% of AUM in Top 5 Relationship

For Advisors, the top five relationships comprise, on average, 20% of revenue. This means that if you were to lose one or two of those Clients, for whatever reason, you would lose a significant portion of your revenue. That’s just way too risky. As such, those top five relationships should only represent 10% (or less) of your revenue.

Yes, Clients that invest a lot of their personal wealth with you are attractive and highly desired. But you need to balance out those higher net worth amounts across your entire Client base. It’s smart to set a minimum investable amount for the Clients you’ll take on. If you don’t already do this, start by looking at your top 10 relationships. If they’re all around $2m, you’ll probably want to set your minimum at $750,000 or $1m. Ideally, you want to close the gap between your biggest and smallest Clients. Once you’ve set the minimum, stick to your guns (except in special situations, i.e., next gen, family accounts, etc.). If you have a significant number of Clients that fall below the threshold, start shedding those accounts or explain your AUM policy and ask if they have additional assets they’d like to invest with you.