A Blog for Today’s Top Financial Advisors

4 Ways to Let Go of Nonideal Clients – Episode 14

It may be time to release clients who no longer suit your business

Key Takeaways:

  • You most likely have clients who aren’t ideal for your business and need to be released.
  • Letting go of inappropriate clients will free up much-needed time and energy and improve your financial results.
  • Selling these clients to outside financial advisors is typically the smartest strategy.

The next time you sit at your desk, pull up your client list. Give it a good look and ask yourself:

“Should I really be working with everyone on this list?”

If you’re being honest with yourself, you will have to admit that there probably are at least a few clients—and maybe a lot—who simply aren’t right for you and your practice.

These clients will probably stand out. They are the ones who take up a lot of your time but don’t generate commensurate profits. They are the ones to whom you can’t provide truly high-level value or who don’t take your advice—unlike clients who match your ideal client profile. And they may be ones with whom you simply don’t enjoy working and who drag down your team’s energy and productivity.

I’ve got good news for you: It’s time to release those clients for new opportunities. It’s better for them—and it’s better for you. Here’s how to do it.


Letting go of existing clients can be a scary proposition, so it’s helpful to remind yourself of the advantages you will enjoy by no longer working with your less-than-ideal clients. For example:

  • You will free up a tremendous amount of productive time so that you can focus on your existing ideal clients as well as on building your business to attract additional ideal clients.
  • It will improve your self-image dramatically. When you work with only top clients for whom you can add substantial value, you’ll feel energized, inspired and free—perhaps for the first time in a long while.
  • Focusing your practice on select clients sends a strong message to your top existing ideal clients that you are devoted to serving them and their needs.

Think of it as a case of “less is more.” If you boil down your business to only those clients who are ideal for your expertise and offering, you can build an amazing business with a relatively small client base.

Indeed, when we segmented 2,094 advisors by income and size of client base, we discovered that the top-earning advisors served fewer than 150 clients—and many of the “best of the best” served only a handful of ideal clients.


When it comes time to disengage from nonideal clients, there are four typical options to consider and assess:

1. “Quiet file” the clients. Many financial advisors create a “quiet file” of clients they would like to stop working with. The financial advisors stop doing any proactive work with these clients in the hope that the clients will no longer contact them but that their recurring revenue trail will continue. Trouble is, this approach usually backfires because these clients often continue to demand time and energy disproportionate to the business they offer.

2. Hire another financial advisor to serve the clients. This is another route commonly taken by financial advisors. However, like the first option, it does not address the fundamental problem. Advisors often hire a junior financial advisor for tens of thousands of dollars in salary, whom they then must train and supervise. This not only costs the advisors money but also consumes a fair amount of time, which costs them even more money—all to service clients who were not profitable to begin with.

3. Transfer the clients to a financial advisor in your office. If you own your firm and already have this person on staff, this option is not fundamentally different from hiring a new advisor. If you’re an employee of a firm, however, it might make sense to transfer these clients to another financial advisor within the company. Compensation for this transfer is sometimes accomplished using a revenue-sharing code with another advisor.

4. Sell the clients. This final option is the best approach in almost all instances. By selling all your nonideal clients to a financial advisor outside your practice, you will have complete closure and the opportunity to turn your full attention to your highly profitable ideal clients and prospects. If you’re an independent financial advisor, it will typically be relatively easy for you to package a portion of your client base and sell it to another independent financial advisor. If you’re an employee, your firm should have the flexibility to sell a portion of your client base internally. In effect, you would be selling a portion of your book of business and should receive either ongoing revenue or possibly upfront money.

The upshot: Focus your time and energy on the clients you can serve extremely well—and who will pay you well for doing so—and learn to let go of the rest. Your ideal clients will thank you—and, chances are, so will your former clients!



To download a transcript of this episode, click here.

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