Issue No. 01Essay
The Book Gets Bigger While Capacity Gets Smaller
The hardest clients to let go are often the ones you feel you owe something to.
The person your mother referred when you were just getting started.
The couple who trusted you before you had much of a book.
The client who sent three friends your way twenty years ago.
They may be among the smallest relationships in the practice now. You may barely be the right advisor for them anymore.
But telling them that feels awful.
Not because the economics are complicated. They usually aren't.
Because the relationship is.
You built a practice one client at a time. Some of those early clients helped make the business possible. Then the business changed. Your minimums changed. Your team changed. The clients you serve best changed.
They didn't.
At some point, gratitude and good business begin pulling in different directions.
The client didn't become a bad client. The practice became a different business.
Nobody wants that call
If your mother made the introduction, there are two conversations, and the second one is worse.
You can explain service tiers to a client. You cannot explain service tiers to your mother, who will hear one thing: her son or daughter has done well and is now too busy for the people who helped.
That call is the reason nothing happens.
Not the analysis. The call.
The third option nobody names
So the decision gets deferred, and deferral feels like loyalty.
It isn't.
The relationship stays on the books. The annual review gets scheduled later each year, and shorter. Their calls go to someone else. You stop bringing ideas because few of them fit at that size.
You haven't let them go. You've stopped serving them.
All of the guilt, none of the benefit — and the client getting less every year.
I've done this. Not with a client — with an employee.
I had a head of operations I should have let go much earlier. When I finally did, I kept his wife on the team because firing them both felt cruel.
I thought I was softening the decision.
Instead, I preserved much of the environment I was trying to change. A few months later, I had to let her go too.
I took the pain twice because I couldn't bring myself to make the whole decision once.
That's what avoidance does. It lets us feel kinder in the moment while extending the problem for everyone involved.
Whatever you owe those early clients, it isn't that.
What it costs isn't revenue
The bottom of a book is rarely a revenue problem. Those relationships are roughly revenue-neutral — small, but not visibly costing anything.
Which is why nothing gets done about them.
They're a capacity problem, and capacity is the constraint on everything you're trying to build next.
A hypothetical, to make it concrete. Say a practice has four hundred households. The smallest 40% produce 8% of revenue and take up a third of the team's service time. Made-up numbers — but not, I suspect, unfamiliar ones.
Run your own. It takes an afternoon, and most advisors never have, because the moment you see the number you have to decide something.
That third of your team's time is the capacity you'd need for the next tier of client.
It's the capacity your G2 needs to become something other than a service associate.
It's why you're still doing work that shouldn't be yours.
The book grew. The business didn't.
What a buyer sees first
Two practices, both $2 million in revenue. One has 400 households. One has 120.
They are not worth the same.
A buyer prices revenue per relationship, how much depends on you specifically, and what it costs to serve the book at your standard. The 400-household version is worse on all three.
One is a business. The other is a job that pays well.
Four ways through, and only one is goodbye
Not a blanket minimum — those cut out exactly the people who send you referrals. Segment on revenue, hours consumed, and trajectory. A small client at 34 with equity comp is a different asset than one at 78 drawing down.
- Change the delivery model, not the relationship. Most early clients don't need ninety minutes a year with you. They need a lighter standard, delivered reliably, from someone whose full attention they actually get.
- Move them to your G2. More often the answer than any of the others. The client goes from your smallest relationship to someone's most important one. Your successor gets clients of their own. And you can say it to your mother without flinching, because it's true: I've handed them to someone I trained, and I'm still here.
- Raise minimums going forward. Fixes the next ten years and nothing about the current book. Necessary, insufficient, often mistaken for a decision.
- Refer them out. Right some of the time, used almost never. There are good advisors for whom a $200,000 household is a real relationship rather than a rounding error.
Being someone's fourth priority is not a favour
The client who calls three times about a statement is calling because the first call wasn't handled well.
They aren't being served. They're being retained.
The question isn't whether you can bring yourself to let someone go. Framed that way the answer is always no, and another year passes.
The question is whether you'd be willing to describe how you're serving them out loud — to them, or to whoever introduced you.
If not, that's your answer. And every option above is better than the one you're choosing by not choosing.
You can grow a book by adding.
You only scale a business by deciding.