“You are here today as part of a culmination of a nearly year-long effort and partnership between Investment Advisor and ActiFi,” said Investment Advisor Group Editorial Director Jamie Green.
So began a day-long roundtable discussion with practice management experts in the advisor space. Held in Chicago on June 13, it tackled the Herculean task of defining “practice management” and addressed the findings of the first Pursuing Practice Excellence study.
“Our intent was to devise a practice management survey, to field it, to analyze it and report on the study that we’re calling ‘Pursuing Practice Excellence,’ which we humbly believe is a groundbreaking study that goes beyond what many already helpful benchmarking studies provide to the industry,” Green added.
The goal of the Pursuing Practice Excellence project was to assess the current state of practice management, identify best practices among advisors and their partners and to discover advisors’ key unmet needs and their future challenges and opportunities.
The data was gathered in two ways. The first was through an online survey of advisors from across the business model spectrum who were invited to participate through AdvisorOne.com; 954 advisors completed our survey in December 2011 and January 2012. Second, ActiFi conducted scores of telephone interviews with industry leaders from firms that partner with advisors to find out where they were spending their practice management dollars and efforts on behalf of advisors.
By comparing the advisors’ perspective with these partners’ data, the aim was to help broker-dealers, custodians, manufacturers and other service providers develop and offer better solutions so advisors can grow more profitable businesses.
For their part, roundtable participants were asked to explain what practice management is, its relevance to advisor (and client) success, how it’s deployed on a daily basis and how results are measured. Their key task was to analyze the gaps between what advisors said they needed and wanted from their practice management partners and what those partners were offering, in hopes of narrowing those gaps.
The four participants were invited to Chicago based on the (admittedly subjective) quality of the answers they gave during the interview portion of the survey and the critical thinking they displayed in those interviews. The quality of the roundtable discussion confirmed their choice as some of the best and brightest in the industry, as was their willingness to speak frankly about what the industry—advisors and their partners—has done wrong and what it needs to do right to increase advisors’ chances for business success.
The participants were Kim Dellarocca, director of segment marketing and practice management with Pershing; David Patchen, managing director of practice management with Raymond James Financial Services; Kirk Hulett, executive vice president of strategy and practice management with Securities America; and Jim Komoszewski, senior vice president of practice management with Investment Centers of America.
They were joined by ActiFi’s Spenser Segal, CEO, and Brian Stimpfl, senior vice president of relationship management, as well as John Sullivan, editor-in-chief of Investment Advisor and Green. A condensed version of the conversation is presented here; an enhanced version is available at AdvisorOne.com.
Defining Practice Management
Jamie Green: Beginning with the advisor portion of the Pursuing Practice Excellence study, one thing we noticed was that it made sense to include sales and marketing in a practice management definition.
Kirk Hulett: If the topic is “How do you define practice management?” my clarifying question would be “How do you define sales and marketing?”
Spenser Segal: We literally put it out there and let the advisors define it.
John Sullivan: Have you gotten many requests from advisors for that kind of help?
Hulett: Sparingly. But when we go in and do our diagnostics in working with advisors or groups of advisors, we certainly will come across the fact that asking for referrals is a challenge. Being proactive at building a network is a challenge. It isn’t the structure behind it as much as their interpersonal skills or their competence in being able to do it.
Segal: One of the things we consistently see relative to sales and marketing among more experienced advisors is the lack of definition of the sales process. If there are multiple advisors in the practice and they want to use a sales pipeline management system, they don’t have common and clear definitions as to the stages to go through. There’s not much rigor around that, and those terms exist, they’re not commonly shared.
David Patchen: One of the great things about practice management is that some of our top advisors help us drive the content, tools and tactics. Two years ago, Carter Financial, a very large independent RIA in Dallas that has a broker-dealer relationship with RJFS, asked if we would put together a sales training program for their younger advisors. I grabbed a couple of my colleagues, and the more we brainstormed around the request, the more we realized that we may be on to something. So we put together a two-day program that covered many of the things you were mentioning, Kirk. The program eventually morphed into what we call the Zen Advisor Program, and we have done that all over the country. But the challenge about sales education is that it’s not a one-stop endeavor.
Kim Dellarocca: I would agree with a lot of what you’re saying. I think the point that Kirk hit on is that mature advisors tend to be the ones you’re working with, and the opportunity around the next generation is really important. The way that business development was done in the past is changing dramatically. It’s much less expensive to develop a training program and to bring advisors through that program than it is to continue to play the recruiting game. So how do you even shift the whole business development process and paradigm? It needs to change.
Hulett: Young people don’t like the word “sales.” They don’t want to be salespeople. I would want to play off exactly what you said, Kim, which was questioning techniques and tactics—teaching people how to ask better questions, rather than teaching them to close someone.
Segal: You’re not closing the deal, you’re opening a relationship, right?
Hulett: You can go deeper because you know how to ask the right questions and how to actively listen.