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Lighten the load

Sarah Steimer

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Three ways advisors can shift their attention to the most lucrative clients and tasks.

An advisor has only so many hours in their day, and — despite all the tips and tricks to maximize those hours — that means some work must be moved off their plates. Cost analyses of an advisor’s time dictate that advisors cut some of their less-lucrative work, which can include certain clients.

But not all advisors feel comfortable making such cuts, and instead look to other solutions such as shifting clients to others with more bandwidth — such as semi-retired individuals or those just beginning their advising careers — or opt for more technological solutions.

Creating an opportunity for clients — and young advisors

Anthony G. Engrassia, ChFC, LUTCF, a 25-year MDRT member from Rocky Mount, North Carolina, USA, wasn’t feeling energized or challenged by some of his clients. He sat down and assigned a dollar value to each of his clients and calculated what his time was worth. According to his estimations, he found he was getting underpaid for working with certain people, and it didn’t make financial sense to continue spending as much time as he did with about 50% of his clients.

“It wasn’t fair to them and it wasn’t fair to us,” Engrassia said. “It didn’t give me the passion, and it certainly wasn’t working to my unique ability. We needed to make a decision: Do we fire them or bring someone on as an associate advisor to take care of them?”

Engrassia and his firm chose the latter option, moving some of the less-lucrative clients to an associate advisor just getting started in the business. Engrassia would introduce the client to the associate advisor and explain the latter’s role in the organization. He said it was key to set a very clear expectation that the associate advisor is now the client’s point person.

My first suit jacket I bought was from Goodwill. I know what it’s like to be at that bottom.
— Anthony G. Engrassia

The trickiest part was that these clients would often still call to ask Engrassia their questions. To help ease the transition, Engrassia would feed his answers through the associate advisor, who would call the client back with the information.

“If I returned the call, they wouldn’t get information back for about two days,” Engrassia said. “If they got hold of the associate advisor, they got the answer right then and there. We made sure they didn’t get the information right away when they came to me.”

Not only do clients get a more immediate response by contacting the associate advisor, they also receive more regular check-ins. Engrassia said he would only typically have time to contact such clients once a year, but the associate advisor reaches out quarterly. New clients may also be passed immediately to the associate advisor to consider.

The clients benefit from this alternative relationship, but so does the associate advisor. Engrassia meets with the advisor once a week to discuss which client relationships should be established or developed, and which prospects should be pursued and when.

This development likely stems from Engrassia’s own beginnings in the industry, which helped him intimately understand the opportunities that exist from starting with less-lucrative clients.

“When I started in the business in 1990, I started with $6,000 to my name,” Engrassia recalled. “My first suit jacket I bought was from Goodwill — it’s hanging on my conference room wall. I know what it’s like to be at that bottom. And they (less-lucrative clients) are the ones who got me where I am today.”

The bottom 50% of your client only generate 5% of your revenue.
— Adam Rex

Engrassia organizes his clients into bronze, silver, gold and platinum levels, and has been able to shift many of the bronze and even silver clients to his associate advisor. (He also just hired another such employee for a second location.) The shift freed up his time, allowing him to double the time used to focus on his platinum and gold clients.

“I did have one client say, ‘It was almost impossible for me ever to get a time scheduled for you without going two months out,’” Engrassia said. “They felt like they weren’t getting the attention that they should have. I said, ‘You’re exactly right. That’s why we’ve done what we’ve done. This way you can get the attention that you need and deserve.’”

Partnering with a semi-retired professional

Eleven-year MDRT member Adam Thomas Rex, CFP, AIF, from Virginia Beach, Virginia, USA, said his firm used its CRM platform to track how many hours, on average, they would spend with each client. The firm shared the findings with a consultant, who in turn explained that if they wanted to reach their income goal, they needed to cull their client list.

“Everybody is kind of familiar with the idea that 80% of your revenue comes from the top 20% of your clients,” Rex said. “There’s also the five and 50 rule, which says the bottom 50% of your clients only generate 5% of your revenue. When we saw that, we were like, Holy cow, this is time-consuming and not revenue-positive.”

Rex originally thought technology was more likely to solve the firm’s problem, but in waiting for the perfect robotic solution, they decided to go the human route. He and his brother, 19-year MDRT member Bryan Rex, CFP, ChFC — they run the family business — first thought of their semi-retired father, who was still a CFP and started the firm; however, they decided he was too integrated into the business to be their ideal solution.

“Once we figured out what we needed to accomplish, it needed to be financial planning engagements,” Rex said. “It needed to be time-boxed and dollar-boxed, for lack of a better word. A client was going to pay X amount of money for X amount of time, and they were going to get financial planning types of services.”

Rex and his brother initially considered bringing on a younger advisor, but instead looked to the opposite end of the spectrum by tapping another semi-retired professional who already had a successful career and was now looking to work at their own pace. The brothers reached out to a CFP in their study group and asked if he was interested in offering financial planning and coaching services — and he was. The CFP has a joint rep code with Rex’s firm through the business’ broker-dealer.

What Rex and his brother found in working with their ideal clients — typically business owners with about $5 million of investable assets — is that a number of them were interested in hiring their firm to work with a son or daughter to help them get the basics right: 401(k) plans, IRAs, disability insurance, life insurance and so forth.

These clients are now funneled to the CFP, whom Rex refers to as their coach. Clients have four meetings or check-ins per year with him, which begin with data-gathering and goes into providing information and coaching. After the year ends, clients can continue working with the coach and sign a new financial planning engagement for the next year.

“We’re only two years into this, so we don’t have a ton of data, but we’ve gotten way more referrals to this solution than we would have expected,” Rex said.

One of their biggest success stories for the new program came by way of a top client referring her daughter. Rex said the mother has contacted his firm to express her excitement about how the coaching has changed the daughter’s financial planning abilities. The client said that, for the first time in her daughter’s life, she paid her bills, accumulated money, hasn’t been asking for money and has a retirement plan.

That I’m able to maintain my productivity with half the time has been a real eye-opening situation.
— Jonathan Peter Kestle

“I think it has everything to do with the short accountability,” Rex said. “It’s the fact that this CFP is going to be calling every quarter. He’s going to say, ‘Hey, remember you said you were going to open up the Roth? Did you do it?’”

Rex noted that neither his firm nor the coach have custody of any of the assets under the program, nor are clients investing with them — which he said allows for objectivity on the coach’s part.

“With dad mostly retired now, we are painfully aware of how little time we have to spend with our best clients,” Rex said, explaining that the firm breaks its clients into levels such as 1A, A, B and C. “Obviously, we want to be in front of and on the phone with our 1A’s and A’s. We had a goal for this year, that we’re going to be in front of them 10% more. At first blush, we’re probably on track for that for 2021.”

Digital assistance

Firms that categorize their clients into different levels may choose to solve the problem of limited time by shifting off their work for less-lucrative clients. But some advisors, such as seven-year MDRT member Jonathan Peter Kestle, CLU, B Com, from Ingersoll, Ontario, Canada, don’t segment their clients — and therefore opt to cut the time-consuming work for all clients.

“We always go back to the adage that if there’s a problem, you make it a process,” Kestle said. “We developed a process for discovery, for learning about where someone was in their financial journey.”

This process helped better leverage the firm’s time, but they found one step that could be better managed. Kestle said his firm believes in putting money back into the business if they see a solid return on investment, and one such investment is hiring summer students. One student was a math major home for the summer, and he built a spreadsheet process out for the firm based on its defined process or framework for decision-making. It was such a success that it attracted interest from other advisors and firms, which in turn incentivized the firm to invest further and turn the spreadsheet into a software tool.

“The interface, where we could collect the information and put it in, sorted out as a nice big spreadsheet that would get calculations for our projection, and build a report for us as well,” Kestle said. Whereas it once took the firm four or five days to put together a retirement decumulation projection, it now took about an hour.

Kestle says having such a process has resulted in being able to achieve the same production with 50% of his time. He said he’s currently using the other 50% of his time to develop the software further. “That I’m able to maintain my productivity with half the time has been a real eye-opening situation,” he said. “Because if I was spending 100% of my time in the business, obviously my production would be double what it is.”

While Kestle’s solution doesn’t involve moving clients to another member of his team or an outside coach, it is similar in the underlying effort to win back time and boost production: Review what your time is worth and shift tasks accordingly.


Anthony Engrassia

Jonathan Kestle

Adam Rex


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