When word hit that an Atlanta-based corporation was poised to offer early retirement to a thousand executives a few years back, Polstra & Dardaman found itself in the enviable position of being able to pick and choose the new clients it wanted to take on. The years that its three partners spent doing retirement seminars for executives there were about to pay off in spades. They were on the company's preferred planning firm list.

But instead of using instinct to screen potential clients, a favorite tool for even some seasoned planners, the firm's partners systematized their approach to deciding which clients to accept. "We knew that there were just too many prospects likely to call us. We couldn't take them all," Dardaman says. "We needed a system."

Called the "Client Fit Ratio" system by Dardaman, it has helped the firm grow from a five-person shop just five years ago to a staff of 13 that manages 135 family relationships and $300 million in assets. Today the typical client has $2 million to $3 million to invest, though a handful have less (usually the referrals of good clients) and some have significantly more.

The screening tool is winning kudos nationally. Deena Katz, who featured the system in her book Tools and Templates for Your Practice, says she picked Dardaman's system because it's designed to help planners do what they don't always do very well: Find a way to concentrate on their most fruitful client relationships.

"One of the failings we have as practitioners is that we don't always systematize our approaches," says Katz. "We tend to excuse that by saying that all our relationships are different. In fact, they're also very similar."

A good client selection tool involves creating a uniform approach to vetting prospective clients. Instead of spending valuable resources with difficult clients who might prefer to do their own investing or are going to be unhappy with just about anyone, a good system helps planners find the right clients and devote the bulk of their time and resources to them. "There are still investors with unrealistic expectations out there who think there is magic we just haven't discovered yet," Katz says. "If you can't manage someone's expectations, they're simply not going to be a good fit."

And it's a lot better to discover that before you've worked to create a relationship with a client, Dardaman says. Although deciding which clients with whom to work might be easy at the most obvious ends of the spectrum, there are many gray areas, especially when it comes to analyzing many at once, as Polstra & Dardaman had to when the Atlanta company started offering early retirement packages. With more than 50 prospects likely to pour in, sane growth required a uniform approach to selecting clients. The first step, Dardaman says, involved brainstorming about "the attributes our ideal clients have."

What the three partners (all are CPAs and CFP certificants) decided was that they wanted clients who are delegators, who understand and value the process of an ongoing planning relationship and are willing to pay for it. The fee-only firm's minimum annual assets-under-management charge starts at 1%, and clients must have about $1 million to qualify for service (the minimum was $2 million until about 12 months ago, when the market plummeted after the terrorist attacks of September 11).

From there the partners-Dardaman, David Polstra and Alan Gotthardt-divided their ideal target clients into four groups: 1) retiring corporate executives; 2) business owners; 3) those with sudden wealth (including widows and those who inherit money), and 4) athletes and entertainers. "The commonality of these clients is that they're going through or planning for a major life transition," Dardaman says. That means they're either retiring or selling a business, had a spouse or family member die and leave them an inheritance or, in the case of athletes and entertainers, are essentially planning for a second career. "Our ultimate core specialty is helping people plan for and work through these transitions," says Dardaman.

From the brainstorming, Dardaman's Client Fit Ratio System was born. The firm used it to screen and refer out more than 50% of the early-retiree prospect calls it got from the Atlanta-based corporation that was offering a restructuring package to 1,000 employees. Even then, Dardaman says, the planning firm wound up with a six-month backlog of new clients waiting for financial and investment plans.

In addition to building assets and the number of desirable clients, the client fit system gives staff at the firm a tool to qualify prospects. "We're to the point now where staff can do a good job qualifying folks over the phone. The biggest take-away from all of this is not so much the system, but the fact that it keeps us all on the same page," Dardaman says.

Although the system he created is service-marked, Dardaman doesn't plan to package or sell it and encourages other planners to use what is beneficial to them-provided they customize it to reflect their own strengths and strategies. Mike Fitzhugh, a partner with Kochis Fitz Tracy Fitzhugh & Gott in San Francisco, heard Dardaman talk about his Client Fit Ratio at an FPA conference and took him up on his offer. "In our business you tend to jump into relationships quickly. But after a number of years, we began to think in a more focused way about what sort of prospects might work best for us."

The firm was looking for a systematic approach, and when Fitzhugh heard about Dardaman's, he says he had all he could do not to jump out of his seat and shout, "Eureka!"

Kochis Fitz has modified the system to its strengths-it has a $3 million minimum, a $6,000 minimum annual planning fee and an asset-based fee, and likes to work with very high-end business executives. Fitzhugh says firm members use it to ensure that they are not just dazzled by the apparently wealthy or dissuaded by someone who seems marginal. "We've developed a new segment called 'strategic,' which allows us to give points for how strategic a prospective relationship might be to us." Clients who come with novel or new problems, are highly recommended by existing clients or may lead to a new base of desirable clients all get strategic points.

The system can also help advisors avoid prospective clients who may be very likable but who have all their wealth tied up in start-up stock options, plan to keep most of their wealth elsewhere or live hundreds of miles away. "We use the process to decide how much resources to allocate in pursuing prospects," Fitzhugh says. "Are we going to pour time and money into following this client home or decide that if they call back, fine, but if not, no big deal."

While the joke is that younger or less seasoned planners may take clients who can fog a mirror and have a few bucks to invest, it benefits all advisors to think about what type of clients they want to cultivate over the long haul. "We've been in business a long time, and we want to lead the relationship for our clients' children and their children," says Fitzhugh. "Chris' system really benefited us as we decided we wanted fewer and wealthier clients so we all don't have to work 18-hour days."

In fact, strategic growth makes screening clients not only beneficial, but necessary. The days of trying to corner any market are coming to a close in many industries, planning included. "If you do everything for everyone, you won't be much good for anyone. But if you define what you do very well, you'll be able to zero in on clients you enjoy who will benefit from what you do," Dardaman says.