I was asked to comment about an article in today’s GatekeeperIQ (A Financial Times Service) about Ameriprise’s strategy to set-up call centers to broaden the firm’s mass market reach as well as to help advisors focus on their most profitable clients. I think it’s a great idea.
On the first point, despite its advertising, Ameriprise clearly tails others such as Schwab and Fidelity in name recognition. Therefore, if the goal is to proactively broaden this reach, then call centers are a good strategy to do so.
On the second point, many of us in the industry have advocated for a long time the theory that advisors can only serve a finite number of clients effectively. While this number varies by the size of the support staff, technology, etc., it holds for all advisors. The answer for many to limit the size of their businesses has been to set account and/or relationship minimum account sizes higher.
But what about existing clients? While we all know there are sometimes reasons for having smaller relationships – family or friends or future potential – the more successful advisors find ways to minimize this number. Therein lies, in my opinion, the great positive of what Ameriprise is doing. As an advisor, saying that you are going to “fire” clients is an easy thing to say – but actually doing so is a lot harder.
To quote from the article: “For advisors, it provides a graceful option to offer to smaller, less profitable clients. But to “fire” those clients “is probably harder psychologically to do without having a place to send them,” says Andy Klausner, founder of AK Advisory Partners, a consulting firm. “In this case, Ameriprise is offering its advisors a way to leverage their businesses while having an almost-turnkey solution to recommend to these smaller clients.””
I would expect other firms to follow suit.
