Fee based advisors, how are you calculating Lifetime Value of clients? Minimum account size, management fee, average time the client stays on the books. Do you account for asset growth? Thanks!

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There’s a lot of variables to this question. Minimum account size depends on what your book size is currently and how you want to scale your business. Also depends on the customer base you’re dealing with. In a perfect world, you could calculate the Net Present Value of future fees charged to the account using 2-3% (rate of inflation) as the discount rate and the cash flows growing by the expected growth rate of that account, which could he 4% for a conservative account or 10% for a moderately aggressive account.

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