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what’s Pereira O’Dell SF like these days?
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Let me solve this for you. Decide how many hours a week you want to work. Let's pretend you want to work 40 hours. Ask yourself this question...do you have 40 hours worth of WORK per week? Work defined as either prospecting / closing new business OR reviews / managing existing relationships. If you WANT to work 40 hours a week and are only doing 20 hours a week of the above activity, you should be taking anything you can get (that isn't a compliance risk), and STOP doing whatever the fuck you are doing with the other 20 hours a week (paperwork, "market research," wholesaler meetings, and other bullshit). If you ARE filling all 40 hours (or whatever level of work you want to put in) with those activities, only take accounts that are at least as big as your smallest / least productive / biggest pain in the ass account. And when you get a larger account than your current smallest, sell the smallest account in your book to someone else at your b/d, or just send them to the call center (unless you decide you want to work 42 hours per week, etc.).This isn't rocket science. I'm constantly amazed at people that will turn down a $58,000 wrap account, but will spend 14 hours a week on Seeking Alpha learning some shit that is irrelevant and pointless, 3 hours a week with wholesalers, etc. Turn down revenue when you have idle time? Smart. For what? An ego stroke? Lame.Take a class in operations management if you're really that unsure. Or read the book "The Goal" (it's unrelated to our business, but some of the concepts about idle time are applicable).
Until you hit 50mm AUM you have no business with minimums. One suggestion is once you have enough AUM to create your desired lifestyle try to tailor your marketing to attract more affluent clients. I've just started doing this. Went upmarket and hosting a seminar next week that has been very well received. It's going to be very impactful. While I will still accept MOST clients my future marketing will be directed to those with greater means.
No, there isn't a level where you're just not willing to take. And your brackets are silly. No one has a $10,000 minimum because there's no material difference between $5,000, $10,000, and $19,000. Same with $100K vs $150K. No one draws their limit at $136,500. More accurate would be No Minimum$25K$50K$100K$250K$500K$1MM+
I don't think you need to set minimums, if you can find a way to serve the segments of your business efficiently. Create service models (number of meetings, how and when you will communicate with your client, investment strategy, and the deliverables of financial planning) based on which segment the client is in. HNW (however you might define it) may get 2-4 meetings a year, customized portfolios, and their hand held throughout the planning process. Clients at lower end of your spectrum get 1 meeting per year, model portfolios and recommendations on their plan (but you don't necessarily have to implement it for them). All clients are important and you don't have to turn away business, but the only way to survive is to focus time and energy on the clients you want to work with
Depends on your book/business style. We have a soft 1mm minimum but our total book is a hair under $1.2bn. We'll take less for managed money tho
DB Root - interesting opinion on minimums. How has that affected your business?
It's been a lifesaver... like in every industry, ours adheres to the 80:20 rule. 80% of my time was being consumed by tasks for clients that generate 20% of my revenue. But because I honestly do feel that every client is important, I couldn't simply ignore those tasks...so I had to change my process. I needed an efficient investment management process that provided a thoughtful allocation, but had a one button solution. I had to leverage technology so I was not traveling to meetings where it didn't make sense economically. And I had to limit the time that I spent coordinating meetings between clients and attorneys and CPA's. Finding efficiencies allowed me to focus 80% of my time on clients and prospects that account for 80% of my revenue...and not leave smaller clients in the dust. It's "right-serving" the client base. So far so good...
You have to enjoy the people in your practice — that’s the minimum.
Much of this conversation depend on what your time is worth and where you are in your career and in building your book of business. For us we have calculated that any accounts under $250k we are actually losing money. It's a hard concept to understand until you reach the level of joy having enough resources and time in the day to manage what you have. My advice is to check these numbers every year.