If you read this blog often, you know I’m a big believer in the math of business.  If you know your numbers, you’re more than halfway there to improve them.  If you don’t, then you’re just winging it.

One of my least favorite questions (and I hear it more from advisors than I do prospective clients) is, “What’s your account minimum?”

Although my average client has close to $1 million with me, would it surprise you to learn that I don’t have an account minimum?  Why would I?  Does a doctor require a certain level of illness before he’ll work with a patient who needs him?


I do have a percentage minimum.  In other words, I require a certain percentage of my clients’ manageable assets before I will work with him/her.

That percentage is 100.

If a prospect with $2 million asks me to manage half, I will always decline politely.

“Mrs. Jones, may I be candid?  I think it will be in your best interest for you to let current advisor manage all of your money. “

Or, “Mrs. Jones, If you’re comfortable managing half of your money, why not all of it?”

Let’s consider some of the possible motivations held by the client:

  1. She logically thinks it’s wise to hire you, but she doesn’t fully trust you yet.
  2. She’d like to learn from what you do and apply those strategies to the half they manage.
  3. She wishes to try you out by comparing you to her current advisor before making a final decision.
  4. She’d like to get your expertise for half price.
  5. She doesn’t want to hurt the feelings of her current advisor.
  6. She thinks she’s a pretty good money manager but hires you as a hedge.

Whatever the motivation, the circumstances are less than ideal for her.  She’s clearly not experiencing a level of anxiety so high that she wants you to alleviate it.

About now, some of you are thinking, “Hey, if I can get half her money, it’s a matter of time before I get the rest.”  It’s a nice, yet unrealistic, way to look at it.  You get the satisfaction of making a sale, but you are vulnerable every quarter when she calculates her returns.  You’re also NOT acting in your client’s best interest.  You’ll hear things from them like:

“What did you do specifically to earn your fee this past quarter?”

“My other account is doing much better.”

“Last quarter I put half my portfolio in XM Radio and it tripled.  Why didn’t you do that?”

Every time we accept less than 100%, we forfeit the role of a holistic, financial caretaker and instead become a product salesperson.  No longer are we guiding our clients toward achieving their goals, but are instead competing against other forces in our attempt to do our job.

Sure, we get the adrenalin boost of having made a sale, but it’s quickly offset by the trap we’ve set we’ve set for ourselves down the road

Acquiring 100% of the managed assets is not difficult if you have a system in place where the client would never consider doing anything but.  When a doctor treats you, how often do you put limits on how and where he can examine?  What would your doctor’s reaction be if you told him he could examine only the left side of your body, not the right?

A system that by default acquires 100% of your clients’ assets will make you considerably more profitable, even if it means sends a few away.  In the end, you’ll have more assets with fewer clients, raising your average AUM.

If you’d like to learn about such a system, click here.