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Guest blog: Why existing clients hold the answer to a more profitable advice business

When you think about growing your financial planning business, you probably focus on the different ways you can attract new clients. That might be through social media marketing, advertising, or PR.

In fact, your greatest opportunity for growing revenue could be right under your nose.

Acquiring new customers is said to cost five times as much as retaining existing customers, yet many financial planners struggle to make the most of the clients they already have.

Often, this is because looking after the needs of smaller, legacy clients simply isn’t economical. A 2019 report by Fidelity FundsNetwork found servicing existing clients was named as a top business challenge by 28% of advisers, just behind compliance and regulatory challenges.

Now, technology exists that can help you to service your smaller clients profitably. By focusing on the clients that you already have, you could put yourself on the path to a more gainful financial planning business.

Your existing book holds the key to revenue growth

To understand how your existing clients could make your business more profitable, it’s worth drawing on the findings of adviser research by Russell Investments in Australia. Many of the conclusions are relevant to financial planners here in the UK.

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

“These metrics show that the most optimal path to growth does not involve increasing your assets under management – your AUM,” the report states. “Instead, it involves increasing the productivity of assets you already have under management, for your existing clients.”

It goes on to say: “In other words, the best opportunity to grow revenue and increase practice efficiency may be by prospecting your own existing book.”

For any financial planner struggling to find new clients, this may come as a breath of fresh air.

Unprofitable clients can be made profitable

Russell Investments’ data also found that, for the average adviser, the bottom 50% of clients typically generate less than 5% of the firm’s total revenue. So, half of your client relationships could be failing to generate enough revenue for you to justify servicing them.

What if you could flip this problem on its head and view those 50% of clients as an opportunity? By changing the way in which you work with them, you could increase the amount of revenue you get from half of your client bank.

Remember, these are people who you’ve already spent time finding and building an initial relationship with. It could prove far more efficient to make these existing clients profitable than to go back to square one trying to generate new leads.

Existing clients open up advice opportunities

Re-engaging your existing clients could open up new advice opportunities – but without the associated cost of acquiring new clients.

If a client’s financial needs and circumstances have changed since your last meeting, they could have an advice need right now.

Alternatively, their financial planning needs might become more comprehensive in the future when they’ve built up wealth and are approaching retirement. If you’re able to offer them an advice service now, they’ll be far more likely to approach you for help in the future.

To future-proof your business, you need to demonstrate to your clients that you’re looking after their needs today and will continue to do so in the years ahead.

Technology is the answer

We’ve established that existing clients hold the answer to a more profitable financial planning business. But how do you ensure you’re servicing your smaller clients in a way that’s economically viable?

The answer lies in technology. By integrating technology into your business model, you can work more efficiently, service a greater number of clients, and ensure you’re offering clients the most appropriate advice model.

With the coronavirus pandemic resulting in people’s lives and work being conducted from home, there’s never been a better time to try new software tools.

And the good news is that technology is becoming better, faster and more intuitive all the time. For example, AdviceBridge’s financial planning app enables you to deliver automated and personalised financial advice profitably to all your clients.

Whether you want to provide your clients with a cashflow modelling tool, make your business more cost-efficient, or get automated alerts for potential advice opportunities, our easy-to-use app is a great way of maximising profits.

Get in touch

If you want to find out how AdviceBridge can help you grow your business, please get in touch. Email or call us on 020 3925 3850. You can also visit our website at to book a quick demo with our friendly team.

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