Planners Failing To Plan

2. You must choose your approach.

Do you want to hawk your services like a TV pitchman? Or do you want to be known as someone who educates consumers? You need to choose, so you can laser-focus your efforts. Both approaches work, so neither is bad. Good pitchmen, after all, do make lots of sales (as demonstrated by the success of late-night infomercials), and there’s no denying that great advisors who are also great marketers build great businesses (just ask Ken Fisher). But I’d prefer to be known as an educator rather than a marketer.

3. You must choose your timing.

Will you be reactive or proactive? The former responds to the news: You give reporters your take on what’s trending. The latter sets the trend—establishing you as a thought leader, one who creates the news story rather than someone who merely comments on it.

For example, I was the first IA to say (starting back in the ’80s) that you should not pay off your mortgage. By saying things no one else was saying, it attracted lots of media interest (Oprah was intrigued!), which got me in front of millions of people, getting them to think about something they didn’t know and, in many cases, getting them to contact us to learn how we could help them.

4. You must choose your platform.

We’ve already discussed the media you can use. There are dozens of ways you can get your message out. Choose which methods interest you, and which play to your strengths. If you lack the time, skills or desire, hire others to do it for you—such as speakers, agents, PR specialists and ad agencies. You don’t have to be a great writer. Hire one. Graphic designers can design your newsletter, and public speakers can present seminars for you.

Remember, it’s not the speech you give, the conversation you have, the article you write or the interview you give that matters, per se. Rather, it’s your performance in each forum or platform—because people will equate your performance as a writer or speaker with your abilities as a financial advisor.
Even in everyday places (at cocktail parties, at the mall, at restaurants, at Chamber of Commerce meetings or on the soccer fields where your kids play), you must recognize that people are concluding how good an advisor you are by how well you are coming off in these other settings.

Does your website represent you in the way you want to be seen? Does your business card? How about the way your telephone is answered? What kind of furniture and reading material will prospective clients notice in your office?
Everything is a performance.

5. You must prepare for success.

When executed properly, your business development plan will get your phone to ring. Make sure you’re ready to handle the volume—or people will be disappointed at your lack of responsiveness, and your reputation will be damaged.

For instance, if you send out 10,000 pieces of mail for a direct-mail campaign and get a 0.3% response rate, that’s 30 phone calls. Could you handle them? If you can’t quickly return those calls and book the appointments that might result from them, you’re wasting your time and money—and annoying those who respond.

This means you must spend time and money before mailing those letters so that you’re ready to capitalize on the campaign’s success. Otherwise, you’re simply planning for failure.

There is no question that every advisory practice must have a successful business plan with sufficient resources devoted to make it successful. If you don’t have a plan, don’t know how to create one or don’t want to spend the time and money necessary to make it work, realize that you are unable or unwilling to compete with other advisors.

If this is you—and it is for two-thirds of the advisors reading this, according to that FPA study—then you have two choices: You can quit or retire. Or you can join a bigger firm that has figured out all this business plan stuff. The advisors of my firm let me do the marketing (which they hate) so they can focus on advising and serving clients (which they love).

You can make a similar choice: develop and execute a great business plan, or work with a firm that does it for you.

And please realize that if you fail to make a choice, the marketplace will make it for you. Without a business plan, you’ll fail to attract and retain enough clients—and you’ll be forced to either quit or join another practice. You and your clients will be far better off if you control that decision instead of letting market forces dictate it for you. 

Ric Edelman is chairman and CEO of Edelman Financial Services LLC, a registered investment advisor. He is an investment advisor representative who offers advisory services through EFS and a registered principal of (offering securities through) Sanders Morris Harris Inc., an affiliated broker-dealer and member of Finra/SIPC. He can be reached at [email protected].