Lifestyle Practice for Financial Advisors: 5 Essential Ingredients

Is a Lifestyle Practice for you as a financial advisor?

Lifestyle Practice for Financial Advisors: 5 Essential Ingredients. Financial advisors in many business models are often motivated by maximizing investment returns as much as possible. It can be a fascinating process to find those unique financial vehicles that benefit clients most. The process can include many hours of research and sometimes resemble a treasure hunt!

Countless hours can be spent going down rabbit holes and finding the right fit for clients. An advisory firm in growth mode can be a work-life balance challenge when comparing time in growth mode versus living a good life.

Clients often hire me to help them get their firms in shape for a transition to a lifestyle practice, for growth, or for sale. Areas where they like to focus include Business Development CoachingFinancial Industry Career Coaching, and Executive Coaching to sculpt a career that aligns with life goals.

Building a lifestyle practice as a financial advisor offers many benefits that quickly get overlooked. This business model empowers financial advisors to thrive inside a well-operating practice while also balancing out the enjoyment of a personal life.

Establishing your career doesn’t have to mean sacrificing the desires of your dreams, the depth of your relationships, or the simple ability to enjoy a little free time now and then. Let’s explore how this concept of a lifestyle practice can help you find the right balance and what ingredients are required for sustainability and success.

In Case you didn’t know, this is a Lifestyle Practice:

The idea of a lifestyle practice is simple but requires a bit of work to pull off effectively. Instead of focusing on exponential growth, you are cultivating a business where the environment is directly tied to your preferences. You are minimizing overhead while maximizing profits and integrating your personal needs.

Put another way, we can look at two financial advisors – Steve and Alice. Steve works a 9–10-hour day for his firm, growing a book of practically unending clients. However, he has no time to catch up with friends, build a family, or go on those fishing trips he’s dreamed about since he was a kid.

Alice chooses a different track. She focuses on clients with at least a million in assets and decides to meet 2-4 times a year during designated months. This allows her to manage the accounts more reasonably, growing holdings with the same fervor as Steve but on a timetable that suits her personal goals, relationships and desires.

The result is a far more agile financial advising practice. Alice can better implement new, exciting, or innovative processes because her client base is smaller yet incredibly potent. There are fewer complexities to work through because the infrastructure is easier to manage.

The Goal of a Lifestyle Practice: Work-Life Balance.

Achieving a work-life balance is the goal of most lifestyle practices. Don’t get me wrong, you are not sacrificing profits for time. Instead, you are balancing your goals so you have a more fulfilling life. This is crucial to financial advisors as many of us show signs of burnout early in a growth-centric career.

If you’re interested in whether a 4 day work week is possible, see this article.

Is it wrong to want a lifestyle practice? NO! If you are approaching burnout and have your client base already established, this type of practice can be ideal. I’ve said for years: YOU get to decide what you want your practice to look like. There’s no unwritten rule that you must be in growth mode.

That said, if you don’t currently have the client base to create a lifestyle practice, then you do have quite a bit of work to do.

So, when you balance your financial advising practice with your life goals, you start to redefine the “how” and “why” of your business. This leads to changes like the following.

Defined Work Hours: 

Having a set schedule when you can and cannot be reached so you can balance your free time and cultivate the lifestyle you’ve always wanted.

Unplug from Work:

Financial advisors live and breathe from their marketability. Even when not working with clients, you are probably thinking of starting a podcast, PPC ads on Facebook or Google, or finally getting that appointment at the local golf club to find new clients.

Setting Boundaries: 

A healthy work-life balance begins and ends with boundaries. For example, if you are attending your niece’s annual school play, you shouldn’t have to send emails to needy clients on your iPhone.

Prioritize What is Important: 

With more balance, you begin to see what matters most to you. That allows you to prioritize tasks in both your professional and personal life.

Create Your Busy Season:

Instead of focusing all your efforts every day, 100% of the time, you designate structured periods where you handle business. That helps outline client expectations and gives you “wiggle room” to test new theories, implement new technologies, and maximize profits as appropriate.

Of course, experiencing these benefits to a work-life balance is easier said than done. That is why you need some crucial ingredients to help you get started.

5 Essential Ingredients to a Lifestyle Practice.

Building a lifestyle practice requires more than the intent you feel after answering your hundredth client call for the day. You must undertake some strategic planning and follow through with quality execution. Here are five essential ingredients to help you get started.

Step 1 – The Right Team Members in the Right Seats.

The right team members performing the best-fit roles in your financial advising practice are crucial to your success. This is more than matching up some LinkedIn resumes with the job guidelines. It is all about uncovering those high-value individuals who share your vision, passion, and desire for a balanced professional setting.

These team members must have the foundational skills necessary to complete their roles but also embody the culture you hope to cultivate. As long as you can align the overall goals of your team, you can maximize strengths that lead to higher client satisfaction rates, vibrant team morale, and a balance of profits and personal goals. When I work with clients on selecting the correct team members, I use the VIA Strength Assessment. Over the decades of working with financial advisors, I have honed the results of this assessment to uncover strengths needed and those that don’t work at all.

If you’re curious about how to better assess what team members you would like in specific roles, schedule time with me here. As an experienced Business Coach and financial services professional, I can help you discover the proper assessment points to know you have a viable team to help you grow a lifestyle practice.

Step 2 – The Right Marketing Plan.

A lifestyle practice has much more to do with quality than quantity. Instead of focusing on more heads in your office, you want clients best designed for your needs and strategies. That means your marketing will best function with organic referrals.

However, before you can capitalize on word of mouth, you must first obtain recognition in something in your Personal Brand that sets you apart. That begins with a quality marketing plan. You need to develop a way to reach the most significant number of potential clients (in your target audience) by speaking to their needs. That can be achieved through email campaigns, website SEO, blog articles, podcasts, or good old-fashioned handshakes at local events.

The point is to develop a marketing plan that directly addresses the unique needs of your most valued clients. As that snowball rolls downhill, you’ll quickly experience more interest in the unique culture you have created through a lifestyle practice.

Step 3 – The Right Model Work Week.

This is a crucial “must-have” for your lifestyle practice. The right work week is more than a 9-5 where clients have unfiltered access to your attention. You want to create a structure with boundaries that ensures you balance your professional life’s goals with the hopes of your personal endeavors.

I have a great article on the best financial advisor weekly schedule, but in simple terms, you want:

Priority days focused on achieving goals where interruptions are minimized.
Go days where you get out and market your business to grow leads or cultivate relationships.
Easy days where you can catch up on the other essentials of operating your financial advisory practice.

This model allows you to balance the stressors and goals of your career. Even from this whittled-down explanation, you can see room for having a meal with a friend, catching a movie with your kids, or enjoying a round of golf to unwind.

Step 4 – The Right Ideal Clients.

The right client for your lifestyle practice as a financial advisor is not necessarily the wealthiest. You want to align your goals with the goals of your client. They should see you as an invaluable resource for their accounts as well as a shared visionary for the culture you cultivate.

You should be passionate about solving their challenges and pain points. You do this by understanding their behaviors and then customizing your practice and marketing to attract them to your business.

There are many qualities and demographic understanding behind this philosophy of the “ideal” client, but it all comes down to deciding which people you want to work with so you can achieve that highly coveted work-life balance. I have a great article on uncovering the right ideal clients to help you with this ingredient.

Step 5 – The Right Culture.

The last ingredient is the hardest to reach. There is an environment you need to cultivate that is challenging to start but begins to run on autopilot once everyone is onboard. You want your entire team to feel valued and supported while allowing them professional development.

You also want a culture that places a premium on boundaries, personal growth, and time with family and friends. The goal is to build a community with your practice that thrives on shared values and then demonstrate the importance of this culture to your clients. Pretty soon, you’ll start attracting more clients who also value this balance and appreciate the methods you use to manage and grow their accounts.

Final Thoughts.

Incorporating the essential ingredients into a lifestyle practice allows you to grow as a financial advisor as well as cultivate an environment where your personal goals can thrive. This balances your dreams, relationships, professional aspirations, and more.

Take your time to outline the “why” behind seeking a lifestyle practice, and you will be amazed at how quickly your goals begin to fall into place. If you feel a little lost, reach out for some advice.

I have built the lifestyle practice that works best for me and can help you focus on your career, personal development, and business goals. Let’s discuss how my coaching programs can help you succeed with a new lifestyle practice.

How Much Do Experienced Financial Advisors Earn?

How Much Do Experienced Financial Advisors Earn? This is what we will be discussing today in this blog post. In all my years as a Coach for Financial Advisors, Finance Career Coach, and Finance Executive Coach, I have seen variations in finance career earnings depending upon how long the client has been in business (or in the profession) AND their ability to market their unique value proposition.

There were around 384,000 financial advisors in the US in 2021. The advice offered covers everything from personal wealth management to how best to utilize that large inheritance from your recently deceased uncle you’ve never met.

These hardworking financial advisors guide clients of all demographics toward fiscally responsible decisions based on data, and sound money decisions, plus they provide tailored insights based on their investment experience.

All said and done, that is a massive responsibility. While more and more people are entering the financial advisor industry at the entry level, an experienced financial advisor can make all the difference in the world when it comes to achieving personal financial goals.

Your time as a financial advisor is highly valuable. Clients will rely on you for many tasks, and as such, my firm belief is that you should be fairly compensated.

With only a couple of years’ experience, you can expect to earn $100,000+ annually, but there are many ways to grow this revenue. Let’s look a little deeper into a financial advisor’s role and earnings potential.

How Do Financial Advisors Make Money?

Most financial advisors fall into one of three earning categories below.

  • Fee-Based: Earn a percentage of the AUM (assets under management) from a client, as well as commissions on certain products they recommend.
  • Fee-Only: The revenue earned comes solely from the client as project-based work (like financial planning) or in assets managed, usually a percentage of the assets under management.
  • Salary plus bonus: Most commonly a financial advisor working for an institution like a bank or investment firm.

In general, fee-only financial advisors are perceived as having the most favorable business model for the general public because their compensation is paid only by the client. This is also because they are perceived as not being incentivized to upsell or promote specific products. Decisions they make are seen as win-win because the more the client earns, the more the advisor earns.

This does not mean that advisors who are fee-based are not doing their fiduciary duty for their clients: The best advisors are those who work according to a set of values and morals that help them do what is genuinely in the clients’ best interests.

How Much Do Different Financial Advisors Make?

There is a stark difference between a “newbie” financial advisor and someone with experience. This article is about advisors with experience! After around five years of experience, your earnings will fall somewhere into one of three categories listed below, according to my experience working with advisors since 2004. This information is not to be considered a scientific survey, but rather my own experience, living and breathing the industry for many years.

Let’s take a look at the 3 levels of financial advisor income as expressed in net income after operating expenses. The section titled “What it takes” is by no means an exhaustive list of strategies for how to get there, but simply a few notes about personal and/or business tactics needed to get to that level of income.

Level 1 Financial Advisor – earns $100K-$300K

Around 60%, or the majority, of financial advisors with more than five years of experience will earn over $100,000 annually and up to $300,000.

At the higher end, $300,000, puts the advisor in the top 10% of household income in the United States, which is not bad at all. Many of these advisors have earned professional designations that allow them to offer more services and expertise to their clients.

What it Takes:

  • Hard Work: Don’t expect a pat on the back. You will have to put in the effort to uncover the best possible situation for each individual client you work with. Their referrals will propel your career forward.
  • Long Hours: This is not a 30-35 hours per week side hustle. At times, you will put in long days, nights, and weekends to create a pipeline of consistent cashflow, offering you a peak at an affluent lifestyle ahead.
  • Prospecting Campaigns: To even scratch the surface of $100K (let alone $300K), you’ll need to cultivate a list of high-value prospective clients willing to work with you. Then, devise a strategic campaign to touch these prospects on a regular basis.

Level 2 Financial Advisor – earns $300K-$749K

The next stage in revenue is Level 2. This is about 30% of the remaining financial advisors who have shown how to maintain and service a long list of happy clients. They know what it means to build long-lasting relationships and therefore wealth. You will see specialization begin at this level as well, where advisors tend to gravitate to a particular clientele based on a target market strategy.

What it Takes:

  • Branding: Hard work is not enough. Now, you need to “sell” your services by developing a personal brand that provides a sense of credibility. Is your message clear? What is the benefit your client receives from working with you? What is your Value Proposition?
  • High-Level Connections: Do you have a Chicken List? You know, people in your network that you have not yet leveraged for connections. Knowing a millionaire does not a connection make. You want to seek out referrals to HNW clients by growing relationships with “Centers of Influence” who will personally recommend you to friends, family, peers, and communities.
  • Marketing and Prospecting: Don’t confuse this with branding. Your brand is what your customers see and the emotions they feel about the work you do for them. Marketing and prospecting means to actively seek out customers with a well-thought-out plan to find and connect with your target market, where they spend their time. This could be through business networking, social media, or even leading public speaking events.

Level 3 Financial Advisor – earns $750K and Above

Only the top 10% of financial advisors earn over $750,000 annually, which puts them in the top 1% of Americans in terms of household income! These are the rockstars who have learned not only how to manage money in a sophisticated way, but also how to carry themselves with confidence and ease.

We’re talking about fully committed and determined financial advisors who are highly motivated to target high net worth clients that are the tipping point to numerous others behind them.

What it Takes:

  • Confidence: You have to exude that you know what you’re doing based on the years and success stories you’ve collected. That experience and confidence is precisely what attracts your target market.
  • High-Level Business Networking: You are looking for businesses and organizations or those individuals that have vast wealth. To earn enough to reach this level, you must be advising clients on their portfolios with a total worth well into the double digits of millions and beyond. The locations you frequent could be the country club, charity organizations, or homes of the high net worth.
  • High Social Intelligence: An essential skill you’re likely to develop is the ability to read and understand the actions and motivations behind why people do what they do. Learning to be comfortable in almost any social or business setting becomes part of who you are. To put it simply – you have a finely tuned gut instinct based on the learning you have acquired and the actions of previous clients.

Of course, there will always be outliers. You can come across the young upstart with a book of clients in the half billion based on family connections or someone completely from left field specializing in blue collar or union workers. However, the above are the basics you’ll find in most high income financial advisors.

What is the Financial Advice Industry Outlook?

There is a significant demand for experienced financial advisors. This sector is anticipated to grow roughly 13% over the next 10-15 years. A big reason for this is the increase in an aging population.

It’s important to note that there is an increase in “robo-advisors” gaining a foothold in the industry. This is still relatively new, and it will take time to see how well they perform compared to personal financial advice, but it should be mentioned as you explore the revenue potential for this field. 

How to Maximize Your Earnings as a Financial Advisor

Everyone wants to know how to eclipse that $100,000 threshold and start earning “real money.” Sorry to say, there is no 100% effective way to do this. It will take a combination of many different strategies and efforts to achieve success.

That being said, you should start by:

  • Business Networking: The lifeblood of your business as a financial advisor is your network. You need to cultivate a substantial list of Centers of Influence within your target demographic and earnings range.
  • Self-Investment: You are your best asset. The more you learn about your role and how to expand your offerings, the better you serve your clients and gain notoriety.
  • Prospect Follow-Up: A mistake many newer financial advisors make is to not follow up with warm leads at least 5-12 times! Have a system in place to maintain communication, and you’ll naturally grow your business. If you give up after 1-2 touches, you will lose out on many potential opportunities.
  • Marketing: You cannot succeed as a financial advisor without getting the word out about your services. The online world has grown and is helpful for word of mouth referrals. Sometimes this means marketing to a larger group of potential clients through speaking at your own Workshops and Seminars. Partnering with Centers of Influence can be very helpful for this tactic.

Final Thoughts

The journey of a financial advisor is marked by relentless effort, strategic thinking, and continuous learning. The financial rewards, as we have seen, vary significantly across different levels of experience and expertise.

Do yourself a favor and put in the work now. All those highly successful financial advisors you meet have honed their skills and invested in themselves in many ways over the years. Put in the work, and you’ll harvest rewards.

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