Financial advisors are entrepreneurs who have chosen to be in financial services. As an entrepreneur building a business, you will be called upon to answer three questions:

1. What role do you want to play?
2. How big do you want to become?
3. What is the requisite organization?

Typically, financial advisors start as a business of one. The primary activities are prospecting and selling. However, as they grow, administrative, underwriting, compliance and client service activities erode the time available to attract and retain clients. For those who want to get bigger, the challenge is to address the third question. Requisite is defined by psychologist Dr. Elliott Jaques as “required by the natural order of things.” To grow, you have to decide what type of organization you require.

Financial advisors who choose to remain a business of one take on a number of tasks. Their challenge is to balance the multiplicity of tasks while retaining their focus on attracting and retaining clients. For most, it’s difficult to consistently grow revenue beyond $120,000 to $150,000. The type of organization you build depends upon the role you want to play and how big you want to become. We work with three advisors who answered these questions differently.

Tom Perrone has three assistants, one of whom has been with him for more than 30 years. They do all of the service and support tasks. Perrone works three days a week meeting with existing and prospective clients. One advantage he enjoys is he has made himself referable. After every interaction, Perrone asks clients to complete a short survey. The purpose of the survey is to assess client satisfaction and willingness to refer. He calls this approach “friends helping friends.” Each year, Perrone receives 150-200 referrals, of which 15 to 20 become clients. He is able to generate a high six-figure income and focus on what he does best: building relationships for life.

Joel Goodhart and his two partners have a team-based practice. The three complement each other and collectively have 70-plus years of experience. There are also two junior associates and five support staff. Goodhart and his partners consciously set out to build trust with collateral professionals. A number of accounting and legal firms refer clients to them. This year, those relationships are responsible for 28 percent of the firm’s nonrecurring revenue. Goodhart and his partners work hard at creating a positive experience for collateral professionals and clients. The three partners collectively develop the strategy for growing the business and meet regularly to review progress.

John Nicola is the CEO of a 50-person financial advisory firm that generates an eight-figure revenue stream. Over the next five years, Nicola wants to grow the firm’s revenue to $50 million-plus. He understands that to grow the business, you have to build the organization. Nicola Wealth Management has 18 people in an advisory capacity and a large and well-trained team to provide support. The firm manages over $1 billion in assets and provides comprehensive financial management for clients. Nicola’s role is to be the visionary and leader of the firm. While Perrone, Goodhart and Nicola have
different business models, they share in common clarity of vision and purpose with regard to the expression of their unique abilities. Each of them is successful and fulfilled in his role. How you answer these three questions depends upon your values and capabilities.

To learn more about coach and educator Norm Trainor, visit www.covenantgroup.com.