Even before the market downturn, if you subtract portfolio appreciation and the acquisitions of other investment firms, relatively few financial advisors have meaningfully increased their revenues over the last five plus years. In fact, such calculations would show that a percentage of them were actually sliding backwards during this time. That is, they did not grow organically and their revenues would have decreased.
Maybe your clients’ portfolios managed to avoid severe losses and maybe they will continue to appreciate. Maybe you’ll find advisors with books of businesses you can buy at a discount. If so, then you may not need to pay much, if any, attention to client-focused business development. On the other hand, if you want to assuredly grow your financial advisory practice in any environment (up markets and especially down markets), client-focused business development is a necessity.
Simply: client-focused business development is where you get substantially more business from current clients as well as create a pipeline of new high-quality clients (i.e., organic growth). By mastering the methodology I’ll describe, many financial advisors can double their revenues within two years. This is possible in this time of a pandemic. Sounds great! Before you open the champagne or purchase that new home, let’s review the requirements (there are always requirements).
Requirements
To begin with, the application of this methodology is by individual financial advisors. It can also encompass that advisor’s team. It’s not about corporate strategy. It’s all about your ability to excel in the trenches. It’s about your ability to get superior business-based results when dealing with prospects, clients and other professionals.
Revenue requirement: To double your revenue, your current annual revenue is a minimum of $300,000 to a maximum of $850,000. This range covers a large percentage of experienced financial advisors. While the methodology can work for just about every financial advisor, you must have a certain level of proficiency. Usually, but not always, financial advisors with less than $300,000 in annual revenues fail to have the necessary systems in place, skills, experience or expertise.
As for the maximum, you can potentially double your annual revenue if you earn $1 million or $2 million, $5 million or more. Because of the higher base (e.g., $2 million versus $850,000), doubling becomes harder, but, even if you don’t double, you’ll probably find the dollar increases are quite considerable. It’s just more likely that financial advisors with revenue within this range are able to double their revenues within two years.
Wealth management requirement: You have to be able to provide a range of expertise. This means you have to be adept at helping clients address financial and related concerns that extend beyond investment management. It doesn’t mean you are being compensated on other financial products such as life insurance or credit. You, nevertheless, must know about other financial products and related legal services and be able to spot opportunities and constructively talk about them. There are ways to get the revenue increases I’m talking about even if ALL your revenue is derived exclusively from money management fees.
The pandemic will diminish within the next two years: Whatever the reasons, the severity of the current crisis will be meaningfully less. Either because we now have viable treatments and possibly a vaccine, “shelter in place” orders, for example, are not pervasive. I’m not saying everything went back to the way it was before the crisis, just that circumstances are not as bad as they are today.
Access to other professionals: You will need access to other professionals, such as attorneys and accountants, who can potentially refer you individuals, families or businesses. By using the Everyone Wins Process, you’ll find out if their clients would benefit from working with you and—very importantly—how to work with them so they refer you their best clients.
The Everyone Wins Process: So much for the easy requirements. Let’s now turn to the one that torpedoes most financial advisors. You have to adopt a methodology—the Everyone Wins Process—which was derived from the best practices of leading ultra-wealthy entrepreneurs. It’s a methodology that is both inherent in the accomplishments of successful financial advisors and also somewhat alien to many of them. Commonly, by embracing the Everyone Wins Process, financial advisors think and act differently than the majority of their peers.