Close Close

Practice Management > Building Your Business

Anatomy of a Successful Advisor

Your article was successfully shared with the contacts you provided.

It’s no secret that building a successful business is challenging. So why do some advisors succeed at building a business where others fail? Are they simply more talented? Do they have more resources, a better location or perhaps a better marketing system? 

The answer is “none of the above.”  More often than not, both successful and unsuccessful advisors share similar resources, skill sets and marketing systems. The key differentiators are planning, vision and determination.  They don’t just work harder; they work smarter, turning obstacles into opportunities.

Let’s take a look at some internal and external factors that may impact your business, and change how we perceive their influence. In most cases, small adjustments to your business can have a significant impact on your ability to overcome obstacles, identify opportunities and impact your business.  The first step is to identify the factors (both positive and negative) that shape success.

More on this topic

Let’s start with the external factors:

  • Geographic: Many advisors suffer from Small vs. Large City Syndrome: either not enough people to see or too much competition. In most cases, transplanting your business to a new city is not feasible, so let’s work with what you have in your area. 
    Small city: If there aren’t enough potential clients, consider opening a satellite office (some cities offer shared workspaces where you may rent meeting space by the hour). I’ve also seen advisors partner with CPAs or trust attorneys and rent an office within their building at a reduced cost for meeting as needed through the week. It’s a way to build rapport with other trusted professionals in your area, generate referrals and establish a mutually beneficial business relationship.
    Large city:  For just a moment, let’s examine the numbers. If you live in a city of 1+ million people and there are thousands of financial advisors within the city, that leaves several hundred potential clients for each advisor. How many new clients can you comfortably add to your practice in a given year and provide exceptional service? Focus on your ideal client and it makes the pool of prospects more manageable. Differentiate yourself from the competition, focus on their needs and exceed your client’s service expectations. They will remember you for it — and they may even tell their friends.
  • Regulatory environment: The regulatory environment is completely out of your control.  Know the rules and abide by them. Then, focus on things that impact your business and are within your control. 

Now, let’s identify the internal factors:

  • Education and experience:  Experience is important, but ongoing education is equally important.  Most advisors view continuing education as a daunting task.  However, experience will only get you so far.  Successful advisors continue to learn new marketing strategies, leadership strategies, planning techniques, tax laws and products to name a few.  The industry and your business environment will continue to change, which is why successful advisors see the value of education, keep up-to-date with industry trends, and acquire designations as they pertain to their core focus & direction for their business (i.e. CFP, CPA, CLU, ChFC, etc…). The best advisors see education as an investment in their business.

[See also: Slideshow: How Producer Education Pays Dividends]

  • Staffing:  An advisor once told me, “Never hire anyone you aren’t willing to fire.”  This is important, as many independent advisors build their business with the help of family members and some only hire outside help. Now, I’m not advocating hiring or firing family members, but carefully assess what impact this may have on those relationships and what dynamic they may take in a business setting. Some families work well together and some don’t.  The key here is to hire for the job, instead of trying to force people to fit into the profile of the job.  If you have great people doing the wrong jobs, the performance of your company will suffer.
  • Budget:  There’s never enough money to do everything you want.  Focus on what matters and spend wisely. Successful advisors don’t spend frivolously.  They track their business and analyze every dollar spent, making calculated decisions along the way.  A profitable business requires less new business to meet expenses and sustain itself.    
  • Resources:  There is an abundance of resources available to you, from marketing systems to software to selling processes to business coaches. The key to leveraging your resources is find a marketing strategy, business coach and planning process that works for you!  It is all too easy to want the next exciting idea and jump on the bandwagon, but unless it fits your business model and will help you achieve a specific goal, you are wasting precious time and money. Take a step back, analyze the program or tool and ask yourself this question, “Is it right for me and will it benefit my clients?”

In the end, you must choose how to approach these factors and to what extent you will allow them to help or inhibit your business. In a recent post, I wrote about the importance of having a business plan and defining your purpose. Writing a strong business plan is one way to manage these factors, keep your focus and juggle all the internal and external factors working in your favor. 

Your feedback is welcomed, so please share some of the keys to your success in the comments!