Top 3 Practice Management Tips For Financial Advisors

It takes a decade for most financial advisors to push past the survival phase to build a lifestyle practice. At this point, your practice consistently generates enough income to cover your basic needs and you have some breathing room.

But what happens next?

Do you coast along until retirement? Many advisors follow this path. Some make a conscious choice and enjoy the freedom of a lifestyle practice. Others wish to grow but lack the infrastructure, support, and know-how to break through the barrier of complexity to reach the next level.

Consolidated Planning helps experienced financial advisors grow from a lifestyle practice into a full fledged financial planning practice with transferable value using a proven process for growth. Our process is based on our playbook that enhances your practice value through our robust advisor resources. Our considerable experience relaunching investment focused practices with full financial planning capabilities typically triples an experienced advisor’s income within 5 years.

In this article, we’ll share our top 3 practice management tips for financial advisors wanting to grow beyond a lifestyle practice. By the end of the article, you’ll know what it takes to get to the next level and if your current firm has the resources to get you there.

 

Tip #1: Implement A Financial Planning Process

Most advisors focus on a narrow aspect of their clients’ financial lives and operate transactional insurance or investment practices. Each client is ushered through a short sales process designed to place insurance or investment business and then dripped on until another sales opportunity presents itself. Any variation from the advisor’s primary product is an arduous one off that’s impossible to scale.

Advisors who triple their income in five years have a repeatable financial planning process that is the guiding point of all their client interactions. The hallmark of this planning process is its focus on planning rather than products- it is not a sales process masquerading as a planning process.

As a planning oriented advisor, you’ll help your clients organize, protect, and focus their money. You’ll use the best financial tools to solve client problems rather than attempting to fit square pegs into round holes. You’ll gain client trust by leading with strategy first and then presenting solutions as problems are identified. Additionally, you’ll offer a full suite of financial products that allow you to gain 100% of your client’s wallet share and serve as their go to advisors.

Most importantly for a growth minded advisor, following a planning process will allow you to scale your practice and give you a framework for ongoing client service.

 

Tip #2: Create A Client Service Model

Most financial advisors conduct annual client reviews that are thinly veiled attempts to feel out additional sales opportunities. Larger clients may have more frequent reviews, but there is little else that distinguishes a top client from anyone else. Most advisors experience client service chaos rather than following a clear client service model.

Advisors that triple their income in 5 years understand the importance of following a client service model. The service model is a defined process for working with clients. It dictates who you will work with and how you will work with them.

You should have 100 key client relationships and all other relationships should be managed by your team. Establishing client minimums early will help you identify your key clients. Assets and income are commonly used as measurements to establish client minimums, but your minimums could be based on something else. For example, you may only choose to work with clients willing to fully engage with your planning process and pay planning fees.

Segmenting your book of business is essential to establishing a viable client service model. This means dividing your clients into different groups, each of which receive different levels of service from you. There are dozens of variations, but here is an example of different client service levels:

● A Level – $500,000 assets under management or $250,000 annual income
○ Quarterly reviews (2 in person, 2 virtual)
○ Monthly phone call
○ Monthly newsletter
○ Two annual client events

● B Level – $250,000 assets under management or $125,000 annual income
○ Semiannual reviews (1 in person, 1 virtual)
○ Every other month phone call
○ Monthly newsletter
○ Annual client events

● C Level – $100,000 assets under management or $75,000 annual income
○ Annual review (in person or virtual)
○ Semiannual phone call
○ Monthly newsletter

● D Level – Transactional client serviced by associate advisor
○ Annual phone call
○ Monthly newsletter

As your practice grows, your client service model ensures a consistent client experience and keeps you from becoming overwhelmed. Over time, your minimums will likely increase and relationships that no longer fit within your key client parameters transitioned to your team.

 

Tip #3: Build An Advisor Team For Long Term Success

Most lifestyle advisors remain lifestyle advisors because they fail to build a support team. Building your client facing and back office teams is essential for practice growth. Your team must compliment your unique abilities- the roadmap is different for every team.

An effective back office team can have a monumental impact on your productivity. Consolidated Planning’s back office support assists with everything from paperwork to plan design and strategy. You’ll find that delegating these non revenue producing tasks creates time and space for you to be in front of clients and prospects.

Building out a client facing team with an associate advisor or two allows you transfer servicing of your non key relationships. The off loading of client servicing frees up more time for you to spend with your top tier clients and prospects. Additionally, an associate advisor can cover for you while you are out of the office giving you the ability to truly disconnect.

It will take two associate advisors to eventually replace you. You’ll need a way to recruit, develop, and most importantly, retain these associates. Your associates can provide continuity to your practice in the event of your death or disability. They also increase the value of your practice allowing you to exit on your terms.

 

What Will Improving My Practice Management Mean For My Career?

You’re an experienced financial advisor and you’ve realized that there are only so many hours in the day for you to get things done. Unfortunately, your practice is completely reliant on you and this has caused your growth to plateau. You need to improve your practice management to increase your efficiency and scale.

We’ve shared our top three practice management tips and now, you’re wondering if it’s worth it to implement these tips in your practice. What’s it in for you and what will improving your practice management mean for your life?

Implementing these 3 tips will dramatically impact your life. Your practice will run more efficiently and you’ll have the support necessary to scale your business. You’ll have more time and your practice value will increase.

We’ve found most experienced advisors can triple their income in five years by implementing these tips. To see exactly what that would look like for you, reach out to our team to receive a custom playbook for your practice.

 

2022-145207 Expires 10/2024