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Practice Management > Building Your Business

The High-Performance Coach: Preparation: The First Step in

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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.

l Marketing Approach: Hand-in-hand with Client Acquisition is the Marketing Approach. Top advisors intuitively know what differentiates them from the competition as well as how to connect to future clients on these differentiating points. It’s also the packaging and positioning of their firm among clients, prospective clients and trusted advisors in their community that separates them from others in their field.

l Team Development: In this day and age, clients demand a level of service that goes far beyond what most solo-preneurs can deliver. The best advisors know that the best clients expect a service delivery model that only a team can provide.

l Professional Advocate Network: Through June, our data indicates top advisors generate more than 70% of new client business from professional and client advocate sources. By cultivating a select group of trusted advisors, the most effective financial advisors are able to grow their business efficiently, as well as fulfill their role as a comprehensive wealth advisor.

l Business and Operations Management: In the past, top advisors could excel by virtue of possessing 1 or 2 intuitive skills. Today, this is no longer sufficient. The most effective advisors today are good to pretty good at the full array of required skills and technical competencies…much like a decathlete must be good at all ten events. Moreover, top advisors have the business acumen of a CEO, and are adept at all aspects of running an advisory business.

Benchmarking Tips

While there is no doubt that measuring your practice against the best of your peers can add enormous value, external benchmarking should only be one of the inputs into your decision-making process. As you begin your preparation for growth, here are six items to consider before benchmarking your practice.

1. Quality of information. Traditionally in the financial services profession, many practices have struggled to produce an accurate, timely and detailed set of “real” numbers for their business. In our view, information and data should be primarily used as a guide. For example, information gained from a website which provides “free” analysis with little scrutiny of the data being entered should sound the alarm bells.

2. Benchmarking in isolation. One of the major problems with benchmarking is looking at any metric in isolation. Drawing accurate conclusions purely from financial benchmarking can be misleading and confusing.

3. Qualitative vs. Quantitative. While they are extremely important, in most businesses, the numbers are the “lagging” indicators, they are the result of strategies and actions. To get the best possible picture, your benchmarking analysis should be both qualitative and quantitative.

4. Long-term or short-term. To decide on the most appropriate benchmarks for your practice, you must first determine where your firm sits within the “business life cycle,” i.e. what are your time frames? There are always trade-offs to be made between short-term results and long term plans. Short-term profits can be maximized by carefully managing expenditures. However, by not investing in practice infrastructure, one may be jeopardizing sustainable long-term success.

5. Fit with your strategy. Avoid that disconnect between measurement and strategy. Make sure you are measuring “apples with apples.” For example, if you have built your practice to attract and retain high-net- worth investors and you operate a deep relationship/high touch model, make sure that you are comparing yourself against other similar firms in this space.

6. Sharing of information. Not all research partners are created equal. Consider the firm with whom you may be sharing your valuable firm data and your experience and insights.

Ultimately, benchmarking increases the value of the advisory practice. Knowing where you stand may be critical to managing your business more effectively. Moreover, knowing where you stand relative to similar practices is a valuable measuring tool and a powerful motivator.

Ray Sclafani is founder and president of ClientWise LLC (, a full-service executive coaching firm that helps its clients optimize growth, maximize revenue, and manage risk. He can be reached at [email protected].


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