Set Your Financial Advisory Business Up for Success by Defining Your Ideal Client
As a business owner, we love to see the hands raised of people who need our help; however, not every individual may be a suitable fit for our services.
An ideal client can be a pleasure to work with, is easy to communicate with, pays on time, and has reasonable expectations. They understand the value of the product or service they are receiving and are willing to pay a fair price for it. They may also provide positive referrals and repeat business.
Knowing your ideal client can make a big difference in the success and satisfaction of your business. It can help create a positive and enjoyable work environment and lead to long-term, mutually beneficial relationships.
Identifying your ideal client is an important first step to attracting more of them, but different businesses and professionals have different preferences and priorities. What your ideal client looks like won’t be the same as what another financial advisor’s ideal client looks like.
The Advantages of Knowing Your Ideal Client
Identifying and attracting your ideal clients creates a snowball of positive effects for your business. When you’re primarily working with the types of clients you’ve identified as ideal, your entire business can become more efficient and effective, saving you time and money. Once you understand these clients’ specific needs and preferences, you can tailor your products or services to them, which lets you focus service offerings to those that your ideal clients want and need. In turn, this leads to more satisfied and loyal customers with whom you can build strong, long-term, perhaps even multi-generational relationships. These types of customers tend to be a great source of referrals, many of whom will also be your ideal client type. Further, ideal clients are willing to pay a fair price for your services, increasing your profitability and helping your business grow. As the icing on the cake, your ideal clients will be more enjoyable for you and your staff to work with, increasing your whole office’s overall job satisfaction.
Ultimately, an ideal client is a good fit for your business and is likely to result in a positive and mutually beneficial relationship.
How to Identify an Ideal Client
Define your target market: Start by identifying the clients most likely to benefit from your services. Consider factors such as their asset size, investment goals, risk tolerance, value alignment, and budget. For example:
Has a minimum of $500,000 in investable assets
Is actively seeking financial advice and planning
Has a clear understanding of their short-term and long-term financial goals
Values and priorities that align with the advisor's, such as a focus on sustainability or impact investing
Is willing to invest in their financial future and pay for financial services
Consider your unique selling proposition: What sets you apart from your competitors, and how can that be valuable to your ideal clients? Things to consider are:
Specializations or certifications
Investment philosophy
Technology or platform capabilities
Client service
Identify key criteria: Determine the key characteristics that your ideal clients should possess. These may include their needs, values, goals, and pain points. These can include:
Estate planning or tax minimization
Philanthropy focus
Goals of paying off their children’s education or generating a certain level of income in retirement
Lack of financial literacy or overwhelmed by finances
Define your ideal client persona: Create a detailed profile of your ideal clients, including demographics, behaviors, and motivations. This can help you better understand their needs and tailor your marketing efforts to attract them. For example:
Age 65+
Inv Assets: $1M+
Early into retirement
Getting used to a new lifestyle; spending money instead of accumulating money
Wants a trusted advisor to stay up-to-date to make sure they’re still on track
Enjoys gardening, traveling with their families, and volunteering
Evaluate your current client base: Look at your current client base and identify which clients are most profitable and enjoyable to work with. This can help you identify patterns and characteristics indicative of ideal clients. For example:
Values professional guidance
Willing to delegate financial management
Nearing retirement or retired
At the same time, identify which clients are less enjoyable to work with and/or less profitable, then identify characteristics of those clients. Some of those might be:
Micro-manager
Unwilling to follow your advice
Disengaged
Identify common objections: Consider any objections your ideal clients may have and how you can address them. This can help you overcome any obstacles that may prevent them from becoming clients. Common objections could include:
“I already have an advisor or accountant.”
“I’m doing fine managing things myself. I don’t need your help.”
“I don’t see the value in paying someone else to do it.”
“I don’t want to disclose my wealth.”
Use your ideal client framework to create a targeted marketing plan designed to attract and retain your ideal clients. This may include tactics such as targeted advertising, social media marketing, content marketing, and networking events.
Example: Understanding Who We Can Help the Most
At Crystal Marketing Solutions, we practice what we preach. Below is an excerpt from our own ideal client checklist that helps us identify if a potential client is a good fit for us.
At a Minimum:
Are fee-only, fee-based, or hybrid Registered Investment Advisors
Work primarily with individual clients
Have up to $2 million in revenue
Have been in business for at least a year
Seeking Marketing Strategy and Support:
Seek customized marketing strategies and assistance in implementing those strategies
Are prepared to invest a few hours every month in their marketing, but prefer an experienced marketing professional to take charge.
Want to spend time on the things that matter most to them; time with clients, family, or hobbies.
Value the knowledge and expertise of other professionals who can help them meet their goals
Have Qualities/Traits Like Us:
Family-oriented
Delegator
Trustworthy
Effective and efficient communicators
Seeks professional development
We are in the business to help, so if it ends up they are not a good fit we do try our best to refer them to a vendor that may be a better suited to them.
Identifying and attracting your ideal clients is an important step in the success and growth of any financial advisory firm. It can help you create positive and mutually beneficial relationships and contribute to your long-term success. By following these tips, you can develop a clear and detailed understanding of your ideal clients and create a target-making plan that will help you attract and retain them.
Need help narrowing down your ideal client? The Marketing Roadmap is a six to eight-week process where we’ll review your marketing and provide clear and actionable takeaways for improving your efforts. We can help you narrow down your ideal client allowing you to walk away with the confidence to generate results from your marketing. You can learn more about it here.
