Often, business planning, if it is done at all, takes place at the end of one year in preparation for the next year. However, based on my conversations with advisors, I believe firms took a “pass” during the market turmoil of this last business-planning season.
I encourage advisors to use the mid-year mark to look at taking back the reins of their company by creating business plans for the second half of the year. An advisor should put these plans in writing to increase the chance of following through.
When doing business planning, consider incorporating at least one of these pieces of advice from 10 industry thought leaders. These are culled from my conversations with them.
If you do plan, you are likely to be more successful in the latter part of 2010.
1. Better utilize CRM technology
“Many advisors often say they’re ‘too busy’ to work on their business pain points. I believe they should spend one hour today on the #1 initiative that will improve cash flow and free up their time.
I find the use of technology is often a big area for improvement. Advisors should leverage Web-based CRM tools from Sage ACT!, Salesforce.com, or Highrisehq.com or an email marketing tool like Constant Contact. In doing so, they can better manage their database of clients and prospects.
Consider this – automation can move a business forward, increasing revenues, allowing advisors to reap a huge return on their investment of time and money.”
Kenneth W. Cooperman, president, Advisor Consulting Services
2. Deliver more than satisfaction
“We have identified that loyalty is an emotional bond between the client and the provider that is far more significant than simply generating ‘client satisfaction.’ The key is to go beyond the delivery of the standard array of products and services. An advisor should engage with the client at a more emotional level, where client decisions are often made.
Developing this level of intimacy with the client requires that the advisor understand the clients’ personal preferences, their priorities and values. The impact of client loyalty on a firm is significant, as it will drive increased retention, relationship expansion and significant referrals.”
David H. Greene, managing partner, Greene Consulting Associates LLC
3. Look beyond organic growth
“We want advisors to be both successful small business owners, and great CEOs. By employing best practices, they can protect what they’ve already built, while attracting the top talent, whether it be a breakaway broker or another advisor. We’re seeing successful advisors combine both organic and inorganic growth, driving scale and efficiency throughout their practice.”
Michael Kim, senior vice president of practice management, Fidelity Institutional Wealth Services
4. Communicate the benefit
“An issue advisors are still facing is that they are not clearly articulating their value to prospects. Often, advisors are too black and white about what they do. In today’s environment, stating, ‘I’m an advisor’, isn’t always enough.
If advisors do not talk about benefits, they are not engaging the prospect. Talking about yourself and your products often comes across as sales-y. For example, if an advisor says, ‘I have a CFA designation’, what does that really mean to someone? Instead, advisors should follow their feature statement (‘I have a CFA designation’) with ‘And let me tell you why I think that’s important.’
This simple technique shows how advisors can be more successful using a benefits, not features, approach.”
Maribeth Kuzmeski, principal, Red Zone Marketing
5. Improve systems and processes
“One step advisors should take is to transition to an electronic filing system. What they will find is everything gets documented at a higher level. There is always room for incremental enhancements in a practice and this change allows for a significant improvement. Going electronic also lowers the risk of employees leaving without having a replicable system for the information in their head.
The reality is, no matter how great a firm an advisor has, life happens – a spouse transfers, family needs arise, etc. But by further using technology like Skype and iLink, advisors can now overcome geography and have an employee effectively work from a remote destination when those life changes happen.”
Richard C. Salmen, 2010 FPA Chairman
6. Put a succession plan in place
“It is the obligation of all independent advisors to develop a succession plan, so that they ensure stability in their business. Advisors aren’t going to be around forever and they need to plan accordingly.
A succession plan is crucial to an advisor’s retirement planning. To have one in place, ensures stability and integrity for the clients, the advisor and the heirs.
Advisors need to do one of three things: groom a successor, structure an arrangement with a peer, to secure, at minimum, a buy-sell agreement, or look to create an integrated partnership with another advisor, which will streamline operational efficiencies and increase revenues.”
Ryan N. Shanks, founder and CEO, Finetooth Consulting
7. Focus on the bottom line
“Many fast-growing businesses can fall into the trap of focusing too much on the top line while neglecting the bottom line. A number of advisors learned that lesson in late 2008 and the first half of 2009. Advisors should focus on their margins and profitability and understand what drives their profitability, not just their growth.
Advisors should understand profitability at a deeper level, by client relationship, so that they do a better job of allocating the right resources to the right clients for their business. As a result, firms can improve both profitability and productivity – both in good times and more difficult business environments.”
Scott Slater, managing director, Business Consulting, Charles Schwab Advisor Services
8. Reassure clients
“Too many advisors hide from their clients when the market’s bad, but that’s the worst thing they could do. Clients know it’s not their advisor’s fault the market tanked, but they will hold a grudge if their advisor ignores them. In a volatile market, clients need reassurance that the strategy they bought into still holds water, and if it doesn’t, what they need to do to fix it.
“Taking the time to reassure clients isn’t necessarily an easy conversation; neither does it lead to sales in the short term. But advisors who don’t nurture their client relationships now won’t have any when the market picks up again. Proactive advisors are acquiring new clients left, right and center these days because their old advisors didn’t pick up the phone.”
Howard J. Stock, editor, Bank Investment Consultant magazine
9. Refine focus and reach critical mass
“One key area where many advisors need to focus their efforts is in improving operating efficiencies.
“Advisors need to ask the question, ‘Is the firm’s business strategy still relevant?’ Advisors should look at how they have structured their business and the diversity of their client base. Then they need to plan where they want to focus for the future, as every advisor has a limited amount of resources. As the old saying goes, ‘Form follows function.’
“Then advisors need to find the optimal level of efficiency by shrinking or growing their business. They need to determine what level of clients, revenue and profit are needed to achieve critical mass. It is pure economics.”
Mark Tibergien, CEO, Pershing Advisor Solutions
10. Don’t juggle too much at once
No matter how good a juggler an advisor is, there can only be so many balls in the air before they all drop. Advisors need to take a step back (especially if they missed their normal planning window last year), define their priorities, and limit their activities to their top three to five initiatives.
Good luck making the next six months the best in your firm’s history. That success will likely be compounded for years to come.
Mike Byrnes founded Byrnes Consulting in April 2008 to provide business planning and marketing strategy consulting services to help advisors become even more successful. Read more at www.byrnesconsulting.com. Look for future columns from Mike Byrnes to help your practice become more successful.