The first days of January can set the tone for how an advisor’s practice will run for the next year. Do you expect this year to be different and more successful from the year before? If so, you may need to make some changes in your practice to get the results you seek. To kick off 2006, we created a list of four resolutions you should consider for a happier and more prosperous new year. The list covers some of the most critical areas of your firm, namely financial management, client relationship and business planning, and highlights some of the more important topics we brought to you in 2005.

1. Resolve to spend more time with the clients and build closer relationships with them. Our studies reveal that those advisors who spend more than 60% of their time with clients were eight times more profitable than those who spent less than 30% of their time with clients. While, there are many competing priorities in your business, it’s essential to manage your time wisely. A majority of advisors (61%) believe that trustworthiness is the most important reason why clients selected them. Build that trust via meeting with clients often enough to develop close relationships with them.

2. Resolve to put a business plan and succession in place. As with any endeavor you start, a plan which details your goals, milestones and tactics gives you a greater chance of achieving your objectives. Take it from the advisors who know–81% of advisors who have a biz plan do not consider the “need to work on and in business simultaneously” as a threat to their business. You also need a succession plan or exit strategy in place. Think about who might purchase your practice–a current partner or employee or possible another firm that you know of. By putting a plan in place and thinking about how such a transition might be financed will help you prepare for the next phase of your life. Even if you don’t plan on leaving your practice for many years, it’s always a good idea to have a plan in place, just in case.

3. Resolve to seek out professional referrals. Our research shows that advisors who have partnerships in place with CPAs generate on average twice as many referrals as those who don’t. Employ a more proactive approach to generate referrals from other professionals (lawyers, accountants and other advisors), when appropriate.

4. Resolve to educate yourself on alternative investments. Did you know that 42% of mutual fund investors have never heard of an inverse mutual fund? That 29% don’t know what an ETF is? How about that 26% of fund investors don’t know what a sector fund is and 22% don’t know what managed futures are? These are all findings from a survey of individual mutual fund investors done by Rydex in mid-2006. The percentage of RIAs using ETFs jumped 40% from the previous year (42% compared to just 30.7% in 2003). ETFs also comprise nearly 7% of assets for the average RIA. If you haven’t already, consider broadening your investment expertise in some of the alternative investments and stay close to your clients to discuss their expectations and the current market environment to make sure they’re aligned. Investors clearly need help with education and you can help them.

To show you how these four resolutions can truly help you in 2006, we analyzed how a combination of these strategies–spending more than 30% of their time with clients, having business plans in place, seeking professional referrals, educating yourself on alternative investments–correlates with profitability. The results show that those companies who take advantage of all four action items are the most profitable ones. However, just one of five firms took advantage of three of the four strategies and only one in six firms implemented of all four tactics.

Opportunities produce results and growth. The four resolutions outlined here are quick check items that are not meant to be comprehensive. Instead they are goals you should consider adding into your plan for next year to enhance your firm’s success. And if the market cooperates, maybe 2006 will be an even better year.