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How Many Clients Should An Advisor Have?


Pardon the interruption from the tax-focused series. I wanted to write quickly on a subject I covered recently on a short video I uploaded to LinkedIn. You can find the original video here on my YouTube channel. This is what I describe as one of my “nugget” videos as they are less than a couple of minutes in length and are more general in nature as opposed to diving deep on a wealth management concept. Regardless, the reaction on LinkedIn made me realize I probably should share it here.

 

The topic of the video is on What is the Right Number of Clients for an advisory firm.  As some background, over the years I have had lots of conversations from advisors about how many clients they have.  When I started at Merrill Lynch it wasn’t unusual for an advisor to have several hundred clients.  Even “small” firms will have 150 or so clients.  Heck, the advisor who was one of the people who recruited me into this profession had 800 households, which means more than 800 individuals.  And he ran a one advisor office! A common factor with all these conversations was these advisors bragged about how many clients they had.  I used to get caught up in this competition until I realized I was focusing on something not important to me.

 

When I launched my firm I set a firm number of clients I would take on.  Since launch I realized that number, which was under 100, was still too large.  Why was it too large?  Simply, I couldn’t spend the appropriate amount of time with a client they deserved.  I updated my maximum number to 52 clients.  Yes, that number is conveniently connected to the weeks in a year.   Now, you know I am a rather analytical sort. As I’ve tracked the amount of time I spend on a client every year it nearly matches up to a full week’s worth of work.

 

Now, here’s the real reason I am covering this topic. Some feedback from my LinkedIn post was eye-opening to me.  Apparently, I seem to be in the minority of advisors who frequently is asked by potential clients as to how many clients I have. This is a recurring question I get and I also share how many clients I will take at maximum. To me, this are two key questions every potential client should be asking an advisor.

 

I’m not questioning how many clients are too many or just right. That is up to the advisor and their clients. For me, I just know I have a set number based on my service standards and the type of practice I run (quality over quantity). I simply think it is important for every client to understand the advisor’s rationale for how many clients he or she has. So, if you don’t know the answers to these questions, go ahead and ask your advisor now. It is only fair you know and it is an easy question any real financial advisor can answer.