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5 Clients Are Better Than 500, Says One Advisor

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How many clients do financial advisors need to succeed: 10, 100, 500? Anthony Lombardi believes less is more and has a unique approach to achieving that goal.

Trust is vital to business relationships, it is not easily earned and, ironically, for advisors at least, it may still not be enough to achieve ultimate success.

The reason trust is a necessary but insufficient condition of business success is that your clients may trust you and yet trust someone else even more.

That other person, according to Perfect Client founder Lombardi, is most likely the client’s CPA.

The Carlsbad, California-based coaching firm trains financial advisors how to establish close working relationships with CPAs. When we last met up with Lombardi, he shared with ThinkAdvisor how cutting his clients from 860 to zero actually boosted his income.

The advisor and coach of course didn’t give up work altogether, but his own Lombardi Group transitioned from a focus on end-clients to one in which he completely subordinated his advisory firm’s case-management capabilities to the needs of CPAs and their clients.

The approach was born of the frustration of working hard to earn trust that still was insufficient to close large sales.

“As an advisor you’re sometimes working with hundreds and hundreds of people, and so developing only [minimal trust] with everybody,” Lombardi told ThinkAdvisor in a follow-up phone interview.

“You can’t do more than that envelope of trust contains,” he continued. “So let’s increase the trust envelope. Let’s make it so big that it’s actually larger than that relationship will ever need. So I can have just 10 or 15 relationships, so I can do everything with that client.”

Indeed, Lombardi’s own advisory firm currently has 14 CPA relationships, with Lombardi and his partner Alex Sonkin each managing seven.

The reason why Lombardi’s envelope of trust admits just CPAs is because experience taught him that end-clients still sought their CPA’s approval for big financial decisions despite all the time and effort he put in those relationships.

“You’ve got to go where the leverage is,” he said.

“When your trust envelope exceeds anything [the CPA] needs,” Lombardi continued, “now you can take care of five or 10 of his best clients; if you have 10 of those relationships, you’re serving 50, 60 or 70 affluent clients a year.”

So the formula is actually trust plus leverage equals a very large volume of business, but subtracted out of the equation are the 70- to 80-hour weeks that top-producing advisors have to work.

Lombardi related his own income production/work reduction story in our previous interview, but this time told of his partner Sonkin. “He’s got work ethic like nobody I’ve ever seen; [but] the only one working less hours in the office is me,” Lombardi said.

“When we became partners, he was just going to rent office space,” Lombardi recalled of their first encounter. “He had a very successful practice working with the super affluent, but he had no life.”

“Today, if he’s in the office 15 hours a week, that’s a lot.”

Lombardi saw him the morning we spoke at the school their children both attend. “He was with his wife and youngest boy, and he’s in his sweats and T-shirt. I don’t know if he’s planning on coming into the office today.”

When he’s not spending time with his family or the five CPA clients he actively manages (two of the seven relationships are currently inactive), Sonkin spends a lot of time teaching about relationships—the very system Lombardi taught him when they met.

“He didn’t know the first thing about CPAs or what CPAs needed,” yet Lombardi estimates some 90,000 CPAs “dial in” to his CPA-oriented continuing professional education courses.

That sort of career trajectory—building fewer, trusted relationships with CPAs to earn more and spend more time on personal objectives—is the expected outcome of Perfect Client training.

“In two years, every graduate [should] have five strategic, dynamic, integrated relationships with CPAs,” said Lombardi. “From those five relationships, they can expect two or three opportunities to work with the CPA’s very best clients.”

The important idea here is that these advisors were previously earning $750,000 to $1 million a year, but achieving that high income with 400 clients and long work weeks. Lombardi believes they can achieve the same income, and more over time, but working five leveraged relationships.

“It requires the same effort [as ordinary client relationships] so […] why not build trust with a [CPA] who has leverage?” Lombardi asked.

“You can have 200 relationships that each have four ounces of trust, or build 15 that have 500 ounces of trust,” he said.

– Related on ThinkAdvisor: Advisor Goes From 860 Clients to Zero, Makes More Money


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