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One of the key attractions of owning a financial advice business has always been the benefit of generating recurring revenue from long-term clients. While the removal of grandfathered commissions and introduction of mandatory renewals has removed the ‘guarantee’ of recurring revenue from every client, we know that great advice propositions still result in long-term clients. Longevity, or sustainability planning, has now become increasingly important to advice firms, so they can ensure their long-term success. The longevity of your client relationships will impact your future cash flows, as well as the asset value of your business.

Two critical factors come in to play:

  1. Looking at the demographics of the current client base (and the recent new additions) to predict future needs and resignations AND
  2. Continually improving the service offering that’s provided to clients, to heighten the value of retaining your services

It’s well understood that the cost to maintain an existing client is far less than that to obtain a brand new client; according to Harvard Business Review, “the cost of acquiring new customers is at least 5 times more expensive than keeping existing ones”[1]. So it makes good business sense to retain the clients that you already have and to ensure that they are paying you a profitable fee – preferably on an ongoing basis.

When it comes to financial advice, it’s not unusual that the full value of the advice relationship is something that is cumulative; it builds over time – so the longer you are able to continue to provide great advice to clients throughout their life, the better outcomes you help them to achieve and the more valuable the relationship (to both you and your client).


Typically, in advice there are three ways that you will lose clients and/or recurring income:

  1. You are servicing clients with only transactional needs who won’t get value from your ongoing advice proposition, or like many businesses, your ageing (or legacy) client base contains many clients who will no longer get value from paying you an annual fee to meet your current costs of doing business. Whilst transactional advice might be a viable business strategy for a sub-section of your client base, having too many on this basis means that you are missing a great opportunity in selecting the right style of clients and the value proposition to augment your recurring income.
  2. Your clients choose to leave or terminate their advice relationship, either because the quality of your advice and service is substandard, or as a result of your advice and relationship being only at surface level, ie you haven’t built sufficient trust to deliver to their personal values and deep-seated desires, or you haven’t broadened your service offering to solve the evolving challenges that your clients face. Any of these things make for an easy decision for a client to terminate your relationship.
  3. Death. Whilst you can’t prevent the latter from occurring, you may be well placed to review your current client base to predict the likely lifespan of your ongoing relationships.


Are you crystal clear on the demographics of your current client base?

That is, do you know how many clients are in different categories so that you can adequately plan for their current and future advice needs, and the longevity of your business? You may have seen in our business analysis process that when we consider the clientele of your business, we suggest that you complete the following table to get visibility over your current client base.

Under 35 Wealth Builders
Pre-retirees (50-59) Retirees
(60 – 74)
Over 75
Number of client groups


If your client base is quite concentrated, you might look at more smaller age brackets. Note that the aim is not to have an even spread across all age brackets. Most firms (unless they have more than a handful of advisers) will be spreading themselves way too thin to leverage the benefits of developing deep expertise in selected client groups if they had 20% of clients in each of the above age groups.

Even at this simple level of categorisation, you can begin to do some longevity or sustainability planning of your client base. Understanding the current demographics of your client base will assist you to:

  • Predict future retention and plan for the future,
  • Plan for different service offerings,
  • Enhance existing service offerings,
  • Know which clients to target in your marketing


In the ‘olden days’ the banks typically called the plan to broaden the number of services you get from clients, share of wallet (for every extra service you provided, you’d increase your revenue and make it harder for them to leave). We’re a little less crass in small business, but the concept still works as a sustainable business practice that will indeed result in greater profits. It is generally motivated by the desire to deepen the value of your overall relationship with your clients and help them in additional areas of their life, which will in turn, build loyalty and profitability.

For clients that we coach, we will often take this tactic a step further and break down the analysis into more granular detail, separated out between the advisers in the business. Where the data is accessible, we also use the definitions of their client avatars, or targeted client groups, to gain more meaningful information to plan from. If you’re an Evolve Alliance member, click here to read the rest of this article, where we explore further, some of the insights to look for and benefit from with his exercise.

If you’ve collected the data on your clients but are not sure what to do with it, we can help!  If you would like to ensure you are making great strategic decisions about this (or other elements of your business) to ensure long term sustainability, an Elixir Business Coach can help you do just that. You can book your free initial Discovery chat with one of our consultants via this link.


[1] Harvard Business Review – ‘The Value of Keeping the Right Customers’, Gallo A