With all of the hard work and responsibility that comes with operating a financial planning practice, advisors are focused more on the daily tasks they must complete just to ensure that the next day’s schedule does not become overloaded. Sometimes it seems that these small details are all we have time for in our practices.
While being task-oriented is certainly a necessary and important part of the business, it is critical that representatives also spend ample time exploring new business development strategies, evaluating their client service model and mapping out long-term goals.
Finding a balance between the strategic and tactical aspects of running your business is the essence of that elusive concept we call “practice management.” The term encompasses a number of topics, but all advisors must address 3 major issues to build a successful practice: managing compliance requirements; establishing a succession plan; and maintaining comprehensive knowledge of the industry.
Advisors shouldn’t be expected to face these significant challenges alone. An experienced broker-dealer partner can provide the high-touch support they need to ease the strain of running their practices, as well as provide strategies for achieving long-term goals. When you evaluate your broker-dealer relationship, you should consider how effectively it helps you address the 3 major practice management issues.
Today’s regulatory environment is moving so fast that it’s nearly impossible to keep pace with the changes. To give yourself a fighting chance, choose a broker-dealer that is forward-thinking in its evaluation and development of technology. Firms that can anticipate compliance changes and build applications that make it easier for advisors to navigate the regulatory landscape continue to separate themselves from the competition.
Ultimately, well-developed and properly used technology will enable advisors to realize considerable efficiencies in their practices. Furthermore, because the broker-dealer takes on the cost of building the technology as well as the cost of regular system upgrades and expansion initiatives, advisors can substantially reduce their compliance-related expenses.
Electronic signature (e-signature) technology is one example of a system enhancement that has made the lives of advisors much easier in recent years. We’re all familiar with the problems of a paper-laden business: forms that get lost, application pages that get separated, faxed copies of documents that are impossible to read, and file cabinets that are overflowing.
By creating a “paperless” environment that is fully integrated with the broker-dealer’s back office platform, e-signature allows advisors to spend more time attending to the needs of their clients, confident in the knowledge that their practices are in line with most current regulatory guidelines.
You may need to implement your succession plan unexpectedly, so it’s extremely important to know who will carry on your business if you are unable to do so, and that your clients will be taken care of. When preparing a succession or transition plan for your practice, it is best to seek a broker-dealer that can help guide the process. For example, a broker-dealer that partners with outside business succession planning specialists may have an edge over a less-experienced, in-house team that is experimenting with succession planning.
In the end, it’s necessary to work with a group of organized professionals who can ensure that both the pre- and post-transition activities are as seamless as possible to your clients. When the transition has been completed, you should have a “go-to” relationship manager at your partner firm who knows the intricacies of your business and can help the new team running your practice continue to realize efficiencies that will result in future growth.
Firms that form strong relationships with their representatives and have an in-depth understanding of each advisor’s practice are adept at identifying suitable partnerships and arranging succession plans that meet the needs of both the retiring advisor and the representative who will take over his or her business. The importance your broker-dealer places on succession planning and the quality of the support provided for the transition process is a good indicator of the broker-dealer’s commitment to your long-term success.
Another indicator of your firm’s dedication to helping you achieve your long-term goals is the breadth of educational support. Your broker-dealer should be committed to helping you develop more sophisticated knowledge so you can take your practice to the next level.
You should expect in-depth, onsite training on the broker-dealer’s technology platform, as well as comprehensive educational support on the firm’s product line. Because time is a valuable commodity for advisors, your broker-dealer’s training options should include online resources that are flexible to use in the course of your daily tasks.
It is also important to choose a firm that is ahead of the latest product innovations, with a keen eye on compliance issues that could ultimately impact the choices you make for your clients. A broker-dealer that proactively identifies industry trends and effectively communicates their relevance to representatives is a valuable partner to have in this rapidly evolving industry.
Take time to think about the future direction of your practice. If your broker-dealer is an advocate of your business, maximize that relationship for the benefit of your practice. If your broker-dealer seems adversarial and appears to limit your ability to run your practice effectively, it might be time to explore new options.
The real winner in a solid relationship between the advisor and his/her broker-dealer firm is the client. If your broker-dealer is truly “rep-centric,” your clients will recognize it and will likely choose to share in the good news.
If your broker-dealer’s regional managers are driven strictly by sales quotas or enforcing minimum production levels, you’re probably not getting the high-touch, personalized service you need to grow your business; and above all, the peace of mind of knowing that the eventual ownership transfer of your practice will run smoothly.
As your clients become more sophisticated, they will notice if you are not getting the customized support and the latest technologies from your broker-dealer partner–and they may very well choose to find an advisor who is.