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, how do you get there?

Consolidated Planning helps experienced financial advisors grow from a lifestyle practice into a full fledged financial planning practice with transferable value using a time-tested process for growth.

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 you have what you need to get 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 might triple their income in five years have a repeatable financial planning process that is the guiding point of all their client interactions. Repeatable.

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 an 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 might 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.

Ideally, 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, if you have one

○ Annual phone call

○ Monthly newsletter

 

As your practice grows, your client service model ensures a consistent client experience and keeps you from becoming overwhelmed. Moreover, that client experience leads to more referrals to sustain your practice.

Over time, your minimums will likely increase and relationships that no longer fit within your key client parameters transitioned to your team if you choose to build one.

 

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 and that 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.

More to come on this.

 

Improve Your Practice Management And Your Financial Advising Career

Because you own your own practice as a financial advisor (at Consolidated Planning, at least), your practice is completely reliant on you. In some instances, this factor can cause a growth plateau which can be hard to overcome.

With this weight of ownership, it’s even more important for you to improve your practice management to increase efficiencies, create a sustainable practice, and scale if that is a goal for your practice.

The right framework can get you there.

If you’re ready to understand the support and process necessary to free up your time and build your practice value, talk with a team member at Consolidated Planning about the interview process.

 

Exp. 10/2027

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Consolidated Planning, Inc. is an Agency of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member FINRA, SIPC. OSJ: 6115 Park South Drive, Suite 200, Charlotte NC 28210, Phone # 704-5528507. PAS is a wholly owned subsidiary of Guardian. This firm is not an affiliate or subsidiary of PAS. This material is intended for general use. By providing this content Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity.