Early this month, Waltham, Mass-based Commonwealth Financial Network expects to begin the third year of a practice-management program that is nearly doubling revenue growth for advisors. Other independent broker-dealers also have a variety of practice-management initiatives underway to increase sales. The key, experts say, is to make a truly serious commitment to such efforts -- and get brokers to do the same.
"Securities America and Commonwealth have it right," says Chip Roame of Tiburon Strategic Advisors. "They are the best, the top in class when it comes to helping reps build their business." These efforts, he notes, emphasize benchmarking, marketing and
In 2004, Commonwealth started a practice-management program for a group of about 25 of its 1,000-plus advisors. The sessions took place every two weeks on the phone for the last nine months of the year.
Commonwealth expanded the program to the Web in 2005 and asked reps to make a formal, signed commitment to the phone- and Internet-based curriculum, which included bi-weekly PowerPoint presentations and discussions organized and led by participants. "Reps hear things well from other reps," explains Joni Youngwirth, vice president of practice management for Commonwealth.
The advisors were broken up into four groups of individuals with similar production levels. "We wanted people to be committed," Youngwirth explains. "We didn't want people to take it lightly." And, apparently, they didn't. Commonwealth advisors in the 2005 program earning between $300,000 and $425,000 in 2004 grew their sales by an average 17 percent vs. 5 percent for those not in the program. Advisors earning between $200,000 and $299,999 expanded results by 14 percent vs. 10 percent for their peers.
These results have prompted Commonwealth to do the program again this year. And some advisors who participated in '05 may sign up for another round in '06.
"The program changed my approach to the business last year by sharpening my focus" on growing production, says Charles Brown of Capital Financial Advisors in Wellesley, Mass., which has five staff members, some 200 clients and $50 million in assets under management. This focus can be tough to maintain, Brown adds, since advisors today "are pulled in so many different directions." The program "really made me allocate time to this part of the business," he says, referring to production growth.
And that turns out to be time well spent. In Brown's case, growth domestic
concessions rose 33 percent in 2005 over 2004.
Of the eight reps in Brown's practice-management group, "We all hit our realistic goal. And many hit our 'stretch goal,' " he explains. "The specific topics we went over every two weeks were valuable. But you can't underestimate the power of the more intangible aspects of the program: having a goal to focus on and being accountable to each other."
Scott English of Ford, English Financial Group in Utica, N.Y, says he appreciated his group's focus on ways advisors could obtain more of a client's assets, for instance, and ways they could stop working with clients that had limited assets. "By discussing what other advisors had done, you didn't have to reinvent the wheel," English explains. "Other advisors were glad to share their experience.
The '05 program was "fantastic," English says, "because you could gain from the different areas of expertise for your own organization." English saw his production rise nearly 14 percent last year.
In addition to increasing production, each participant could focus on another professional or personal goal -- such as wrapping up the business day by 5 p.m. or getting more exercise, says Youngwirth. "We generally introduce what the reps suggest, and certain people were asking for a program with accountability," she explains. In addition to this practice-management work, Commonwealth sets up sessions between junior and senior advisors and between an expert and several advisors with the same production level.
The independent broker-dealer expects to structure its nine-month program somewhat differently this year -- with three groups of about 10 people each. In addition, it will continue to offer all advisors a "Winning Ways" teleconference once a month on a specific business-practice topic and may roll out a program related to business succession planning and the development of more junior advisors. Its "Hot Topic" program takes place live and in person each quarter with an emphasis on business planning.
"What advisors really value [in the nine-month program] is the connection to other people and colleagues and the structured, efficient call," Youngwirth says.
For Securities America of Omaha, Neb., traveling consultants fit the bill. "We do about eight to 12 weeks of pre-work by phone and then two to five days on site," explains Laurie Burkhard, a senior consultant in practice management for Securities America. "After this, we produce a written, comprehensive 120-page recommendation." Advisors and staff then get 10 months of phone-based coaching, which takes place at least once a month.
"It is not a cookie-cutter program," says Burkhard, who is based in Seattle. "And the office or branch takes the lead in determining what they want to get out of it." About 24 offices participate in this practice-management program each year.
What are they asked to do with that 120-page report? "It includes an 'action checklist' and other follow-up work," the consultant explains. "We know they have a business to run and can only handle two or three items at a time. If we ask too much, they will just return to their old habits. The idea is to take it slowly."
And what happens when the 12-month program is up? "We're always available," says Burkhard. "We can do hourly ongoing coaching and checkups. They're not just cut lose at the end."
Sue and Fritz Brauner of the Brauner Company in Foster City, Calif., are wrapping up their 12-month program and plan to continue working with Burkhard once a month. "At first, our staff was hesitant," explains Sue. "But now, they couldn't be happier with the conference calls. The program is really, really rewarding."
The Brauners have completed work on their top priorities and are now going through the rest of their checklist -- one item at a time. "All the items are good," says Fritz. "And it is very helpful to have someone check in with you once a month and see how it's going. This is exactly what we do with our clients:
Provide a big picture that is also very detailed, and keep you focused and stay after you -- in a friendly way."
One "to do" item that's proven quite helpful has been a client-profitability analysis of the Brauners' practice, which includes about 400 clients and $150 million under management. Other meaningful tasks include hosting a client-appreciation event, working on a financial plan with each employee and doing a client-satisfaction survey.
"The point of the program isn't to give you more to do, but to make sure you are doing the right things at the right times," stresses Fritz.
That can lead to the "right results." Securities America has found that in the past few years, the program has helped advisors boost overall productivity by more than 25 percent on average -- and fee-based revenues by more than 60 percent. Advisors in the 12-month program in 2003 grew fees by nearly 71 percent in 2004, and those in the 2004 program expanded these revenues by 64 percent. The independent b/d intends to carefully track these and other results of its reps carefully in the years ahead to further enhance its practice-management programs.
Securities America also offers live web-training programs twice a week, which 1,000 reps and staff participated in last year. So far this year, some 425 individuals have joined the live webcasts, which emphasize topics like charitable planning and preparing for tax season.
The independent b/d also hosts in-person strategic discussion groups on a quarterly basis at different locations for 10-15 advisors at a time. "In the morning we meet with an expert," says Burkhard, "and in the afternoon, we review and set up accountability" between the participants. In 2005, for instance, there were two groups that met four times (once each quarter) and had 12 members each.
The broker-dealer -- which includes some 1,800 advisors -- is getting good feedback on this group work, according to Burkhard. "To be able to discuss issues with peers and with accountability is just huge. And the expert leaders help make the events more structured than a conference," she explains.
This year, Securities America will be adding a third strategic-discussion group to its agenda. It will also launch new monthly series of webcasts on topics like jump-starting a marketing plan and succession planning.