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Ron Carson: Why Adding the Right Clients Beats Adding More Clients

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What You Need to Know

  • Advisors should avoid taking on clients who aren't willing to delegate financial decisions, Carson Wealth's Paul West says.
  • Advisors shouldn't keep clients who mistreat their team, even if they have large accounts.
  • It’s also important to figure out what the ideal client for your firm looks like, Carson Group CEO Ron Carson says.

Selecting the right clients makes much more sense for advisors than just adding as many clients as they can to boost their assets under management and profits, according to Carson Group executives.

It also avoids a lot of headaches down the road, they said Thursday during a session called “It’s Not All About the Benjamins: Evolving as an Advisor in the Post-Pandemic Era,” at the company’s Excell 2021 conference in Las Vegas.

“I am crystal clear with our team [that] when we talk to our prospective clients, we say the following: ‘We work with either business owners, executives or multi-generational families. If you’re not one of those three, that’s OK. We’re just not the right fit for you,’” Paul West, managing partner of Carson Wealth, told attendees and those viewing virtually.

Another important question he likes to ask prospective clients: “Are you a financial delegator or not?” If they say they don’t know, he’ll ask whether they use a CPA, an estate or trust specialist, or manage their own money, he noted.

“If you’re not a delegator and if you’re not going to be able to relinquish control, then again, we’re not going to be a good fit because you have to trust us to let us do what we do,” West said.

All advisors have likely made mistakes during their careers that they may end up repeating, according to Ron Carson, CEO and founder of Carson Group. It’s important to figure out what the ideal client looks like, what’s the ideal outcome and what’s the ideal behavior for such clients, he said.

“If you don’t have that process and you see dollar signs and you work with people you otherwise wouldn’t really want to work with, what’s that do to your energy? What’s that do to the team?” he asked rhetorically.

Agreeing, West said he came to the realization that “it’s OK not to work with someone that we can’t give the right value for what they need — specifically we can’t be all things to all people.”

Carson responded: “But you used to try to be, right?”

More on this topic

West conceded that he used to because he “wanted the business.” Now he is focused on only the “right people,” he added.

As an example, West said: “We recently, in the last three months, turned down a $37 million family. Why? Because … they weren’t going to be a delegator.” In the past, he would have taken them on as new clients, he admitted.

West asked advisors in the audience if they had any clients whose phone calls they dreaded getting. “I don’t have any of those anymore,” he said. “And that’s a big, big difference.”

Carson said he had made similar mistakes in the past.

He recalled a client he had brought on a long time ago: “I knew [he] was going to be difficult but I saw dollar signs — and he didn’t treat my team well, and I remember ‘firing’ him, and it hurt because it was literally 25% of my advisory assets and we hadn’t collected the first penny on him.”

But “he demonstrated he was going to be a royal pain in the ass right from the beginning,” according to Carson. “My team appreciated” dropping him and, “yeah, we missed the business in the short run but longer down the road not at all.”

About 8-9 years later, there was another client like that, Carson recalled. An advisor told him about a prospect who was a pain but a big account. Carson told the advisor about his own experience, he said, and warned that if he took on the client, he would regret it and end up dropping the person.

“And that’s exactly what happened,” Carson said. “Sometimes we have to learn on our own.”

(Pictured: Ron Carson, CEO of Carson Group)