Close Close

Practice Management > Building Your Business

How the Clients You Don’t Take Can Grow Your Firm

Your article was successfully shared with the contacts you provided.

I’ve written many times about the problems that arise when advisory business owners let their egos get in the way of sound decisions. One example of this that doesn’t get talked about much is the use of prescreens for prospective clients.

I know, many of you are just too busy to waste any time with prospects who don’t meet your firm’s client standards. I suppose we all get a psychic boost from being the gatekeepers to an exclusive club — especially one that we own. But let me ask you this: Suppose those meetings could have provided a major source of business growth? How would that make your ego feel?

I had my “aha!” moment about prescreens about 10 years ago in a conversation with one of my advisor clients. I was giving him the party line about not wasting time with undersized prospects when he responded that they were the biggest source of his firm’s growth. What he went on to tell me changed my advice to owner-advisors — and the way I run my own business.

(Related: 10 Sales Behaviors That Prospects Hate)

Here’s the deal. When an advisor prescreens a client prospect, it may make the advisor feel more successful or exclusive, but it also sends two messages to the prospect. First, you’ve told them that they aren’t “enough” of something: wealthy, successful, promising, connected, etc. And second, that your time is just too valuable to be wasted on them. How do you think that makes them feel? If you said “not very good,” you get a cookie.

More importantly, how do you think that makes them feel about you and your business? Again, “not very good” receives top marks. Now have someone in your local community who doesn’t feel very good about you and your firm. How do you think they’ll respond if asked about your firm?

To make matters worse, if your advisory business is like most, you probably turn away at least as many prospects as you accept as clients. That means you have a growing army of folks in your community who probably aren’t going to say very good things about you.

As my client pointed out to me years ago, it doesn’t have to be that way. Suppose instead of turning half your prospects into critics, you turned them into fans?

As it turns out, the formula for making this transition is quite simple. When a prospect doesn’t meet your firm’s minimums, instead of turning them away, take the meeting. Yes, I know that you’re important and busy, but bear with me here. In that meeting, mention your firm’s minimums, but then ask them what they need and what they are looking for, and help them find the advice they need.

Most of the time that can be easily done by maintaining referral relationships with a few advisors who work with smaller clients. Occasionally, it will require a bit more work, but either way, it will be worth the effort because that prospect will have nothing but good things to say about you to anyone who asks. And, when and if their financial needs outgrow the advisor you recommended, they will more than likely turn to you and your firm.

According to my advisor client, this simple technique completely eliminated any need for marketing, while enabling him to grow the business beyond his goals. Following his advice, I’ve been able to surpass my own business goals, as well.

The marketing gurus will always tell you to go by the numbers — do things you can quantify. But you can’t quantify good will. In most communities, successful advisory businesses (and consulting businesses) are built on good reputations and glowing referrals.

— Read Pump the Brakes: Why You Should Wait to Build a Billion-Dollar Firm on ThinkAdvisor. 


© 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.