Years ago, advisor Austin Collins had several audacious business goals—including building a practice that generated significant recurring revenue, working with a small group of ideal clients, and providing those clients with a level of value that was better and more meaningful than they could get anywhere else.
There was just one problem: “I didn’t know how I was going to do any of that,” laughs Collins, founding principal of Integrated Wealth Advisors in Bellevue, Washington. “I didn’t even know what a practice with those attributes looked like!”
Today, those goals have become Collins’ day-to-day reality—an outcome he credits mainly to his decision to implement a virtual family office business model.
This VFO approach empowers him to bring together expertise in a broad range of issues that affluent clients want help with, and coordinate the efforts of approximately 80 professionals in his network—including CPAs, estate planning attorneys, investment bankers and others—to deliver tremendous value. “The VFO model allows me to have a larger and more meaningful impact for the people who I work with because I'm now able to build customized professional teams for each client,” says Collins. “That’s really what’s allowed me to grow in the right way.”
More Recurring Revenue, Fewer Clients
Collins ensures he delivers VFO-based solutions to the ideal affluent clients—who for him include owners of companies valued between $3 million and $20 million who are considering a full or partial exit within five years. By focusing on that select group, Collins can generate the amount of annual recurring revenue he needs (at least $25,000 per new client) without having to serve hundreds of people.
“I’ve gone from 130 clients to just over 50 today, and taken recurring revenue from around $100,000 to $1 million,” he says. “It’s very efficient in terms of growth trajectory and profitability.”
What’s more, the clear and compelling value that the VFO-based model brings to clients’ lives makes those clients eager to introduce their friends and colleagues to Collins. “All of that growth has come from referrals,” he notes.
Making It Happen
Collins offers some key pieces of advice for advisors seeking to implement a VFO model in their own practices.
1. Start small and build up. Collins initially built a modest-size team of experts to ensure he could work well with them on behalf of clients’ best interests before aiming to create a full-on VFO. His initial team consisted of a CPA, real estate agent, property and casualty insurance agent, mortgage broker and an estate planning attorney. Today, it’s expanded to include specialists in fields including business, health care and even lifestyle concerns. That’s empowered Collins to support clients through multiple business transactions, retirement transitions, legal challenges and other needs. He also has relationships with multiple experts in certain disciplines (such as accounting) so he can bring the exact right skill set into a particular client scenario.
2. Make the commitment. In Collins’ opinion, a VFO can’t deliver tremendous benefits—to clients or to advisors—if it’s merely an ancillary component of a practice. Instead, it needs to be the central part of the business and the key focus of everyone involved. That means taking the time to identify and interview lots of potential professionals in order to find the best ones for your specific needs. Having as many conversations with experts as you can will help you identify more opportunities to assemble a VFO-based team. Doing casework with those professionals will help them understand when to refer you, and it will help you learn when each particular professional should be brought in to work on client cases.
3. Seek guidance from the advisor community. Collins is part of a mastermind group of other experienced advisors looking to accelerate their success, and he emphasizes that the connections he’s made through it have been key assets in his efforts to build a world-class VFO. “I have standing calls now with six different advisors in my group, and we all help each other pursue our biggest goals,” he says.
Ultimately, Collins has designed a business that enables him to bring amazing value to his clients and his VFO professional partners—and get off the treadmill of constant marketing so he can spend more time living a life of significance.
John J. Bowen Jr. is CEO of CEG Worldwide and CEG Insights. Join the "Play to Win" consultation; it's your guide to wealth management success. Capture high-net-worth clients, move upmarket, unlock your potential now!