To become more profitable, embrace revising your existing client service

Young boy having fun with American dollars and a piggy bank

By AdviceBridge

You’ve probably read numerous articles advising that if you want to grow your financial planning business you should make the most of the clients you already have before you spend time, effort, and money trying to sign up new business.

Various studies have shown that finding and acquiring new clients could cost five times as much as retaining existing customers.

The same but different…

28% of advisers struggle to service existing clients profitably.

Many financial advisers struggle to make servicing smaller, legacy clients pay off.

In fact, in 2019, servicing existing clients was cited as one of the top business challenges by 28% of advisers.

Today, the pandemic has changed the focus for many advice firms.

However, according to findings published by Fidelity FundsNetwork, 59% of advisers have struggled to attract new clients. So, looking at your existing client bank and reviewing how you could service them differently, in a positive and beneficial way, may be a good place to start when looking at ways to grow your business. And don’t be fooled into thinking it will cost more to provide a better service either.

You already hold the key to revenue growth

To understand how your existing clients could make your business more profitable, it’s interesting to look at findings from adviser research carried out by Russell Investments in New Zealand.

Based on data collected from thousands of advisers over two decades, research found there are two critical metrics that correlate with firm revenue production: return on assets, and revenue per household.

On average, Russell Investments found that:

  • The top 20% of clients generate nearly 80% of the firm’s total revenue
  • The bottom 50% of clients typically generate less than 5% of the firm’s total revenue.

According to these stats, half the client relationships an average adviser has on their books are unprofitable. And, therefore, probably don’t generate enough revenue to make it worth your time servicing them.

Change your relationship with unprofitable clients and capitalise on the growth opportunity

It is this challenge that presents a “tremendous opportunity for growth”. But you need to begin by changing your relationship with those clients you deem unprofitable.

By changing how you work with them, you could increase the amount of revenue you get from half of your client bank.

At some point, you will have already invested time in finding and forming a working relationship with these clients. Working out how to re-position yourself and make these unprofitable clients profitable could prove more efficient than searching for new leads. This re-engagement should also enable you to receive more referrals and, in turn, meet new clients too.

How to re-position and re-engage existing clients

By demonstrating to your clients that you’re ready and able to look after their needs today, you remind them you’ll be ready and available to help them in the years ahead.

To ensure you’re able to service your smaller clients in a way that is economically viable, take time to consider how technology can help.

Using technology could prove an efficient way to service smaller clients more profitably.

In a single move, you could focus on clients you already have, become more profitable with little monetary cost, and, finally, seek new business from a potentially stronger position.

We have all seen huge technology advances in recent years, and tech adoption has seen significant acceleration in financial services during the Covid pandemic.

Integrate AdviceBridge technology into your business

By integrating the right technology into your business, you can:

  • Work more efficiently (increasing profitably)
  • Service more clients (more profitably)
  • Offer clients a wider range of service options.

Technology is better, faster, and more intuitive than ever before. And the AdviceBridge software enables you to deliver automated and personalised financial advice profitably to all your clients.

The AdviceBridge platform includes an alternative yet more efficient cashflow modelling tool, suitable for all clients. It is quicker and more user-friendly than many alternative cashflow planning tools. This alone helps make your business more cost efficient.

Through complete automation, AdviceBridge saves you time and money to allow more time to focus on the advice relationship.

And, when you’re ready to spend to generate new business, the platform reduces the time taken to onboard a new client from between 35 and 40 hours to less than 5 hours. This time saving translates into an 80% reduction in costs and a 70% increase in profit.

Get in touch

If you want to find out how AdviceBridge can benefit your business and your clients, please get in touch. Email or call us on 020 3925 3850.