve had to make pricing concessions and charge planning fees only.
I know many firms want newer advisors who can sell, and we do, too! However, I’m perplexed about the best way to move forward.
I.T.
Dear I.T.,
I’d say this is a good problem to have, but it’s really not. You are walking a fine line between supporting Cheri and her enthusiasm and attending to the needs of the business and the brand you have built over the years. The enthusiasm and energy can be great, but not if they aren’t additive to what the business has stood for and needs going forward.
I don’t want to be negative, but I would have preferred you didn’t make exceptions already to Cheri’s clients without a strategy in place for next steps. For example, if you had determined you were going to carve out a separate group dedicated to younger clients building their wealth who only need planning, or if Cheri was going to manage all planning clients with no assets, or if you were selecting those clients who would someday fit your mold (i.e. starting a business or working in a significant corporate career) then you could continue to pursue these clients. It sounds like you aren’t planning on doing this and instead regret bringing in the clients you have and don’t want more.
In this case, you need to quickly have a heart-to-heart with Cheri and outline the dilemma. You can remind her about your firm’s focus and the type of clients you have built the firm around and want to continue to source. Making exceptions over time can be expensive, cause compliance nightmares and take the firm’s attention away from what has made you successful. Cheri might be new enough in her career that she hasn’t put all of these pieces together to understand the overall impact.
Take an educational approach. Underscore how pleased you are about her energy and excitement and how much you want her to be an enthused member of the team. Perhaps you could guide her on how to find opportunities more aligned with your ideal client focus. You might be able to help her with evaluating whether a client meets firm requirements and how to ask good open-ended questions to know someone is a good fit.
In the meantime, you have this handful of clients who don’t fit your mold. You’ve got to consider what you want to do with them for the short- and longer term. If you have charged a planning fee, can you be done until they come back for investing needs? Can you carve out a niche and have a small team dedicated to planning-only clients? Can you find a way to be profitable with this focus for the business? As a firm, you want to consider implications for these clients as quickly as possible.
Dear Bev,
We have five centers of influence (COIs) on our referral list. We send over a dozen clients apiece to them every year so they can help the clients with their taxes and estate work. However, we get nothing in return.
I hear a lot about COI marketing and COI referrals, but I have yet to see how this works in practice.
D.M.
Dear D.M.,
This is a refrain I consistently hear from advisors. Your clients need access to additional experts to round out their needs, but those experts don’t necessarily have clients who also need you. Or they don’t feel the responsibility to make the referrals a two-way street.
I always advise to have an open and honest conversation with these COIs. They might not have realized you expected something in return — a quid pro quo, if you will. As much as you think they understand your business and the kind of clients you work with, I’ve spoken with enough accountants and attorneys over time on behalf of my advisors to know that isn’t the case. They often cannot differentiate between one advisor to another. With all due respect, you can all look the same to them. Even if you have taken the time to let them know more about who you are and what you do well and your differentiators, when is the last time you had this conversation?
I ask advisors to think about COIs as the perpetual prospect. When you are working with a prospect, you are often thinking about what else you can do to get their attention, or show them you are different. It should be no different with a COI.
Think about them. What do they care about? What issues are their clients wrestling with? What’s happening in their business? What is going on in their personal lives of interest? If you don’t know the answers to these questions, you don’t really know the COI outside of a pure referral, source and therefore they don’t necessarily know or relate to you.
It’s a relationship. It’s not just a referral. Deepen the relationship, show you are interested, follow up, and stay connected. Then see if this might have shifted their interest in working with you.
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Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022, 2023, 2024, 2025 and 2026. Beverly is currently an adjunct professor at Suffolk University teaching Executive MBA students Leadership and Managing Teams. She is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
