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Understanding Your "Threshold Client" Versus Your "Ideal Client"

By David RichmanManaging Director, Advisor Institute

Advisory teams need to be thoughtful about the set of wealth, demographic and psychographic attributes that characterize "threshold clients" who you will serve versus "ideal clients" who you're seeking to serve.

Consider a recent consult where I asked a team lead, "What does your ideal client look like?" This was the profile:

  • Assets $1 to $10 million
  • Age 40-70
  • Corporate executives (mid-level and c-suite) and business owners
  • Family oriented
  • Nice people
  • Open to advice

Do these criteria bring enough specificity to be of value from a strategic, positioning and marketing perspective? We think not. They signal a desire to maintain a very wide net. The more you attempt to position yourself to a wide array of clients, the less you're perceived as bringing unique value to any of them.

Imagine if the team separated their notion of ideal clients from threshold clients to fine tune the set of wealth, demographic and psychographic attributes to:

  • Assets $10 million plus
  • Age 60-70
  • Closely held business owners
  • Multi-generational family wealth
  • Philanthropic
  • Full balance sheet delegators

The team can start to make some critical decisions now. For example, they could choose to narrow strategic planning, positioning and marketing to showcase a laser focus on their ideal clients. Whether internally understood or externally communicated, they can also position themselves as being open to a specific category of client. For example, emerging wealth clients. This would then specify the threshold attributes of clients they're willing to serve.

Bottom Line: Be intentional with your profile of an ideal client versus a threshold client and capitalize on significant benefits, such as optimized marketing and strategic decision making.