Executive takes issue with findings on broker-dealers.
If you believe the findings of the Qfinance survey
recently reported in FANews, financial advisors receive little more
than lip service from broker-dealers when it comes to supporting their
businesses and developing them into lucrative enterprises. My
conclusion: It depends on whom you ask.
In my experience, smart financial advisors can tell you exactly what they need to be prosperous, and it's the smart broker-dealer that listens. And what we hear most often is that, to be successful, financial advisors want more time to build client relationships-the reason they chose the profession to begin with. We know that when businesses streamline their processes they become more effective.
When we looked at the ways in which financial advisors spend their time, the opportunities for change became apparent. Moss Adams LLP created a model of the current time allocation in advisor practices and compared it to the future model demanded for maximum profitability. Among other things, the model shows that the typical advisor spends only 3% of available time planning how the business will operate. But financial advisors should be spending 15% of their time examining how to structure their business, as well as their day-to-day activities, to achieve their professional and personal goals. And instead of allocating 41% of their time to prospecting and providing service to clients, financial advisors could devote 80% of their time to these endeavors.
Technology, marketing, coaching, comprehensive toolboxes and back-office support make this shift possible for financial advisors who use broker-dealers, custodians or clearing firms for support in practice management. Whether it is as straightforward as creating a paperless office or as consequential as staffing decisions or making the right investment in technology, these business concerns need attention. Our goal is to show financial advisors how to deal with them effectively and get the focus back on clients.
At every stage, the broker-dealer is responsible for helping financial advisors navigate the regulatory minefield. An experienced and knowledgeable operations staff can set a broker-dealer apart by not being afraid to point out the requirements for doing business safely, no matter how challenging it can be.
Business Development In The Future
Tom Gau, a $2-million-plus-a-year producer and leading trainer of financial advisors with his partner, Ken Unger, president of Million Dollar Producer, recently surveyed experienced, larger producers to understand the support they seek. Their top five requirements were training and strategies for:
Obtaining new qualified clients;
Modernizing their businesses by successfully transitioning to a fee-based practice;
Specific systems for operating efficiently and compliantly;
A business model prototype;
Hiring and managing a strong, capable staff.
These findings point to the fact that while financial advisors are working to keep practice management in motion, there is also the matter of developing opportunities for growth, or what is called business development. Enlightened financial advisors see it as a part of the whole. So do we.
We cannot tell financial advisors how to run their businesses, but we can give them a framework for success. And when they ask us how to implement a promising new idea, we consult with them to understand the situation before we respond with creative options.
It is in the best interest of broker-dealers and others to help financial advisors prosper, and firms need to provide education and support options. One of our most effective efforts is a set of intensive one-year coaching programs. Working with a dedicated business development team, financial advisors utilize a ten-module approach to achieve their goals by focusing on shaping and growing their businesses.
But we are hardly the only brokerage concern or custodian committed to helping advisors run their business more efficiently. Across the industry, one can see an array of initiatives at large and small brokerages and custodians aimed at tackling these thorny challenges.
Because there are no surefire business plans for success, it takes a unique combination for each financial advisor to find the "x-factor"-that intangible number in every business opportunity that equals ultimate success. Financial advisors can expect to multiply their business by that x-factor when they take advantage of partnering with a service provider that knows how to identify that combination.
Chris Radford is executive vice president of national sales for AIG Financial Advisors, a national independent broker-dealer serving more than 2,200 producing financial advisors with over $42 billion of client assets.