Firm owners — and advisors themselves — must recognize when an advisor has become overloaded (or “maxed out” on their client load) and take steps to solve the problem.
The symptoms are obvious: When an advisor is spending more time in the office than usual, working weekends and/or holidays, appearing increasingly frazzled, or making mistakes with clients that they never used to make. Nine times out of 10 this is happening because their client load has become too large.
What can you do about it?
Some advisors may check to see if they have clients who require an unusual amount of hand-holding or take up more of their time than their fees cover; typically, those issues can be resolved by limiting how much time such clients spend their advisor, by raising the client’s fees, or doing both.
In most cases, overload stems from gradually adding more clients than the advisor can work with on a reasonable schedule. The good news is the solution is usually quite simple. The bad news is that resolving the issue entails something many advisors fear or dislike: transitioning some of their client load to another advisor(s) — which risks losing the associated income streams.
But this shift is really not as hard — or risky — as it sounds. And it includes exploiting one of the few advantages that financial advisors have over other professional services businesses.
One of the biggest problems that other professions — such as doctors, lawyers and accountants — have is that if their clients/patients don’t like what they hear, they can just walk across the street to a another professional.
In contrast, financial advisory clients are more “sticky.” If they want to change advisors, that usually means they’ll have to move their money — and at a minimum, they’ll have to fill out and sign another briefcase full of documents. Plus, they’ll have to find someone else to trust before they take these steps.
Advisors need to keep in mind that their clients may not want another advisor — but they really don’t want to move to another advisory firm either.
How to Offload