Most wealth managers can double their annual revenues by implementing specific industry best practices. After doubling your revenues, you can continue significantly growing your wealth management practice until you hit severe time constraints. We have found that only some wealth managers hit the time constraints, as most will upgrade their clientele instead. Admittedly, if you consistently personally generate $2 million to $3 million or more annually, you can still meaningfully increase your revenues, but it gets hard to double. It is just the math.
The catch is that few wealth managers will take the requisite actions, and among those that do, only a percentage of them will adopt the proper mindset and implement the best practices well. Nevertheless, the best practices, which are interconnected, have worked amazingly well for some wealth managers over the last few years, with much of the increase in revenues turning into substantially higher incomes and considerably greater firm equality value.
Onto the best practices…
Benefiting from the fact the private wealth industry favors professionals. The private wealth industry is structurally biased against clients. It is often confusing and opaque to them. Many clients are not getting high-quality wealth solutions, and they often overpay for them even when they are. The wealthy are fast becoming better consumers of financial and legal advice. If you are proactive about helping them by pulling back the curtain on the private wealth industry, you can often easily and quickly eliminate the competition.
Developing a deep understanding of prospects, clients, and other professionals. To provide superior results to clients, you must know them well. You must understand their goals and concerns, including latent needs and whispered anxieties. You must be curious about their lives and dedicated to optimizing their worlds. To develop this level of knowledge about prospects and clients, and professionals who can refer to you requires a methodology such as Discovery, systematically applied.
Communicate with clients so they can make smart decisions. You must discuss solutions with clients so they clearly know what they might want to consider or agree to. While this sounds straightforward, most private wealth industry professionals do not discuss options with clients in ways that enable them to make smart decisions. For example, instead of addressing outcomes, they concentrate on mechanics. It would be best to talk with clients in ways that align with their thinking.
Building a network of exceptional specialists. Whether in-house or external, you will often need to rely on other professionals to deliver superior client results. These professionals must be technically adept and know how to work together and under your direction. The specialists must also have integrity and be comfortable with clients choosing not to work with them. It is your responsibility to construct and manage such a network of experts.
Creating a steady stream of wealthier client referrals. Doubling revenues requires clients, and those clients usually need to be wealthy. As you only have so much time, you will need to increase the return you are getting on your time to become more successful. Very few wealth managers consistently source new clients, let alone wealthy ones. This is essential to your success. Some methodologies, like Ultimate Rainmaker, can enable you to build a pipeline of wealthy clients from centers of influence, such as accountants and attorneys. You need to learn and master one of these processes.
These best practices have been extensively empirically validated. Based on our experience, they can be transformative for wealth managers. Moreover, we are confident that you know these best practices, as they are not new or novel. Still, few wealth managers are implementing them well. It takes concerted effort and practice to take these best practices and make them work. We have found that most wealth managers are unwilling to commit, giving you an enormous advantage if you make the requisite commitment.
Russ Alan Prince is the executive director of Private Wealth and a strategist for family offices and the ultra-wealthy. He has co-authored 70 books in the field, including Making Smart Decisions: How Ultra-Wealthy Families Get Superior Wealth Planning Results.