Client Service

Optimizing coverage ratios

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Key takeaways
Limit relationships

Senior financial professionals across industry practices manage 161 client relationships on average.¹

Rely on support

Practices average three wealth managers, supported by three specialists and administrative staff.²

Focus on client service

Wealth managers in UHNW practices don’t typically exceed 50 clients.¹

Serving a select number of clients potentially deepens engagement strategies, improves business efficiencies, and promotes opportunities for growth.

Client-facing activities typically consume most of a practice’s time. As such, it's our view that a manageable number of client relationships per financial professional ensures that teams stay focused on their target market. We believe client-to-financial professional coverage ratios do – and should – fluctuate based on key attributes, including core market focus, staffing, specific niches, and service models.

Practices across the entire industry serve 161 clients per senior financial professional on average. Wirehouse and independent RIA practices that advise UHNW families often keep this ratio closer to 50:1. Low rates are also seen among smaller teams and solo practitioners that don’t have enough scale to serve more investors without compromising service quality or straining employee bandwidth.1 Client segmentation, streamlined digital workflows, and a team-based approach to relationship management can, in our view, help financial professionals achieve lower client-coverage ratios.

Here's what Cerulli Associates' survey of practice management professionals revealed about client coverage among practice team members.

Sources: The Cerulli Report—U.S. Advisor Metrics 2021, Cerulli Associates, in partnership with the Investments & Wealth Institute and the Financial Planning Association® (FPA®). Analyst Note: Clients per senior advisor also includes principals/owners. Clients per producer then includes producing junior advisors. Clients per professional includes all producers plus service/support advisors, financial planning specialists/paraplanners, investment personnel, and other professionals. Total headcount includes all staff

Understandably, HNW and UHNW-oriented practices are most likely, as we have seen, to have well-defined client segmentations and lower client-to-professional ratios due to the complex needs and resource demands of their client base. These practices tend to be adequately staffed with dedicated specialists and junior producing professionals.

High AUM doesn’t always require upmarket positioning, but 40% of teams with AUM above $500 million (i.e., mega-teams) focus on clients with investable assets above $5 million. Over half of these mega-teams have a staff of at least 10 people, including three senior and one producing junior financial professional, and a dedicated financial planner. The average across the industry is 14%.1

In our experience, specialists with clear responsibilities enable a business model that spreads client needs across several team members. The practice won’t necessarily take on more clients. Instead, we believe the team structure empowers deeper relationships among a limited number of families, which enhances each client experience. We have seen that selective and effective use of technology (e.g., CRM, account aggregation, planning software) may also help increase productivity and wallet share.

While client-to-professional ratios are always relative, all practices should, in our view, not diminish client outcomes or exceed staff capacity. To strike this balance, teams can establish formal client segmentations that factor in the complexities and needs of individual clients.

Junior financial professionals can take the lead on certain clients as senior professionals narrow their focus. Segmentation adjustments, when framed appropriately, offer a chance to renew client relationships and reduce attrition. Next-generation talent gains hands-on opportunities for professional development, while clients enjoy attention, services, and even fee structures that better suit their needs. We have seen that this process, if executed correctly, may free up all staff members to better direct their energy and expertise. Greater productivity and growth opportunities may, in turn, improve profit margins, retention rates, and referrals.

According to Cerulli Associates,1  most practices that limit their client relationships report a better ability to focus on the clients they most enjoy working with. This potentially raises profitability, boosts productivity, strengthens team morale, and reinforces client touchpoints. Improving these factors may help drive growth.

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