Other Citywire websites

Citywire printed articles sponsored by:

View the video online at http://citywire.co.uk/new-model-adviser/video/a635192

Paul Etheridge: let go of unprofitable clients

Sponsored By:

by William Robins on Jan 02, 2013 at 15:31

Paul Etheridge: let go of unprofitable clients

Paul Etheridge, chief executive of Prestwood Financial Planning and founding member of the Institute of Financial Planning, explains how to segment your clients to achieve a profitable business.

In this interview Etheridge urges advisers to let go of unprofitable clients, warning they can become 'time bombs'.

8 comments so far. Why not have your say?

Sam Gee

Jan 03, 2013 at 13:21

All very well if you treat your clients "worth" based solely on fees. Some of my clients really don't justify the service, but how can I say to a long-standing client who is a widowed elderly lady bringing me in £100 per year that she's not worth my while? I'd rather service at a loss because I care about them as people.

I have a handful of clients like that, and would be horrified to ever have that sort of conversation with them. But of course there are one or two that I would love to get rid of!

report this

Perry Chapman

Jan 03, 2013 at 14:03

Sam, very commendable sentiment in caring for your longstanding clients.

report this


Jan 03, 2013 at 14:21

And, of course, you may give them certain advice on specific issues -- thus, there does exist free advice in our business. I have been giving free advice for as long as I can remember. Now, it seems someone wants me to put a value on that -- sorry, compliance, but the value is in the spirit of the mind.

report this

Mike WOI

Jan 03, 2013 at 16:08

And I have been under the illusion that this was a service industry, back in the late 80s and 90s the mighty Pru were grading their clients bronze/silver and gold, that the bronze basically recieved none or very little service, now they are employing a field force again to cater for the clients left behind, what goes around comes around

report this

Eddie Royce

Jan 03, 2013 at 21:25

Dont believe the video lived up to it's billing, the email suggested that Paul would explain why it pays to let go of unprofitable clients and further the description above suggested that he would explain How to segment clients to achieve a profitable business.

The answer was to let go of unprofitable clients so you have time for the profitable ones, Oh apart from the ones that have rich parents, and those you can keep giving free advice to because one day they will inherit the riches.

So it is Ok for wealthy parents to subsidise time spent on their kids but not subsidise lower profit clients that have been loyal for 15 years or more.

Will you dont seem to understand that many sole traders only exist today because of those clients that have now for what ever reason become unprofitable, and if that was you, you wouldn't just chuck them away.

The key would be to find a way of helping the adviser population to understand, How advisers can improve profit from the lower segments and actually deliver a video with some real content for a change.

I do beleive that Paul's concept of one service and one segment is spot one, far better than Gold, Silver Bronze, but we need better content than this.

Regards Eddie

report this

Sam Caunt

Jan 07, 2013 at 10:54

We had an “unprofitable” client but we did not let him go since we believe we have a responsibility for the advice we give. Out of the blue the client phoned to say that he wanted a review and in the ensuing telephone conversation we found out that his wife had a small tumour which had been successfully treated. Nothing serious but nevertheless we advised that he should submit a claim on the critical illness plan we recommended several years ago, something he had not considered given the triviality of the condition. The claim was upheld and the delighted client received a six figure sum. The point is that this would not have happened had it not been for our advice and the fact that we kept in contact.

An unintended consequence of the RDR and vastly underestimated in terms of consumer detriment, was the loss of reactive advice. As far as our client is concerned it was a good job we did not ditch them.

report this

Sam Gee

Jan 07, 2013 at 11:16

Hi Sam, this is a perfect analogy as to why we shouldn't just disregard these types of client. And really as I said previously it's not all about our fee. Imagine the good you have done for them, and probably the direct/indirect good that it may do for you, and even if there was nothing in it for you, a delighted client is worth quite a lot itself.

report this


Jan 08, 2013 at 16:08

We have adopted a similar style to PE; one service wealth management plan which I suspect is what many others have. We call it a wealth management programme and is geared towards a lifetime journey so the three stages we have identified are:

Wealth Accumulation (those starting on their financial journey with little invested - less than £75k)

Wealth Consolidation and

Wealth Preservation.(those with lots of wealth and are more interested in generational planning)

The bandings of the last two will vary from firm to firm but it is far easier to segment this way than any other i have come across.

All managed via open architecture platform(s)

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

More about this article:



Adviser KnowHow: How to pick funds for auto-enrolment

by Rosie Sells on Aug 01, 2014 at 11:46

Sorry, this link is not
quite ready yet