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Can I Have More Than 50 clients in my Focus 50?

Morgan Ranstrom's avatar
Morgan Ranstrom
Jan 26, 2023
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I regularly receive thoughtful and engaging questions from subscribers. Today’s question doesn’t come from a specific advisor, but it’s a question I hear often.

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Question:

Does my Focus 50 have to be 50 clients?  

One of the questions I often receive is some variant of the following: Does it have to be 50 clients?

I am not an absolutist. It does not have to be 50 exactly, and I think of the Focus 50 as an optimal range. Yet, the further your client load varies from 50 clients, the more tradeoffs you have to make.

For example, targeting 30 clients necessitates a higher average fee per client. You also have more risk tied up in each client. Both can present challenges. Similarly, exceeding 65 clients necessitates more significant support and personal time commitment. You and your staff (whether part-time, outsourced, or full-time) will put in more hours working in and on the business.

Here's a common scenario I see:

Let's take the case of an experienced lead advisor who is a CFP and has started her own business. Let’s call her Tina.

If Tina works for a large RIA, her salary would likely be between $150,000-$250,000 plus benefits1. A salaried position also comes with a great deal less risk, and, in many cases, you are just serving existing clients, not prospecting or marketing.

To justify starting her own firm, Tina must overcome several items:

  • Time Investment

  • Monetary Investment

  • Lost wages

  • Lack of benefits

  • Not saving in her 401k for at least 1-2 years

  • No employer match

  • Significantly higher risk to her personal balance sheet

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