Financial advisors work with clients to develop a strategy for achieving their financial goals. But just how many clients does a financial advisor have? The answer can depend on the type of clients they work with. An advisor who caters to high-net-worth individuals, for instance, may need fewer clients to satisfy their revenue goals compared to an advisor who works with middle-class investors. The number of clients you should have can depend on your niche and overall goals.
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Understanding the Advisor-Client Ratio
The advisor-client ratio measures the number of clients a single advisor works with at any given time. Finding the right ratio matters, as it can affect your revenues and the quality of service you provide. An advisor-client ratio that’s too low and may leave you falling short of your goals. A ratio that’s too high, on the other hand, could lead to dissatisfied clients if you’re not able to adequately meet all of their needs.
What is a good advisor-client ratio? It depends on who you ask but a typical answer is anywhere from 50 to 150 clients per advisor. Having 50 clients could be enough if you’re focusing on high-net-worth individuals. Meanwhile, 150 clients are usually considered to be the upper limit of what an advisor can realistically manage.
How Many Clients Does a Financial Advisor Have?
The number of clients a financial advisor has depends largely on the advisor. Again, a typical client count is anywhere from 50 to 150 but there are several variables that can influence the actual number. They include the advisor’s niche and the type of clients they serve, as well as how they work.
For example, an advisor who’s employed by a large wealth management firm may have more clients out of necessity. A firm that serves thousands of clients and has assets under management in the billions or even trillions may expect its advisors to serve a larger number of clients.
An advisor who owns a small boutique firm that they run with just one or two other advisors, on the other hand, may have a much smaller client list. That’s not necessarily a disadvantage, however, if those clients are wealthy and bring a significant amount of assets to the table.
Meanwhile, the size and structure of an advisory firm can also impact how many clients an advisor can take on. Those with support staff, like paraplanners, administrative assistants, and junior advisors, will likely be able to manage a higher number of clients. Delegating tasks and leveraging expertise of different team members allows senior advisors to focus on high-value activities, improving efficiency and client service.
How Many Clients Does a Financial Advisor Need to Be Successful?
The number of clients an advisor needs to be successful is influenced by their goals and the type of clients they target. An advisor who works exclusively with individuals who have $10 million or more in investable assets will need to have fewer clients than an advisor who serves clients with $100,000 or less in assets.
It’s important to remember that how you measure success can also influence the number of clients you need to have. For many advisors, success is measured in annual revenue and overall growth. If, for example, you aim to generate $1 million in revenue per year, there are two ways you might go about reaching that goal.
First, you can narrow your scope to focus on individuals with a higher net worth who have more assets. The advantage of doing so is that you may need a lower number of clients in total to reach your goal, depending on the amount of assets you’re managing. The drawback is that competition for wealthy and ultra-wealthy clients can be fierce and it may take some time to build up your client base.
The other option is to work with a greater number of clients in order to increase your revenues based on volume. It may be easier to find clients if you’re casting the net wider, but it’s important to consider how many people you can reasonably serve. Taking on too many clients could cause your retention rates to suffer if clients leave because they feel overlooked or unappreciated.
How to Succeed as a Financial Advisor
Knowing how many clients a financial advisor typically has is useful, but it’s important to remember that a number alone doesn’t dictate your success. An advisor with fewer clients can be more successful than an advisor with a lot of clients if they’re approaching their business the right way. Here are a few tips for finding success as an advisor, regardless of how many clients you have.
- Know your niche: Your niche is simply whom you serve as an advisor. For example, you might choose to work with near-retirees in their fifties or thirty-something couples with no kids. One of the keys to success when niching down is knowing exactly what clients need and how you can meet those needs.
- Set clear goals:Setting goals as a financial advisor can impact your success if they’re realistic and you’re committed to following through on them. When setting goals, it’s helpful to take the S.M.A.R.T. approach. S.M.A.R.T. goals are specific, measurable, achievable, relevant and time-bound.
- Manage time wisely:Good time management skills are essential for success as an advisor. Ideally, you’re devoting the bulk of your time to meeting your clients’ needs or connecting with new clients, versus focusing on the more tedious tasks that go along with running a business. Outsourcing or using an online lead generation tool can help you save time so that you can focus your energy on more important tasks.
- Create a marketing plan:Good marketing is essential for attracting new clients and increasing your brand visibility. A comprehensive marketing plan for a financial advisor can include email marketing, social media marketing and digital content creation. Understanding your ideal client profile and where they spend time online can help you develop an effective marketing strategy.
- Continue your education: There is a plethora of professional certifications that financial advisors can pursue to deepen their knowledge in specific areas and provide more specialized services to their clients. The Certified Financial Planner™ credential, for instance, is considered by many to be the gold standard of financial planning certifications. According to the 2023 Kitces Report, “How Financial Planners Actually Do Financial Planning,” the CFP® certification alone “correlates with an additional $100,000 in revenue per advisor.”
- Network:Networking can be a great opportunity to make connections with other advisors and establish professional relationships. If you’re a new advisor, for instance, networking could help you find a mentor who’s willing to offer advice and guidance. Networking can also help you establish yourself in your local community if you’re participating in events that your target clients are likely to attend.
Bottom Line
How many clients does a financial advisor have? There’s no single answer, as every advisor’s objectives and goals are different. The better question to consider is how many clients you need to be successful. Whether you’re looking for your first client or your next one, it’s important to stay focused on where you want to go and what you’ll need to do to get there.
Tips for Growing Your Client List
- SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
- Step up your referral game. If you have an existing base of happy clients, it’s not unreasonable to ask them for referrals. You can let them know that if they have any friends, family members or colleagues who are looking for an advisor you’d be happy to meet with them. If asking for referrals from clients seems too awkward, you can generate them indirectly by delivering top-tier services to your clients. Not only can that lead to more referrals, but it could also help to increase your client retention rates.
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