Having just returned from a weekend of hiking Mount Washington in New Hampshire with my wife and two boys, both of whom are Boy Scouts working toward becoming Eagle Scouts, I am appreciative of the value of preparation, checklists, and trail maps. Mount Washington, although spectacularly beautiful, is known for its dangerously erratic weather. Without the proper planning and preparation, a hike on Mount Washington quickly can become treacherous. Nonetheless, we were surprised at the number of fellow hikers who we encountered who were clothed as if on a casual jaunt to the beach.
In a similar vein, I am continually surprised by the number of advisors who don’t spend time on their own professional development and preparation for their business growth. The irony of advisors who guide others, plan with clients, partner with other professionals in their communities, yet spend little planning time on themselves would be funny if not so tragic. You’ve heard the one about the cobbler’s children with no shoes. As a precursor to the planning process, advisors would be well served to take a measure of where their practice stands today. Comparing your business against top industry benchmarks can provide timely guidance for practice principals, like you, as part of the planning process.
Benchmarking Case Study: Charlie Prothro
A few years ago, Charlie Prothro of Charles Prothro Financial in Wichita Falls, Texas, took a look in the mirror and didn’t like what he saw.
“In this world, you are either ripe or rotting or green and growing,” Protho says. “I realized I was not fully delivering on the comprehensive wealth management solutions that my best clients expected from me.”
So in mid-career and at the age of 47, he decided to redefine himself and his firm, despite that fact that he was already one of the top wealth management advisors at Northwestern Mutual.
As part of this process, Protho recently participated in a benchmarking study that revealed a number of useful insights. One was that the business was running him, not the other way around. This is no small insight. Now in his early 50s and with five children, work/life balance is of critical importance to Protho and his family. Getting a better handle on the organization and on his priorities has enabled him to control his schedule, which in turn has freed up significant blocks of time during the day that did not otherwise exist.
Beyond the organizational piece, the other value of the benchmarking study has been the reflection the study requires of its participants. By virtue of this introspection, Protho and his team of four have asked themselves fundamental questions as they prepare for changes they plan on taking to grow their practice, i.e. “Who are we? How are we serving our clients? What differentiates us from all the rest? How do we compare to other advisory firms in similar circumstances?”
Through this period of self-examination and transition, Protho trusts that he will emerge “green and growing”, bigger than ever in his next phase of the business.
The Seven Key Components
What makes a top-performing advisor? Our research indicates that there are seven key components that are common to the business practices of the best-of-the-best. Understanding these components is necessary for those advisors who desire to acquire more clients, have growing client relationships, and generate higher revenues, as well as living a more balanced life.
l Organizing Priorities: Top advisors run their business with the single-minded purpose of the CEO who increases stakeholder value by anticipating, and serving, the needs of the client. Clear vision, communicated to staff, clients and the other trusted advisors with whom they partner and clearly defined goals are the first ingredients to accelerating growth.
l Client Engagement Model: The top advisors we have observed have a heightened sense as to who their ideal clients are, and how to serve them. For them, the Pareto Principle doesn’t even apply as each strives for 100% of the ideal client to equal the actual client.
l Client Acquisition Strategy: In addition to having a process that connects them to their ideal client personas, the top advisors have a firm grasp at all times on who is in their prospective client pipeline and what it will take to convert leads…to opportunities…to clients. Sounds so simple and straightforward, yet we continue to observe a large number of high performers who seek additional clients and net new asset growth, yet have a poor tracking of new prospective clients and opportunities. When held accountable in just this one single area of the practice, results have been tremendous.