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April 24, 2012 at 08:00 PM
Before they begin dispensing financial advice to clients, most advisors receive extensive training through college courses, professional certification programs and on-the-job experience. But few independent advisors are equally well-prepared to assume the roles of CEO and rainmaker—both of which are essential to a thriving practice. To help advisors gain a competitive edge by confidently embracing their leadership roles, Commonwealth Financial Network launched Power in Practice, a year-long business coaching program. In this four-article series, we’ll follow a group of advisors as they embark on the 2012 Power in Practice program, sharing key lessons and insights they pick up along the way.
Now in its second year, Power in Practice guides advisors in creating practice management infrastructure while renewing their focus on growth and business development. Unlike the typical training session, which introduces a lot of great ideas that may not get implemented, the program provides business owners with tactical steps and structure intended to serve them throughout their careers. Specifically, Power in Practice is designed to help advisors tap their potential by:
- Identifying opportunities and developing a game plan for growing revenue in the coming year
- Clarifying near- and long-term goals and implementing best practices to achieve them
- Enhancing leadership skills and developing practices for more effectively managing staff and time
- Creating a streamlined infrastructure to boost operational efficiency
Presented in three two-day workshops, the curriculum covers small business leadership, production enhancement, human resources, operational efficiency, marketing and risk management. In between the workshops, peer group conference calls help reinforce best practices and promote accountability and follow-through. Pre- and post-workshop assignments encourage participants to make the most of each session, while a series of one-on-one coaching calls gives advisors the opportunity to discuss their unique challenges with a certified coach.
At the program’s end, advisors walk away with a personalized practice management manual to support them in the CEO role indefinitely, plus a clear plan for enhancing their production and taking their firms to the next level—from practices to businesses.
Sounds great, but does it work?
Talk is cheap, so here are some hard facts about Power in Practice. Advisors who participated in the program’s inaugural year saw a significant increase in revenue compared with Commonwealth advisors who didn’t take advantage of the program. Participants who generated between $200,000 and $475,000 in 2010 GDC increased their 2011 revenue by a weighted average of 24% over nonparticipating advisors with the same 2010 GDC. Participants who generated more than $475,000 in 2010 GDC (including several million-dollar producers) increased their 2011 revenue by 44% over those in a similar revenue range who didn’t participate in the program.
Take Kris Maksimovich of Global Wealth Advisors in Dallas, who grew his revenue substantially in 2011. In his own words, here’s what Maksimovich took away from the program:
“It all started with clearly outlining our business and marketing plan for the next year. While we’ve done this every year, it’s a bit different when you’re challenged by your peers to address any gaps in planning and focus more intently on the strengths of your practice. In addition, over the past 12 months, we have:
- Identified and fine-tuned our core processes, those most often used in day-to-day operations.
- Analyzed our client base to determine which relationships were not profitable for the firm, and gained a clearer understanding of how much the time we spent on them truly cost us.
- Benchmarked how our practice compared with firms of equal and larger size in several areas, including budget, client demographics and profitability.
- Updated our employee manual and more clearly defined team member roles. As a result, employees have taken greater ownership of their positions.”
In short, Maksimovich says, “We now feel we have a laser-sharp focus on the drivers of profitability for our practice.”
Workshop #1
Ready to apply some of the program’s teachings in your own firm? Let’s recap the first Power in Practice workshop of 2012, which was attended by a diverse group of advisors from across the revenue spectrum.
Business planning. To kick off the workshop, participants were presented with a question: What is the value of a written business plan? Few had made a habit of updating their business plans annually, and some had never written one at all. Many thought of a business plan as a hefty 50-page document—an image that discouraged them from even trying to create one. Power in Practice takes a simplified approach to business planning, “right-sizing” it for small businesses. In the first workshop, advisors begin creating a streamlined business plan that consists of three key components: the firm’s business vision, strategic directives for the next three years and SMART (specific, measurable, achievable, realistic, time-bound) goals for the next year. By the end of the program, participants will have made significant progress toward completing a solid business plan.
Building on the approach to time management presented in Stephen Covey’s “Seven Habits of Highly Effective People,” we discussed the “nesting” principle of business planning. Consider a child’s stacking toy, where one piece nests within a larger piece nested inside an even larger piece and so on. Likewise, from a time management perspective, it makes sense to nest the tasks required to accomplish your goals within a longer-term strategy, which aligns with the business vision tucked inside your personal vision. When these components fit together, you’ve got a concise and precise business plan.
