Stop Trying To Hold Onto Your Clients - FP Advance

Stop Trying To Hold Onto Your Clients

BY brett

As your business grows you are forced to reconfigure the structure of your team. 

You don’t do that to be clever. 

You don’t do that to make everyone’s life more difficult.  

You do it because the new configuration will allow you to service your clients more effectively whilst scaling and growing and helping even more people. 

The early years

In the early years of building your business, you were the only adviser. 

But now you have a full bank of clients yourself and are growing your team. Does it make sense for you to continue servicing all of your existing clients?

No. It doesn’t.

Why do I say that?

Meeting brand new prospects and converting them into ongoing clients is still the true art of being a successful financial planner because there are so many soft skills required to complement an adviser’s technical knowledge to be successful at it. 

In mature financial planning firms, the original owner (or owners) will often have built a client bank with 100 or more clients that generate £500,000+ of revenue per year. Happy days.

Servicing that existing mature client bank takes up a huge amount of their time. So much time in fact that they hand off a lot of the new leads to their less experienced advisers. 

So now you’ve got the most experienced adviser in the business doing the servicing work on clients that are already on board and you’ve got the less experienced advisers doing the highest skill work in trying to engage new clients.

This makes no sense. 

Finding advisers, or creating and training advisers to ‘service’ existing clients is easy. Basically, they just have to be nice people, technically competent, with the right support around them. 

Converting prospects into clients on the other hand is an art. Surely the most experienced person in the firm should be performing that role. 

Talented experienced owner-advisers should be letting go of their existing clients and handing them across to servicing advisers so they (the most talented rainmakers) can generate hundreds of thousands of pounds of work for their businesses.

A real-world example

In more than a few firms I’m working with right now, I’ve got owners who are super busy servicing an existing client bank and struggling for time.

They are also getting frustrated with their younger or less experienced advisers who are not ‘performing’ at a level the owner deems good enough. 

Owner advisers spend their lives trying to get the other advisers in their firms to perform like them. However, this is a ridiculously unrealistic expectation when the other advisers are earlier in their career curve. 

To be honest the owner didn’t perform as they do now until recently, which is 15-20 years into their career.

This unrealistic expectation comes across as pressure and disappointment to the less experienced advisers. 

How do most firms try to combat perceived under-performance?

“Let’s put them on a variable remuneration package to ‘incentivise’ them.”

If you’ve tried this you’ll know how it goes. Badly.


Because their motivation is not the problem. It’s their skills. And to develop the same level of skill and expertise as you will probably take about the same time it took you. 

Sure, you can accelerate that learning curve by putting a lot of training and development time into your advisers (which I highly recommend by the way), but most firms don’t actually do that. 

The training programme in most firms is, “Hang in there.”

I know I’m being a bit cheeky here to make the point, but can you see the fatal flaw in this approach, and yet almost everyone is doing it. 

Pressuring people or incentivising people is not the way to develop them and this outdated structure is not the way to grow your firm and enjoy yourself along the way. 

In this approach, everyone ends up frustrated and disappointed to some extent.

Why not try this?

If you’ve got some good advisers working in your business, instead of hoping, praying and waiting for them to become as good as you, why not demonstrate your confidence in them by giving them a full book of clients?

As I said earlier, servicing existing clients is a much easier thing to do. 

If you’ve personally got 120 clients generating £600,000 of annual revenue, you could keep your top 20 client relationships and move the rest across to one or two of your good quality up-and-coming advisers. It goes without saying that they’re at a level where you believe they can manage these clients. 

Your top 20 clients might generate £200,000 or £300,000 of revenue in this situation. So you’re keeping the more complex and high-value relationships. However, you’ve now freed up a lot of your time which could be spent rainmaking (you’re probably best at that) and seeing new client leads that come through the door (you’re definitely best at that). 

Why not have one of the other advisers in every new client meeting with you too? As soon as the client is secured, you can immediately hand off the ongoing servicing to them.

Why don’t firms do this?

The blockage is usually the remuneration strategy within the business.

A typical remuneration structure for an up-and-coming adviser will be:

Base Salary: say £40,000

Variable remuneration: 35% of all revenue generated above £120,000  (a 3x qualification level)

There are two problems with this approach.

a.) The productivity issue I’ve been outlining so far. They’re not as good as you at finding and securing new clients.

b.) Your direct expenses (what you pay away to advisers) are now locked in at 35%, which is high. 

Imagine if you changed your thinking and did the following:

  • Owner adviser retains their top 20 clients which generate £250,000 of annual revenue.
  • Owner adviser ‘gives’ 100 clients to ‘servicing’ adviser (who they trust) – the servicing adviser now has a full client book and manages £350,000 of revenue (plus any new business they pick up).

At the same time, I would be changing the remuneration for the servicing adviser. 

I might move them to a salary package of £80,000, or £90,000, or even £100,000 depending on their experience and value to the business. And I mean a total cost salary package that includes car, pension etc.

You will know how much you need to pay for them to feel loved and appreciated. On any of these salary levels, and by removing the qualification aspect of their pay, you’re sending a strong message that you really value and respect them as part of the team. 

DO NOT talk percentage splits with the servicing adviser. 

DO tell them their new amazing salary package and how much you love them as part of the team.

Now you’ve broken the link between paying away a percentage of revenue and the adviser’s salary package. 

If they are getting paid say £90,000 for managing £350,000 of revenue, that’s the equivalent of a 30% pay away. As they grow the revenue stream each year we don’t need to be increasing their package at the same rate. 

Sure, if they are very good at securing the new business that naturally flows from an existing client bank, and if you hand off newly secured clients to them too, they might grow the revenue that they manage to £450,000 in a couple of years’ time. 

For performance like this, you might increase their salary package (total cost) to say £120,000. I reckon they’d be over the moon.

And your direct expense pay away is now less than 27%. 

Can you see that this is a win/win for both the less experienced adviser and you and the business?

They don’t need to be ‘incentivised’ to do this. Most people just want to do a good job. 

And obviously, make sure the person you are appointing as a servicing adviser is ‘a keeper’ and trustworthy and not someone who is likely to go and set up their own firm. Most of these servicing types are not that, they are employees. 

If you treat them right and keep them growing, stretching and developing, they can become the future leaders and owners in your business.

Let go to grow.

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ABOUT BRETT DAVIDSON When you work with FP Advance you work with me, Brett Davidson, directly. My motto is ‘advise better, live better’ and I practice what I preach. I’m straight talking and get to the heart of an issue quickly. There’s no beating about the bush, just a focus on helping things improve. Ask my clients – what I teach works.