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Suzanne's BioSpecial Report: Seven Financial Advisor Success Strategies
I've done a lot of networking in the past several years. I've met financial advisors just starting out in the business. I've also met financial advisors who have been in the business for years and have developed a loyal client following. Whether seasoned or newbie, these financial advisors could all benefit from a systemized plan to run their practice like a business.
Business skills are not taught – they are learned. I have been fortunate to have my serial-entrepreneur father as my mentor. I've been indoctrinated my entire life about how to be successful and although I have a business degree, I must say it's the real-world experience, both my own and what I've learned from good ol' dad, that has taught me the most. Listening to my father about how to get business and how to "knock on doors" has been a huge part of my life for which I will always be grateful. I don't care what business school you attended, the school of hard knocks will teach you far more than any school or university.
I think we are all capable of huge success. The question is: Are you willing to do the work? This is where the rubber meets the road and it's the true test of whether you will make it in a big way. Successful financial advisors are willing to do the things that average advisors are unwilling to do. It's that simple.
The following Seven Success Strategies are what I have learned over the years. They really apply to any type of business, but are written for financial advisors. I have a particular affinity for advisors, having lived in your world for four years, although as a licensed professional working with institutional investors. I have a love for the industry and a passion for helping those who want more out of their practice.
The Strategies detailed below are: (these are all links to sections below)
1. Realize that your Financial Advisor Practice is a Business
2. Target Target Target
3. Be a Financial Advisor that's Known for Something!
4. Invest in… YOURSELF
5. Get out there and Meet People!
6. Build an Advisor Team, Not a Solo Practice
7. Create a Financial Advisor Service Matrix for your ClientsAt the end of each Success Strategy there is a Homework section detailing what you need to do to be a better financial advisor. By adopting many of the strategies and principles contained in this article, you have the potential to transform your advisor business into a superstar practice within one to three years. Read on for tips on how to make your practice better.
1. Realize that your Financial Advisor Practice is a Business
No matter if you are an independent advisor or a stock broker with a large brokerage firm, you are managing your own business. Your success depends on none other than you. If you goof off, neglect to follow up with your clients, come in late and leave early, you aren’t likely to win any awards for Top Producer. What will help you is to learn how to manage your business, and structure is a good place to start.
Mark is an independent advisor with a leased office in a professional building and a broker-dealer office in the next town. He utilizes a contact management software program made for advisors to make his appointments. He has a PDA that syncs up his contacts and calendar. He always knows his schedule. He blocks time on his calendar for a morning workout three days a week, but is usually in his office by 8:30am pumped and ready to go.
His energy is highest in the mornings, so he reserves time on his calendar to meet with clients from 9 until noon. In the afternoon three days a week, he calls his top 50 clients, making sure to ask for referrals, and sets appointments for the next week or two. He sends his calls to voicemail at times to get work completed. In the late afternoon when his energy is at its lowest, he returns calls and answers email. Two days a week in the afternoon he also meets with clients.
Mark is a visual advisor and utilizes color codes in his scheduling software. He can glance at his schedule and know how the day is shaping up by the colors he sees. Green is for personal activities, yellow is for client appointments, orange is for networking events, turquoise blue is for workouts, pale green is for marketing activities, beige is for meals and coffee appointments, and royal blue is for follow up and business management.
Mark employs an assistant to take care of the more menial office tasks such as entering transactions into QuickBooks (his accounting software), making calls and booking appointments with clients, and answering client questions.
The moral of the story is that Mark treats his practice like a business. He is organized, has a well developed schedule, focuses on the important strategies of meeting with clients and asking for referrals, and he knows when he has free time.
Your Homework:
Vow to become better organized and to run your practice like a business. Develop a routine or schedule that works for you. Reserve time on your calendar for client meetings, calls and emails. Delegate administrative tasks to an assistant so that you can focus on practice building strategies.
Identifying a target client is not just a strategy for business owners; it is also a successful approach for financial advisors. By attempting to serve everyone and anyone, are you reaching your potential?
The benefit of defining a target client or ideal client is that you will get a picture of who you are really serving. When you can name the demographic and psychographic details of your ideal client you can tell your referral partners who you work best with.
You will need to build a Target Client Profile that includes both Demographic and Psychographic details. Begin by making a list of attributes you admire about your favorite clients. What is it about them that makes it a pleasure to serve them?
Identify the following:
• Their socio-economic group
• Their geographical location
• Gender
• Age
• Education
• Income
• ProfessionOther factors to identify:
• Are they Executives with assets in Defined Benefit Plans?
• Are they Business Owners with a need for Defined Contribution Plans?
• If a business owner, what type of industry?
• Are they workers with old 401k's who need rollover assistance?
• Are they Families in need of wealth management, trusts, and wills?
• Are they Single Parents needing 529 plans?
• Are they new mothers and fathers in need of life insurance?
• Where do they congregate?
• What technology do they use?Let's go back to Mark, our example above. Mark specializes in small business owners with 50 or fewer employees. Most of his clients have service-based businesses, are profitable and desire a defined contribution plan of some sort.
If you don't have a target client, what are you waiting for? Are you afraid that by declaring a target client that you will lose business because you no longer can sell to everyone and anyone? Targeting a particular client doesn't mean you can't still take care of other types of clients, it just means you are a specialist in one area.
Your Homework:
Take a look at your client files. Who are your favorite clients? Who are the most lucrative clients? Where is your experience? Develop a Target Client Profile and let people know who you work best with.
3. Be a Financial Advisor that's Known for Something!
Create a reputation by being known for a specialty area and tie this into your target client. Your referral sources, clients, and friends need something to wrap their minds around. This strategy not only draws business to you, it boosts your income.
What are some of the benefits of positioning yourself as an expert in your field?
Being an expert or specialist in your niche affords you many benefits and competitive advantages including:
• Market yourself more easily - You won’t have to cold call clients because they will come to you. Remember, clients want an advisor who is perceived as knowledgeable and skilled in their niche.
• Clients will be pre-sold – Clients who know you specialize in what they're looking for will be more eager to sign on the dotted line. If they've just inherited several million dollars and need estate planning or wealth management, it's unlikely that they will go to a generalist. There are substantially fewer barriers to closing a client if your prospective clients are pre-sold by perceived knowledge and specialization.
• More opportunities - You'll have the opportunity to speak, write, or comment about issues, challenges, new products, and trends within your niche. You'll be asked to attend industry events and networking opportunities. Imagine having your ideas and projections published and recognized by important industry commentators!
• Be more selective – You can be more selective with the clients you choose to work with. You can turn down the $4,000 Roth IRA Rollover and focus on the clients who are most in need of your expertise.
• Improve your close ratio - You'll improve your close ratio by demonstrating your expertise. You'll realize a higher return on your marketing dollar, in turn reducing your client cost of acquisition.
• Increase referrals - You will create a reputation and build greater client loyalty which can significantly increase client referrals.
• Limit competitors - You'll be able to limit the number of competitors in your field because you are perceived as one of the few advisors that can assist a client with their unique needs. This can build your reputation and reinforce your positioning as a superior advisor in your niche.
• Don’t limit yourself - You don't have to limit yourself to one specialization. You can be a specialist in several related areas.
Let's go back to Mark, our example above. Mark is a specialist in 401k plans, Simple IRA plans, and SEP IRAs. He regularly attends conferences and seminars to learn as much as he can about benefit plans so that he can be of service to his clients.
Your Homework:
Look at your current clients and decide where you will specialize. Keep revenue potential and your own interests in mind. Take the steps necessary to be able to call yourself a specialist.
As a financial advisor it's your job to help clients invest in securities, mutual funds, and other investments, but what about investing in yourself? What are you doing on the weekends? Are you wasting time that could be used to invest in further education, not only in your industry but also areas that could make you a well-rounded individual? What are you doing with your week nights? Are you watching too much television and not using your time to read and improve yourself? What strategies can you implement to advance your career?
Personal Health & Fitness:
What are you doing to ensure that you are operating at your best? Do you need to start an exercise routine? Do you need to include an exercise category in your calendar entries? Are you eating well - lean protein and organic vegetables? If you believe in the "strong body, strong mind" concept and vow to include workouts and healthful food in your everyday regimen you will be an asset for your clients and a role model for your associates.Education:
Remember to keep growing by taking training courses, seminars, and workshops. What conferences could you attend that would put you in contact with other ambitious advisors? By keeping company with successful high achievers, some of their energy will rub off on you. What do you need to learn? If you continue to learn new things you will grow and attract new clients.Credentials:
What designations and credentials could you acquire that would help you gain knowledge and credibility? What additional services could you offer with additional credentials? How could a specialized designation help your confidence? I have seen many advisors increase their self-confidence and skill by investing in a credential.Product Knowledge:
What are you reading to keep up with industry and product knowledge? Which of the following are you reading?Barons
Business Week
Fortune
Registered Representative
On Wall St
Kiplinger's
Money
Smart Money
Boomer Market Advisor
Fast CompanyTips to investing in yourself:
• Join a health club or take up a new sport (after seeking your doctor's advice).
• Perform your exercise routine first thing in the morning. Studies show that those who exercise before work tend to continue the practice.
• Update your business plan to include the pursuit of knowledge. List on your calendar the continuing education, classes, seminars, and conferences you want to attend to improve and invest in yourself.
• Consider which credentials or educational classes that may help you attract wealthier clients.
• Vow to be the best advisor you can be and all the business you want will flow your way.Your Homework:
Make a list of habits that keep you well.
Create a workout schedule.
Make plans to attend a conference or seminar.
Subscribe to one or more publications listed above.
5. Get out there and Meet People!
I often talk to financial advisors who are burdened with the daily details of running the business side of their practice. They have appointments, paperwork, phone calls to make, email to answer, and a myriad of other busyness to attend to. When I ask how they get new business they tell me by networking or asking for referrals from current clients, yet they may have been in the office without client contact for several days in a row.
It's time to network and meet new contacts! Schedule meetings with current clients and attend networking events. New business is not going to magically materialize if you are sitting at your desk with your head down immersed in paperwork.
What I want for you is to identify where your ideal clients congregate and create a strategy to mingle with them on a regular basis. This strategy should be focused rather than hit and miss. Go back to strategy number two above and figure out what associations your ideal clients frequent. Take this strategy a step further and get involved in an organization. Volunteer to be on the board. Get on a committee. Create relationships.
The biggest mistake financial advisors make when networking is that they go to an event once or twice and when business doesn't come their way they quit. Developing a successful referral strategy takes time and effort. Be focused. Don't go to every networking event around town. Be strategic and identify one to two organizations that best serve your interests. And get involved.
While you're at it, create Strategic Alliances. Who are good referral partners for you? Mark, our financial advisor from above, is a member of a Human Resources organization. He regularly attends meetings and receives referrals from fellow members. He has built a network with Benefits Managers, Business Advisors, Consultants, and CPA firms.
Your Homework:
• Call your five favorite clients and ask what associations they belong to. Determine which would be valuable for you to visit. Ask your clients if they would be willing to take you under their wing and introduce you at an event.
• Make targeted networking a part of your marketing strategy.
6. Build an Advisor Team, Not a Solo Practice
Whether you are an independent advisor or part of a larger practice, the philosophy explained herein applies.
• What happens if your practice is built around you?
• How do you feel when the business can't run itself without you?
• What would it be like if you could take a month of vacation annually?I often see either the solo practitioner or superstar advisor who is resistant to creating a team-based financial advisor practice. The reasons are many. Reluctance to giving up control; concern that hiring an assistant will be too costly; the lone ranger syndrome – wanting to do it all alone; and, superstar ego – no one can do it like me.
Disadvantages of a practice built around you:
• It's difficult to take a long weekend off let alone a month of vacation because business revolves around you.
• You can't network if you're doing all the work.
• You can't meet with clients if you're doing all the work.
• Practices built around one financial advisor are difficult to sell.Advantages of a Team-Based Practice:
• When clients are trained to deal with a team environment right from the start, they become less dependent on you.
• The financial advisor experiences less stress and more balance.
• Time is available for meeting with clients and networking to find new clients.
• The practice is much easier to sell because clients have been trained not to depend on one superstar.Tips to creating a team:
• Create a "Brand" for your practice. Write a Vision and Mission statement. Create a Tagline that addresses what it is that you do for your target client.
• Ensure that the Team Concept carries over into all advertising and marketing.
• Write complete procedures detailing how everything is done in your practice from how mail is opened to filing to processing trades.
• Write up roles and responsibilities for everyone in your practice. Everyone should know their job descriptions.
• Ensure that clients meet every member of the team.
• Do not name your practice after yourself. An effective exit strategy depends upon a team approach and if your name is on the business, it implies that you stay with the business.Your Homework:
Using the tips above, decide how you will build a team environment. Start somewhere. Even if you can't fund a full time assistant at this time, determine a budget and time frame and work towards that goal.
7. Create a Financial Advisor Service Matrix for your Clients
Creating a service matrix that identifies the level of service your clients will receive by working with you is a sound success strategy. If you've never heard of the Pareto Principle, also known as the "80/20 rule" now would be a good time to familiarize yourself with the concept. The principle states that 80% of effects come from 20% of efforts. Applied to a financial advisor's business, 80% of your income will come from 20% of your clients. Find out which of your clients comprise the 20% and put them at the top of a Client Service Matrix. Give them tons of service and let them know about it in advance.
Clients want much more than above average returns from their portfolios. According to a 2004 study by Russ Alan Prince and Brett Van Bortel on wealthy investors, the principal reason clients leave their financial advisors is because they don’t get the personal attention they're looking for. The study pointed out that investors left advisors due to lack of service (87%) rather than investment performance (13%).
Ninety percent of financial advisors earning over $150,000 annually have a defined and detailed Client Service Strategy, according to a study by CEG International. A good place to start is to develop a grid and identify the account size of your average clients.
Client Service MatrixType of Client Portfolio Size Service expectations Level Four Client $1,000,001 and over Quarterly reviews
Monthly phone contact
Monthly e-zine
Birthday ClubLevel Three Client $501,000 - $1,000,000 Semi Annual Client Review
Monthly phone contact
Monthly e-zine
Birthday ClubLevel Two Client $251,000 - $500,000 Annual Client Review
Quarterly Phone Contact
Monthly e-zine
Birthday ClubLevel One Client $100,000 - $250,000 Annual Client Review
Monthly e-zine
Semi Annual Phone Contact
Birthday ClubAdditional services to add to your grid may vary depending upon your practice such as:
Seminars and workshops
Meetings between Estate Planning Attorneys and CPAs.
Portfolio monitoring/rebalancing
Updates of financial plansTips to get you started on your own Client Service Matrix:
• Survey your current clients to find out what services they would like you to perform.
• Create a list of the services you currently provide and a list of services you would like to provide and analyze what make sense for your practice.
• You may notice that as you move down the grid, services decrease. It's up to you whether you want to communicate your service levels.
• High net worth clients will be attracted to your practice as you provide more personal attention.Extra Credit Homework:
Top 50 Clients: Create your Client Service Matrix and then take this strategy a step further. Determine who in your book make up your top 50 clients. Maintain regular contact with them. Treat them like royalty. Regularly ask for referrals. It's a good bet that referrals from this group will yield other high net worth clients.
Conclusion
I hope you find these seven financial advisor success strategies helpful. My hope is that you have found a few tips that will help you build a better practice. The key is focused action. Don't forget to work ON your business at least one to two hours per week.
Who is holding you accountable for your success?
If the answer is "no one" - Let me be that person. It's amazing what you can get done if you know you have to answer to your coach each week. Are you taking care of yourself? Did you make the calls? Did you do the follow up? Are you reaching your goals? What are you doing to make yourself an asset for your clients?
Please don’t hesitate to call me if you would like to discuss coaching. I am more than happy to explore options that will lead to your success. Please complete the Financial Advisor Complimentary Session Form or email me at: Suzanne@prosperitycoaching.biz.
Wishing you Peace and Prosperity, Suzanne
© Copyright 2006-2008- Suzanne Muusers - All Rights Reserved
About the author
Suzanne Muusers is a long-time Entrepreneur and Business Coach. She is a credentialed member of the International Coach Federation, a Mentor and an Author. She combines her 25 years of experience as an entrepreneur with her years working in the financial services field to coach financial advisors to build a business that positions them as the expert, draws business to them, and earns them a living far beyond what they thought possible.
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