Practice management tips: Start playing football, Pt. 3

By Katherine Vessenes

Vestment Advisors

This is the last in a three-part series of articles explaining how practice management for financial advisors and broker/dealers is a lot like sports.

Be sure to read part one and part two. Are you playing golf, basketball or football? Here are some questions to ask yourself to determine where your practice is and how to get it to the next level. Put a check mark in each box that sounds like it describes you and your business. Then add up each column to see where you stand today. The column with the most checks wins.

1You answer your own phonesSomeone screens the calls for youSomeone screens your calls and handles all the service issues. You rarely are needed for service
2You prepare all the paperwork necessary for a client meeting and to submit the businessStaff assists you with the paperworkYou never touch the paperwork and rarely even look at it
3No staff or no job descriptionsStaff has no job descriptionsAll your staff have clearly written job descriptions.
4All the money in the checkbook is yours and you treat the practice like your own piggy bankYou have separate checkbooks for personal and business fundsYou pay yourself a salary and take bonuses based on profitability
5No staff or limited staff focusing on what you don’t like to do.Staff is not clear what to do to support you and bring in more business.You and your employees have clearly defined positions.
6No bonusesStaff receives bonuses irregularly based on your discretion.Staff receives bonuses based on profitability.
7Clients call and always ask for you.Clients call and ask for you 80% of the time.Clients call and ask for one of your service team. You get called less than 20% of the time.
8You have no defined process or procedures. Every case is a one-off.Some parts of the business are systematized, others aren’t. Lots of things are falling through the cracks.The entire business is systematized. Someone other than you manages all the systems and it is very rare for anything to fall through the cracks.
9You don’t need any reports because you are the report!Staff are not organized enough to provide reports and don’t know what to track.Staff provides you periodic reports on the key areas of the business: compliance, technology, sales, marketing, HR, company financials, processes/procedures and strategic planning
10You are very dissatisfied because you know you could be happier and making more money, you just don’t know where start.You work crazy hours and are constantly waking up in the middle of the night fretting about the business.You sleep like a baby, knowing you have a great business and a steady flow of income.

Now that you know where you really stand, take some time to think about what kind of business you would like in the future. Take a look at each of your answers above, and see if you can move to the next step across the row. Every incremental step should bring you more relief and more income.

It is much more difficult to move a financial advisory practice from basketball to football than golf to basketball. The transition can be overwhelming. This is a hurdle few advisors are able to manage. Most of the ones who do need help from a coach or consultant. We tell all of our clients to think of this as eating an elephant, we need to do it one bite at a time.

With our practice management clients, we have found most advisors take 18 to 24 months to completely transition to football. The good news: they are usually making more money after four months, and after 12 they are making a lot more money.

Take the case of Steve Gordon out of Colorado Springs. Steve is a real advisor, but we have changed his name and a few facts to protect his privacy.

When we first started working with him, four years ago, he was 28 years old and was generating about $300,000 in annual revenue. His brother, Sam, was assisting part time as a client service manager/Para planner and he had Marie as a part time administrative assistant. Four years later Steve’s personal production was up to $1 million. He also owns the entire company and now has more than a dozen reps in his organization and a staff of 30. The company’s total gross production this year is estimated to be $8 million. Next year the business should be valued at $10 million.

How did Steve move from a successful practice to a wildly successful business? There are a number of factors that contributed to his success. Here is what we consider the top ones:
    1. He was humble enough to ask for help. He knew he had never done this before and he was willing to spend the money on consultants/coaches to help him reach his goals.

    2. From the beginning, he treated it like a business.

    3. He has a marketing system that puts a steady stream of derrières in chairs. It is not inexpensive, but it does work. He frequently says, getting in front of more clients is not his problem.

    4. He perfected his sales process, carefully tracking the numbers to make sure he could predict how many new prospects and clients they would secure every year. This figure allowed them to predict their income, expenses and profit.
The good news for you: Even small changes can have a huge impact on your bottom line and the value of your business.