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.