Close Close

Portfolio > Investment VIPs

5 Steps to Finding the Right Fit for Engaged Clients

Your article was successfully shared with the contacts you provided.

Be honest.  How many of your current clients fit with your profile of the ideal client? If you are like the majority of advisors, it’s a relatively low number.  Given that nearly 90% of advisors say that getting the ‘fit’ right is important, we might expect a different outcome. With that as context, the second part of our journey toward client engagement  is all about working with the right clients.

(View the original article relating findings of my research into how to foster engaged clients in the October issue of Investment Advisor, and the first follow-up blog posting to that article on AdvisorOne.)

When it comes to creating client engagement, fit matters. If fit matters, then finding a way to assess fit as part of your discovery process also matters. Taking it one step further, if fit isn’t there, we need to find the self-discipline to walk away from the relationship. That’s the tough part.

Below are five steps we’ve identified on how to determine if a prospective client, or an existing client, actually fits.

Step 1: Define Your Ideal

What are the core components of fit? There is a practical hierarchy that starts with the hard factors, such as language, geography and assets. These should be deal-breakers, and it’s easy to spot a lack of alignment with a prospective client. Ensuring that clients meet a minimum asset level—which of course may differ from one advisor to the next—is core to ensuring the relationship is profitable.

The reality, however, is that not all profitable clients are created equally. Some will remain profitable, even satisfied, but relatively passive. Others can become deeply engaged and not only be satisfied but also help drive growth through referrals. The right fit demands that you take honest stock of not only your preferences and strengths, but your infrastructure. Start with a simple exercise and answer the following question.  What characterizes the clients for whom I can do my best work?

Step 2: Set Minimum Standards

Based on your assessment of the ideal client, translate those into minimum standards: a set of qualifying criteria to work with you and your team. The standards will differ from one advisor to the next, but could include such characteristics as:

  • Is willing to invest the time to create a comprehensive financial plan
  • Has realistic expectations with respect to market performance
  • Will meet as a couple or family
  • Prefers to delegate decision making to a professional 

Step 3: Create an Assessment Process

Once you have determined the ‘right fit,’ it’s time to tackle the biggest obstacle: how you identify those prospective clients who don’t fit.  Many advisors have taken the time to define their ideal, but when it comes to applying that definition to their onboarding process, things quickly unravel. 

Below is a small sample of questions that might help you assess fit. Some are designed to help you think about a personality fit and some to identify potentially problematic clients.

  • Can you tell me about your experience with your last advisor?  What worked and what didn’t?
  • What would have to happen in five years for you to consider this a great relationship?
  • When the market fluctuates up and down (and your investments do, too) is your initial reaction to remain calm, worry a little, worry a lot?
  • How would you define the level of clarity you have with respect to your financial goals?
  • How often do you expect to meet your advisor to review your plan or portfolio?
  • During especially turbulent economic times, would you like a high degree of hand-holding or are you comfortable things will work out?
  • Are you someone who prefers to understand all options in detail before making a decision or do you just the basic facts?
  • Do you prefer to be actively involved in making decisions around investments, or do you prefer to leave the decisions to your adviser?
  • What emphasis would you like your advisor to place on helping you to understand the market, your investments and other issues that may affect your financial life? 

Step 4: Define the Process for Prospects Who Don’t Fit

Assuming you’ve taken the first three steps in the process, the big question now is what you will do with the information you’ve gathered. Defining your ideal and process is a start—sticking to your guns when a prospective client is clearly not a good fit is very different. The reality is that asking the questions won’t matter if you do not listen to the answers and consider those carefully before deciding to work with a client. The process is about ensuring that the prospective client finds the best solution, so you should not feel in any way uncomfortable if you are not the best solution.

From a tactical perspective, just ensure you respond through the eyes of the client if the fit is wrong. Let the client know that you don’t think you are the best person to help her reach her goals, and help her take the next step with a referral to someone you know who might be a better fit.

Step 5: Define the Process for Existing Clients Who Don’t Fit

As you work through the process of defining and assessing fit, your existing clients will no doubt come to mind.  It’s one thing to walk away from a prospective client, but what about those existing clients who don’t fit?  There is a very good chance that if you don’t think there is a fit, they don’t either.  These clients are unlikely to be fully satisfied with the relationship; they may well be complacent if not actively disgruntled.

At a minimum, assess your existing clients against your ideal client definition to quantify the scale of the issue.  It may help to recognize that you have limited capacity, which means that every one of those ‘wrong’ clients is taking a seat from a ‘right’ client. It may be time to consider culling your book

Successful and engaged relationships are such because they are personal. They are, of course, built on a foundation of sound advice and service, but they are more and they are deeper. Engagement has a chance to happen when you and the client “fit.”  In Part 3 of this series later this month we’ll examine the role of your service offering in client engagement.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.