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March 24, 2015 at 11:02 AM
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.”
