Prosperity Strategy 2008

Forget about 2007. It’s mostly too late to do anything about it. Instead, let’s implement a strategy now that will pay off big in 2008.

A “strategy” is a detailed plan of action to achieve a goal. As you think about 2007 and beyond, at least one of your goals should be to survive and prosper in business.

Remember when you started college and the person welcoming you to the school told you to look at the person on either side of you because one of them wouldn’t be there in four years? Look around. While I don’t know what the exact figures are, it’s much worse than that.

Of course, survival is relative. Some are severely threatened if they net less than $1 million. For others, survival means $60,000 a year and time to spend bird watching.

Since I first wrote the following eight-point strategy in 1989, thousands of advisors have implemented it to survive and prosper.

1. Maintain state-of-the-art know-how on investment strategies necessary to accomplish your clients’ financial objectives. This reflects a universal principle. If you run a photography business, the first step to ensure its survival would be to maintain state-of-the-art know-how on cameras and techniques to accomplish your clients’ photographic objectives.

Without the know-how, you don’t have anything to sell. But if you have only the know-how, you’re just an expert, unknown to anyone except yourself.

It’s the other points in the strategy that create a business.

2. Computerize. As fees and commissions trend down, it is imperative to improve productivity by using the computer’s ability to track large numbers of clients and prospects while standardizing and automating routine tasks.

Compared to five years ago, you have to manage more clients and more assets today just to stay even.

However, having a computer and being computerized are obviously two entirely different things. This means:

a. Maintaining a database to document every contact or contact attempt with a client or prospect.

b. Communicating with clients in the manner they prefer, i.e. fax, letter or e-mail.

c. Keeping track of all relationships within your client base.

d. Automating common business processes such as those generated by new referrals, new clients and new opportunities.

e. Creating a complete library of pre-written, compliance-approved messages for virtually all recurring situations.

f. Assigning tasks to staff and building a system for knowing when they have been done.

3. Master alternate channels of communication. In days gone by, the telephone was the primary communication channel. But with the advent of the “Do Not Call” list, answering machines and Caller ID, an advisor can no longer rely on the telephone even to contact clients, much less prospects. At a minimum, an advisor must be able to reach people by letter, fax and e-mail. Text messaging and Web conferencing are also viable channels.

4. Manage your time expertly. You have exactly the same amount of time as your competitors. Those who spend time wisely make it to the winner’s circle. Those who squander it go to the advisor graveyard.

“Expert time management” means doing those things for which you get paid, i.e., talking to clients and prospects and preparing for such meetings. Delegate everything else.

5. Build a support team to let you delegate non-sales, non-investment functions. Twenty years ago, I concluded that nobody makes it to high six or seven figures without a team. As an advisor, a financial advisor was worth at least $1,000 an hour, or $2 million a year. If you were doing less than this, you were doing other people’s work.

Back then, mutual fund and limited partnership commissions were 8 percent. It’s even truer today. It is vital that you get help as quickly as possible in order to spend your time talking to clients and prospects. It is essential to have people to whom you can delegate the non-sales functions.