It’s no secret that the past few years have been challenging for financial advisors. Many are still reeling from the loss of investor confidence and drop in assets incited by the market turmoil of 2008. Even though we saw the beginnings of the recovery in 2009, numerous advisors are struggling to claw their way back to pre-recession production levels. Here’s the good news: It’s a new year, the recovery is in full swing, optimism is at a high, and you can make 2011 your best year yet! How? In this article, we are going to outline two specific steps you can take to ensure your success. Don’t discount these just because you may have heard them before. Taking these action steps now is one of the best investments you can make in the future of your business.
Define Your Goals and Commit Them to Paper
A first century philosopher said, “If a man does not know what harbor he is making for, no wind is the right wind.” How true that statement is! As financial advisors, we understand the value of setting goals better than most people. Think about how often we sit down with our clients to help them define their goals, outline a plan to reach those goals, and then monitor their progress to ensure they are moving in the right direction. It’s what we get paid to do. And yet, ironically, many financial advisors have never sat down and created tangible goals for themselves and their practice.
A recent study by Advisors Trusted Advisor shows that advisors who set regular, realistic goals for their practice are the ones who are most successful. However, only 37% of survey respondents said they satisfactorily set new business goals, and just 35% have written business development plans. Those who answered positively in these two areas said they were realizing "much higher" or "higher" numbers of new prospects and more overall satisfaction in business growth.
At this point, you should probably get out a piece of paper and a pen so you can write your goals down. Goals that aren’t on paper are only fantasies.
So what kind of goals should you have? First of all, you need a combination of short-term and long-term goals. While it’s fairly easy to focus on the big picture of where you want your practice to be in 10 years, you must first know where you want to be by the end of this year. And in order to reach your one-year goal, you should break it into monthly or quarterly goals.
The following are some solid goals you might consider adopting. Notice that they are specific, measurable, achievable and time-constrained, thus possessing the ingredients of manageable goals.
- By the end of the year, I will have $___,___,___.00 in assets under management.
- This year, I will reach a production level of $___,___.00 in GDC.
- By the end of the year, the net cash flow into my business will be $___,___.00
- I will lower my office expenses, thus increasing my profit margin by ___% by the end of the year.
- I will convert ___ referrals into clients by the end of the year.
As you will notice, all of these are annual goals. The next step is to break them down into monthly or quarterly segments. For example:
- Each month, I will reach a production level of $___,___.00 in GDC.
- Each month, I will seek out ___ referrals from existing clients, which, based on my closing ratio, will yield ___ new clients.
These are only a few examples of the types of goals you can set. Other goals may relate to the systemization of your practice, staffing needs, or your quality of life. Whatever your goals are, once you have committed them to paper, your next step is to develop a plan that will ensure you reach them.
Because time will not allow us to discuss every possible goal you could set, let’s take just one area of practice management and show how you could develop a worthwhile plan.
Increasing your production level through referrals – A Sample Plan
The second step to ensuring your success in 2011 is increasing your production levels through referrals. Building a steady referral stream doesn’t happen on its own. It requires that a specific set of steps be taken. In fact, if the proper foundation has not been laid in advance, asking for referrals can be an exercise in futility. So what kind of plan is required to help you get more referrals?
1. I will improve the level of service I provide my clients so that I will make myself more referable. To accomplish this, I will implement new procedures in my practice that will ensure a consistent, high-quality experience. I will implement the following procedures…
Have you ever had such an outstanding dining experience that you simply had to tell your friends and family about it? If so, then you understand the power of systems. From the moment a client pulls into your parking lot, it should be evident that you run an impeccable organization. Every detail of your office, every interaction they share with your staff, every service issue you help them resolve, must be flawless. This is not something that happens by accident. The only way to create a consistent, high-quality experience is to have the right procedures in place. You might ask yourself: Do I have a step-by-step procedure covering everything that should happen when I take on a new client? Do I have written service standards in place? Do I have a system for recognizing my clients on special occasions such as wedding anniversaries? By having such procedures in place, you can create a memorable experience for clients and prospects that interact with your firm, thus making you more referable.
2. To help my clients remember to refer their friends, family and colleagues to me, I am going to communicate with them more often. Because different types of communications appeal to different types of people, I am going to use a variety of tools in my communication strategy. Through my communications, I will remind them how important referrals are to my business. I will implement the following communications…
Once your clients are impressed with the level of service you provide, your next responsibility is to ensure they don’t forget about you. The old adage "out of sight, out of mind" is certainly true when it comes to getting referrals. Equally, if you make it a point to stay in front of your clients constantly, they will always have you in mind. This way, when their neighbor is complaining that he never hears from his advisor, your client will be quick to say, “You should talk to my advisor, I hear from him all the time.”
What communications should be included in an effective communication plan? On a basic level, sending a weekly market update will keep you in front of your clients. Each week they get to see your name, your logo, and a referral reminder in their inbox. This simple communication serves several purposes. It helps you educate your clients, it gives them an easy way to forward your information to referrals, and it brands you as an expert in your field. You can even include non-financial related items such as recipes or golf tips to increase readership. Recently, new technologies have even made it possible to send video messages to your clients.
When new legislation or important financial news makes headlines, you are presented with the perfect opportunity to make an impact on your clients and prospects. Back in July when the Dodd-Frank bill passed, did you send your clients a communication about it? When Obama signed the tax extensions into law on Dec. 17, did you inform your clients about what impact that legislation would have on them? Creating special whitepapers or newsletters when such events occur is a powerful way to make an impression.
And of course, the most important way to communicate with your clients is face-to-face. Scheduling regular reviews, a minimum of twice each year, ensures they are getting the attention they deserve.
3. Once I have the right systems in place and my clients are hearing from me regularly, I will have laid the groundwork necessary to get more referrals. To create the perfect forum for my clients to introduce their referrals to me, I will host regular client events.
Giving your clients a stack of business cards to pass out or sliding a phone book across the table and asking them for names doesn’t work anymore. And while asking for referrals directly can yield marginal success, hosting client events is a superior way. By holding prospecting events, you make it easier for your clients to introduce people to you. Put yourself in their shoes: Don’t you think it would be easier for you to invite a friend to a wine tasting, a golf clinic, or an economic forecast meeting than to tell them they need to call your financial advisor? Of course!
There are basically two types of client events. There are what we refer to as "I know" events and "I care" events. "I know" events are educational presentations that establish your expertise. Hosting such a meeting each January lets you sum up the stock market and the economy from the previous year and share what leading economists are predicting for the year ahead. Another logical follow-up is a mid-year presentation where you analyze how the year is shaping up so far and talk about what economists predict for the balance of the year. You can also host special educational presentations on topics like identity theft. Such events providea venue for clients to bring guests to meet you in person.
"I care" events are intimate social events. They can be held at your home, office, or another location, and can be about anything you enjoy. Sports, food, drink, pets, shopping - the possibilities are endless. These types of events should be intimate, and small enough to allow you to mingle with each client and their guest.
As you begin planning your first event, remember that effective client events share fourbasic elements:
- They are either entertaining or educational in nature so everyone who attends will benefit in some way.
- They are advertised well in advance with attractive marketing materials.
- Attendees are strongly encouraged to bring guests, and are reminded of this more than once.
- At the event, there is an organized way to capture information from guests who attend, and for them to request an appointment so their interest doesn’t have time to cool off.
Through this example, we hope you can see that 2011 has the potential to be your best year yet. Why not get started today? Set your goals, commit them to paper, and develop a plan to make them a reality!