The Delphic oracles of ancient Greece had the right idea when they wrote, “Know Thyself.” But as simple as it sounds, knowing who you are takes time and energy to discover. It’s about determining both your strengths and weaknesses and using that self-awareness to combat your limitations with the right resources, and ultimately, leading you closer on the path toward success.
As an advisor, knowing yourself and your business is essential to developing your practice as one you can confidently stand behind. Now more than ever before, investors are demanding that you peel back the layers, find your value proposition and who you should serve, and be able to market yourself accordingly and transparently. Once you decide who you are and where you want to focus as an advisor, you’ll be able to use your energy to connect with the right types of investors and form a mutually beneficial relationship—the ultimate “win, win” for all parties involved.
Jefferson National’s latest “Advisor Authority” study reveals findings from 1,400 RIAs, fee-based advisors, and individual investors with the goal of helping advisors better understand themselves, their key differentiators and which type of clients they serve best in order to align their practice to fit the frame. According to the study, financial advisors fall into three profiles: tactical managers, active advisors and relationship builders.
Getting To Know Yourself And Your Firm
Getting to know yourself may sound like a basic approach from a self-help book—but it has value and is simply the first step toward growing your practice for the future. So, where do you start? The “Advisor Authority” study defines financial advisors into three broad profiles:
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The Tactical Manager – Uses active investing strategies and low-touch engagement with clients (Low-touch, meaning client interaction that is less frequent and more likely to be digital than in-person.)
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The Active Advisor – Uses active investing strategies and high-touch engagement with clients. (They are action-oriented in their approach to investing as well as client interaction.)
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The Relationship Builder – Uses a more passive investing strategy and high-touch engagement with clients.
Among the advisors surveyed, 36 percent fell into the tactical manager profile and 36 percent fell into the relationship builder profile, while 22 percent fell into the active advisor profile. As for the tactical managers, 18 percent oversee more than $250 million in clients' assets under management (AUM), while 21 percent of active managers do. Yet only 8 percent of relationship builders manage more than $250 million in AUM.