Do you have a formal business plan?
Probably not, according to the 2014 Drivers of Business Growth study, released by the FPA Research and Practice Institute. It found that more than two-thirds of financial advisors lack a written, formalized, well-documented plan for growth. Specifically:
• More than half of respondents gave themselves a failing grade when it comes to having a business development process.
• Only 9% rated themselves as “very effective” in that respect.
• Just 25% said they met or exceeded their goals last year; even more (33%) admitted they fell short.
• About a third have goals—but no plan to achieve them. (Would you let a client get away with that?)
• Only 10% of advisors have a marketing plan.
Small wonder that the FPA says a whopping 93% may never be able to sell their practices because they lack a sustainable profit model.
That’s the situation most advisors are in—and, as I explained in a previous column, it’s not going to get any better if you aren’t ready to accept and embrace the technological and social changes that are already impacting our business.
The good news, if you’re not operating as effectively as you would like: You can fix it.
Having met thousands of advisors over the years at industry events and seminars, and having coached and mentored many of them, I recognize that IAs by and large are very talented people—and I’m willing to bet you are, too.
Regardless of the channel you’re in—brokerage, bank, insurance, independent—you care about your clients. Also, regardless of the channel you’re in, you need a business plan that transforms your ability to serve clients into actually serving them.
We figured this out a long time ago, and it’s helped us create one of the largest advisory firms in the nation. Let me share what we’ve learned so you can decide if these principles might help you to grow your practice.
First, we use three simple words to define the core of our business plan: “educate,” “advise,” “assist.”
We place education first. When my wife, Jean, and I started our business in 1986, we started by offering college planning seminars to elementary school PTAs. Today, seminars remain an important component of our practice; this year, we’ll present about 800 seminars around the country, and we expect more than 30,000 people to attend. A full meeting/events team supports my 10 full-time presenters so that my advisors don’t have to do double-duty as speakers (freeing up their time to meet with more clients, so we can serve more people and collect more assets).
Other key elements of our business plan include identifying and finding our target market (you can’t talk to prospective clients if you don’t know who and where they are), working extensively with the media (to reach said target), creating a solid communication plan (so the target will respond) and, of course, developing an outstanding financial planning and investment management process designed to exceed the expectations of our clients.
I’ll cover these subjects in future columns, but let me provide for you here the five vital elements that are fundamental to our business model.
1. It isn’t what you know or who you know. What matters is who knows you.
We’ve learned the importance of spreading our message and highlighting our expertise through all forms of mass media:
• Broadcast media (as hosts and guests of terrestrial and satellite radio and television);
• Digital media (on websites, social media and search engines);
• Print media (in newsletters, books, articles, columns, e-mail blasts, blogs, Twitter feeds, Facebook posts and more);
• The stage (in seminars, webinars, workshops and keynotes); and
• Direct mail.
We also communicate through influential people, or centers of influence (clients; prospective clients; and other professionals such as accountants, attorneys, real estate agents and loan officers).
The more people who learn that we have the knowledge and expertise that they, their friends and their clients want, the more clients we get. Being a great advisor isn’t enough; people have to know that we’re great advisors. And no one will tell them but us.
The best way, we’ve found, is to be where other advisors aren’t. For example, a magazine in our town publishes an annual list of its top local financial planners. We’re on that list, and every year all the advisors on that list pay for ads that appear when the magazine publishes its list. Everyone, that is, except for us. We never run an ad in that issue. Why not? Because everyone else does! The magazine becomes a cattle call. I’d rather place ads in something like a plumber’s magazine—someplace where I’d be the only planner there. Place yourself where you have the market all to yourself.
Planners Failing To Plan
April 1, 2015
Do you have a formal business plan?