As advice practices ponder of the viability of C and D clients, a pair of advisers has found that technological efficiencies are helping drive down costs to keep make them profitable to serve.

Australian Financial Advisory Group director James Gerrard says advisers should consider their options before turning off fees on C and D clients.

“With technology [there are] more ways, still in a compliant manner, to not only service but to make a profit from those clients and keep them,” Gerrard tells Professional Planner. “They can turn into bigger clients at a later stage.”

In Gerrard’s case, his firm is one of many utilising artificial intelligence (AI), in this instance using the service provided by adviser software firm Dash to develop the advice documentation, leaving the advisers to focus on the strategy.

“When I say AI, it’s digitising the advisers and the first thing we did was do that more with the client SOA process, so we’ve digitised myself and two other advisers; a paraplanner can type in a script or use template scripts that we have that we generate videos that we drop into Statement of Advice documents,” Gerrard says.

“These Statement of Advice documents are not your usual 100-page word documents, they’re visual web-based advice [documents].”

Lee Clarke and Company managing director Lee Clarke says his firm never sought to take on C and D clients but acquired several businesses which had them on their books.

Not wanting to abandon and offload them, Clarke says relying on similar digital efficiencies has helped make those clients financially feasible.

“It’s starting to work out to be phenomenal in managing these clients that have been, typically to a lot of planners, worthless,” Clarke says.

“I’m not going out looking to try and grow that sort of book of business. I am now running it separately. However, I can see it’s a gamechanger in terms of [retaining and servicing] these smaller low-balance clients.”

Despite C and D clients not being the type Clarke’s business would target, he felt an obligation to serve them in some capacity.

“We have a business that I’d like to say is a true high-net-worth business; however, you can’t avoid having these smaller balances and typically advisers have been treating them as worthless and either giving them away or turning off their fees,” Clarke says.

New age of information

Gerrard says by giving the client videos to watch before the meeting, what would have been a one-hour meeting can be completed in five minutes.