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Practice Management > Building Your Business

Time to Make a New Plan

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It’s ironic, but in my experience there’s no part of business management more misunderstood by financial planners than strategic planning. Time and again, I hear advisors lamenting that running their practices leaves little time to waste on academic theories and musing about the “big picture.” Maybe when their practice is more successful, they say, there will be some time for strategic thinking. They don’t realize how much they sound like would-be planning clients who want to wait until they “have some money” before they go see a financial advisor.

The truth of the matter is that strategic planning for an advisory practice is not very different from the process of financial planning for an individual client–and just as crucial. Where do you want to be at some point in the future? What’s the best route to get there, all things considered? What are the gaps and obstacles that are preventing you from achieving your goals? What steps can you take to close those gaps and overcome those obstacles?

And just like financial planning, the process of strategic planning is not really about vague concepts such as finding your vision and defining your mission. Rather, a good strategic plan gives you a framework to identify what specific actions you need to take to achieve your business and personal goals, gives you focus so that you don’t dilute your limited resources, and ultimately, helps you clarify how you will differentiate you and your firm in the market you wish to master.

Just Do It

Although strategic planning is one of those tasks that can only get better as you devote more time to it, it doesn’t have to be a long, drawn-out process. In fact, you can probably answer the key questions over a long lunch or two. And with the insight you’ll gain from finding the right answers for you and your business, the steps you need to take will, in most cases, be obvious.

To understand your business better, try looking at it from various points of view. For most advisory firms, there are four critical perspectives:

o Your marketplace

o Your competition

o Your current capabilities

o Your personal definition of success

Whether you go through a formal strategic planning process or not, it is important that you periodically revisit these points to position your business for the future. Here are some exercises to help you better visualize your practice from these perspectives:

Your Marketplace. Write down the names of your top 20 to 30 clients. Not just the most profitable, but those clients whom you enjoy the most, and who also happen to be among your top revenue generators. Then, list the characteristics of these clients: their age, occupation or preoccupation, location, net worth and income, special interests and special issues, how they became your client, and so forth. See if you can identify a common thread in this client base. Your goal is to discover what factors you can focus on to replicate your ideal client base many times over.

In addition to trying to find the common thread, also project what issues these types of clients are likely to face in the future. What do these issues tell you about the products and services you should be offering your clients to serve their needs? This exercise will form the basis for positioning you and your firm in your clients’ (and prospective clients’) eyes.

Your Competition. As with your marketplace, it is also a good idea to write down the names of your top five to ten competitors. While your inclination may be to say, “I don’t have any competition,” that is obviously an illusion fostered by a lack of competitive situations to procure clients. Face it: if you didn’t have any competition, you would have all the clients in your target market. The question isn’t whether clients would be better off coming to you, rather, ask yourself why some of them go instead to other firms.

By identifying the firms that also are serving your clients in your market, you are beginning to do market research. To take the next step, log on to their Web sites, clip their ads, ask their clients and your prospects about them. Your objective is to discover what makes them attractive, to determine what makes them compelling as an advisory firm. Then ask yourself if you can do better. Or should you to find a way to differentiate from them? Only in very rare instances will you be so much better at what you do, and in a demonstrable way, that you can build a marketing strategy around your dominance. In most instances, it’s much easier for prospective clients to understand that you offer something different, or for a different group of people, or both.

Your Core Capabilities. It used to be a mantra that advisors should build their businesses around their core capabilities. While this is an important perspective, it is not the only one. After all, it’s also important to offer skills that someone wants and needs. By assessing your strong and weak areas, you can identify the gaps in your practice management and service offering. This is where you ask yourself difficult questions about your depth, expertise, responsiveness, talent, even your motivations and interests. The answers will tell you the capabilities you can build on as a firm, and what actions you can take to shore up your weaknesses.

Your Personal Definition of Success. This is the one non-negotiable step. To formulate any kind of plan, or attain any level of success, you have to have a clear vision of what you need and want to get out of your business. What is personally fulfilling to you? Is it gaining more time or money or greater personal development? Is it the desire to own and operate a larger business? Is it the ability to spend more time away from the business? When you begin to explore these issues, you’ll probably discover that you are not practicing in a way that truly fulfills your vision of success. The question you have to answer is: What strategic choices can I make to achieve fulfillment?

If you are part of a larger organization such as a bank, an accounting firm, an insurance company, or even a large advisory firm, you also will have to answer this question about success from a corporate perspective: What would the parent firm define as “success,” and how does this impact your personal strategy?

Tying it Together

A one-dimensional strategy will likely lead you in the wrong direction. But one that incorporates your choices from these four critical perspectives will allow you to have a four-dimensional view of what your business is going to look like in the future.

When you examine the implications from these four perspectives, your priorities will begin to take shape. Be honest with yourself about what’s most important to you, as you work through whom you want as clients, what you have to offer them, what others are offering, and what you need to get out of your work. Eventually, you will land on a primary goal that is supported by the other goals. This will serve as your framework for making future business decisions. It will also help you to take off the table some things that have been distractions: perhaps adding the wrong business lines, or staff who don’t really serve your core clients, or even the acceptance of certain clients who, while profitable, just aren’t folks you want to work with.


While most advisors never get around to devising a strategic plan, the next pitfall after you have one is implementing it. Contrary to what you might think, procrastination is not the problem: once advisors have a vision of what their practice could be, they want to create it, often too quickly. When implementing a strategic plan, it is more important to make incremental progress. The temptation is to take giant steps when baby steps will do.

To make this process a reality, focus on the changes that you can accomplish within the next year. Identify the resources you will need to complete those objectives, assign accountability to appropriate staff or management, and set a timeline. With seamless integration of these changes as a goal, we’ve seen the most successful firms create a schedule that details when each change will take place, who will be involved, and what resources will be required. Once down on paper, it’s relatively easy to see if any one person will be overwhelmed, or if any task will require more attention to be completed.

For example, if all of the tasks on your list are scheduled for completion in the first quarter, and only one person is made accountable to complete these tasks, you will fail. What doesn’t make it to your list this first year can be rolled over into the second year. Effective business management requires that you continuously address the issues that require attention, but also requires that you recognize not every action carries equal weight.

The success of the execution of your plan depends on five factors, which can be condensed into the acronym SMART: that is, every change you plan to make needs to be Specific, Measurable, Agreed-Upon, Realistic, and Trackable. And I can’t emphasize enough the final objective. When managers regularly track progress toward stated goals, the incidence of accomplishing those goals increases exponentially. Not only have you communicated how serious you are about reaching them, you’ve created a public forum to display success or failure. Most team members will be motivated to be sure it’s a success.

Like a financial plan, a good strategic plan focuses on a vision–where do you want your business to be? The operational plan focuses on the implementation steps. Many firms jump to implementation before they have defined their strategy, and this leads to a lot of wasted time, energy, and money. Just as you are able to say to your financial planning clients, “investments out of context are accidents waiting to happen,” this same principle applies to your business. You have finite resources of time, money, management and energy. How will you concentrate them to create the greatest momentum in your business?


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