[IMGCAP(1)]Deciding which clients or prospects to engage with for financial planning services is a voluntary action on your part, not an obligation imposed on you by society, your advertising or a client. Many professionals are conditioned to believe that more is better, and that anyone who can fog a mirror qualifies to be a client of the firm.

When I was practicing as a CPA, there were days when I left the office wondering why anyone would ever want to go back tomorrow and do it again. Those days seemed to drag on forever, and there were times when I didn’t feel good about myself or my chosen career path. Then there were days when I’d look at the clock and be amazed that it was already 6 o’clock, and wondered if I should stop what I was doing until tomorrow or perhaps take it home to finish up after dinner.

What wasn’t clear to me at that time was that there were very specific reasons why some days flew and others dragged. More often than not, the quality of my day had to do with the clients I interacted with and the type of work that was consuming me on those given days. When the clients were too small or not fun to be with, work stunk. But when my day was filled with one or more ideal clients working on challenges that were interesting, the day was nirvana.

We in public accounting are trained and conditioned to believe that more is better. Whether it was more hours, higher rates or more clients, many CPAs believe that more is the key to success. I now know that the key to success is more about doing what you love with the right clients, rather than more hours and more clients.



Discovering whether a prospective client is right for you is a combination of art and science, and involves qualitative and quantitative criteria. These criteria aren’t a secret and don’t need to be hidden. It’s just that many CPAs give little effort to discovering what criteria are important to them personally and the firm. Having a minimum fee or raising the fee for difficult clients and hoping they soon leave is not an effective way of managing your client base.

To know whether a prospect is a good client for your firm, you must first understand your client base. Most CPAs know that stratification of the client base is necessary for any well-run business, especially a professional services organization — yet very few can show the stratification of their client base when I ask to see it. For example, if your firm decides that it will only deliver a comprehensive financial planning service, you should be aware that it will take at least 20 to 30 hours to complete that engagement. Therefore, only clients who can easily afford that cost are the ones with whom you should engage.

Before ranking your clients from a quantitative and qualitative perspective, look at your client base for trends that involve lifestyle or enterprise consistency. If you notice that there are a lot of baseball fans or plumbers among your client base, perhaps that particular niche is worth exploring. Many firms have done this for traditional accounting and auditing services, but fewer have implemented a niche plan for core accounting or financial planning services. Deepening your exposure or expertise in a particular niche may have long-term benefits as you become known as the expert in that particular area. By now, you may be asking what good developing a lifestyle niche is to your business. If you hold events or like to socialize with your clients, that lifestyle niche can become an important part of the relationship-building process. Witness the common golf-business connection enjoyed by so many.



When beginning the stratification part, consider stratifying clients in three or four levels. Commonly, a school-like system using grades from A through D is adequate. Some practice management consultants will tell you that you only need to define your ideal A+ clients and disregard the rest, but that is not reality for the firm just embarking on this path of defining and attracting more ideal clients. We’ll talk more about this later.

For a starting point, consider the top 10 to 25 percent of your clients today as the firm’s A clients. The definition of an A client needs to begin with your current client base reality — and not your dreamy vision of your future ideal client. The balance of your clients will be ranked from B through D, where each level should occupy approximately 25 percent, unless a detailed analysis of your practice leads to a more natural break point that helps define your current stratification.

This stratification should be based on both the quantitative and qualitative criteria that are important to you. Some of the more common quantitative criteria include:

  • Gross accounting fees paid to the firm;
  • Realization rate per hour worked;
  • Years that a client has been in business;
  • Longevity as a client;
  • Whether or not the prospect has ever sued a professional services firm;
  • Number of employees (for business clients);
  • Quality of accounting staff;
  • Net worth;
  • Gross income;
  • Interest and dividend income;
  • Gross sales of the client company;
  • Tax bracket; and,
  • Whether the client has employee benefit plans.

This list, obviously, can become quite long. Customize this list to the quantitative criteria that are significant and important to your firm, and then rate each client in each of the important quantitative criteria. These matters should be considered on the facts and circumstances as they currently exist, and not as they may grow to be.

  • Qualitative criteria are just as important as the quantitative criteria. Some of the more important qualitative criteria include:
  • Paying your firm’s bill on time and without complaining or negotiating;
  • Willing to refer you to other ideal clients;
  • Fun to spend time with;
  • Clients who appreciate your work and look to you for more guidance;
  • Clients willing to hire you for more than just telling them what happened last year; and,
  • Clients who share some passions such as golf, music, food or family.

And like the quantitative criteria, please include any other qualitative criteria that may be relevant and important for your firm.
Both the quantitative and qualitative criteria can and should include any niche specialties that your firm has successfully carved out already, such as multi-state issues, international issues, industry specializations, location, or special education or CPE requirements needed.

So far, this sounds like a lot of work, and it is. Working on your business for identifying your ideal client may not be billable time, but it can save a lot of guessing and false starts later. The information discovered from this process becomes the baseline that is necessary for you and whoever else in the firm is responsible for business development — especially when it comes to delivering a better experience for your clients. Whether you are creating a vibrant wealth management practice alongside your CPA practice or working side by side with another professional wealth management firm — clients appreciate working with professionals who understand their personal and professional needs.



Once you have the criteria established, and have ranked every client, you are in a position to use this information to benefit your life and your business. First, make a decision regarding how high a new client must score to make it through your new client acquisition process. If you decide that the firm will accept all levels of new clients, you may be asking for trouble. Ask yourself what significant opportunities are provided by new D clients? If you think that you have a good answer, ask the question of your staff.

Unfortunately, adding new D clients becomes counter-productive if the partners and employees want to enjoy every day and grow their business. In fact, one very liberating way to prove to your staff that you’ll not be accepting new D clients is to terminate service with your more difficult existing D clients and refer (or sell) these smaller or difficult clients to a firm in which they may be A clients. I am shocked at just how many firms fight me on this, thinking that the tiny margins generated from such clients are worth the aggravation.

At the same time, if we were to poll your A clients, asking if they’d appreciate more time with you, the answer is typically an overwhelming yes. Don’t waste time here — find an appropriate solution for your Cs and Ds, and spend more time with your A clients.

Profiling new clients is critical. Clients who need and want what you have to offer are more likely to be satisfied clients. When it comes to the wealth management side of your practice, a small client may take as much time as a larger client with far less revenue and opportunity — losses that you cannot make up with volume. In fact, it seems that client dissatisfaction happens more frequently with smaller D clients than those who better fit your profile.



Don’t be shy when meeting new prospects. A big part of their enjoyment in working with your firm will be based on how well they fit your ideal client profile. Ask the questions that you need to ask in the first interview to see if they share your views and fit your profile. It makes the first meeting experience more of a mutual interview than a “sales” meeting. You may be surprised how liberating it can be to turn down new business because it doesn’t meet the criteria for clients that your firm can profitably serve. Of course, be professional about not engaging with them and have a few names of other practitioners who may be able to help them.

The most successful firms are those that have drawn a clear line in the sand about what new clients will look like. It sounds a lot harder to implement than it actually is, which is why most practitioners fail miserably at living by the line-in-the-sand rule. They continue to accept any and all comers whose payment for services will clear the bank.

Setting higher standards for new clients will not change your firm overnight. In fact, the first year may seem a little painful. If your typical year yields 20 new clients ranging from A to D, under the line-in-the-sand theory, you may only net one or two A clients and one or two Bs in the first year of these new tougher standards. But if you do it consistently, by the end of the third year, your new client flows will be back up to the old levels of 20 or more — except they’ll all be A and B clients.

When you get to this point your days will be happier. Only working for great people who fit your firm’s stringent quantitative and qualitative criteria for ideal clients starts and ends with you — and that’s a voluntary decision.

John P. Napolitano CFP, CPA, is CEO of U. S. Wealth Management in Braintree, Mass. Reach him through JohnPNapolitano on LinkedIn or (781) 884-2390.

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