These days, you might be hearing the term “human capital” fairly frequently. That’s a recognition of the contribution people make to a firm’s value. Most often, we hear it in terms of staff and the increasing competition for the best employees — what some call a race for human capital.

But the most successful RIA firms also pay close attention to the race for another form of human capital: the clients they serve. Just as you want to be certain that you employ the best people to handle the financial needs of your clients, you need to have the right type of human capital on the client side.

For many RIA firm owners, the “right” kind of client falls under the category of “any client.” Anyone with assets to manage is okay with them. Doesn’t matter how much of a portfolio is involved, the age of the individuals, their objectives and risk tolerance, or the way they treat the firm’s team.

If you’re going to grow your firm strategically, you need to encourage the right kind of growth. You’ve invested in one side of human capital — a team that represents the type of professionals that thinks and works the way you want. So rather than throw every kind of client at your team, why not put all more effort into securing the right kind of clients for them? Perhaps the way your firm is organized means that you’re only efficient when clients have at least a minimum portfolio size, say $300,000 or half a million. Or it may be that your average client is moving into the ranks of Social Security recipients, so you need to secure much younger folks who are more focused on growth than preservation. Maybe you’re not staffed efficiently to wrangle with dozens of small-asset-but-high-maintenance clients who want to spend hours on the phone demanding an explanation every time the Dow takes a dip.

Instead, consider concentrating your efforts so you’re focusing on a particular type of client. Give some thought to who would constitute the ideal candidate for your firm, and then build specifications around that. When someone who doesn’t fit the desired profile approaches you, it’s okay to politely tell them their needs would be better served by someone else … even more so if you give them another name to call. You know the other RIAs serving your market, so you probably know someone who would be a perfect fit. They’ll appreciate it, and so will the other firm.

It might seem counterintuitive to turn business away, but if it isn’t the right kind of business, it’s going to put a strain on your operations and limit your efficiency and profitability. You and your team only have a certain number of hours of productive time each week, and each of those hours is quite valuable. Use them to do what you do most efficiently and most profitably. Not only will your fees and AUM grow, but you’ll likely see greater job satisfaction on the other side of the balance sheet- among those high-value assets you call your employees.