Fifty-six percent of RIAs say growth is their main strategic objective this year, according to a survey released Monday by Facet Wealth, a financial services company.
Yet many advisors serve unprofitable clients because they know these clients still need and deserve financial planning services, Facet Wealth’s chief financial officer Lisa Rapuano said in a statement.
Forty-four percent of survey respondents said they did not enforce their firm’s stated minimums, and 17% had no minimums at all. Not only that, 52% said they had no formal process for segmenting and then transitioning clients who do not meet their minimums.
“At the end of the day, advisors want to do right by their clients, and some who might not be considered ‘ideal’ from a business growth perspective may also be among their earliest and most steadfast relationships,” Rapuano said.
“As our industry trends toward professionalization, a majority of advisors are reluctant to let these clients go or relegate them to inferior tiers of service, even as the same advisors face flatlining growth and loss of their time.”
Canam Research conducted the survey via email invitations in which some 360 U.S.-based financial advisors participated.
Forty-five percent of respondents said time constraints were one of their biggest pain points in managing their practice, while 42% cited growing their book of business.