What Advanced Planning Is–And Is Not
With the financial services industry in turmoil, producers are scrambling to find the optimal approach for creating and maintaining a (very) successful practice.
In their effort to do so, some mistakes have been made; some have been trying, ineffectually, to sell their practices and others have been striving to create a multi-disciplinary practice.
Lets pause to define just what a (very) successful practice is. Once we can define success objectively, we will be able to pick out the business models producers can rely on to achieve such success.
We can start with a definition of a (very) successful practice everyone will agree with. That is, a (very) successful practice is one in which personal income is $1 million or more per year, consistently. These producers are members of an exceptionally select “club” of professional advisors–the million dollar club.
The members of this club have incomes that start at $1 million per year. Most of them have incomes substantially greater than this. If we can agree that a good definition of success is personal income in excess of $1 million, we can begin to explore just what it will take for other producers to join this club.
If you start with this objective, there really are very few business models that will get producers there.
One that will is advanced planning.
Lets lay out exactly what advanced planning is and what it is not.
One problem with defining advanced planning is that most producers think they are doing it. Ask any group of producers whether or not they are advanced planners, and 80% or more will say they are. In addition, most insurance companies and many attorneys, accountants, private bankers and stock brokerage firms all claim to be active in the field of advanced planning.
When we delve a little deeper, however, few of these producers and institutions agree on a workable definition of advanced planning. As it is currently used, advanced planning often gets confused with everything from selling a few big cases to comprehensive wealth management.
The best way of achieving clarity on the definition of advanced planning is to define advanced planning as the approach used by producers with (very) successful practices and high personal incomes.
Lets look at what it is these producers do.
Defining “Real” Advanced Planning
As implemented by the most successful producers, advanced planning is composed of four interrelated sets of services: