This is the fifth and final in a series of blog postings defining success for retirement plan advisors by Liz Davidson, who as president of Financial Finesse has a unique vision of who the most successful retirement plan advisors are, and what they have in common.–Ed.
In the first article of this series, The Successful Retirement Plan Advisor, Pt. 1: 3 Traits They ShareI identified key traits that successful advisors have in common. One of those traits was understanding the difference between expenses and investments, and committing to strategic investments that have the potential to take your firm to the next level.
Tom Royce and Mike Chong of Voyage Financial Group are a tremendous example of how effective this strategy can be. They took a big risk about a decade ago to take on the time and expense of cultivating a relationship with a Fortune 500 company, providing financial planning services to their mostly blue-collar employees—something most wealth managers would never even consider a viable strategy. Today, they have nearly 700 clients and manage more than $350 million using this difficult but highly effective model. No cold calls, no expensive direct mail materials and no expensive travel to networking events—just time spent working with middle-income earners at their workplace, for free, who could be potential clients and advocates for their services.
Today the firm is rapidly developing a name for itself among Fortune 1000 companies in the Chicagoland area—a highly sought-after alternative to the likes of Ameriprise and MetLife who prefer to focus their time and energy on the executive market—something that plan sponsors are increasingly concerned by, recognizing that middle-income employees so desperately need good financial advice in today’s economy.
Voyage’s Two Keys to Success
Here’s what makes Voyage Financial Group so successful, and how advisors can apply a similar strategy to their own business to carve out a highly profitable niche for themselves, and ultimately build a highly respected brand within their area of expertise:
- Voyage very cleverly followed what renowned business gurus W. Chan Kim and Renee Mauborgne call a “Blue Ocean strategy”—finding an area of opportunity that other advisors were ignoring instead of competing in the “red ocean” where everyone is fighting for business (and many wind up up being eaten alive).
They recognized that middle-income earners were desperate for financial guidance, and represented an untapped market because most advisors set their sights on high-net-worth individuals. They also recognized that a middle-income worker with a generous pension can become a very attractive client upon retirement and that if they invested the time to build trust with these employees, there would be a strong return in the long term. Lastly, Tom and Mike had learned that middle-income workers were generally very loyal and that once you secured them as clients, provided you took good care of them, you would have a client for life—something that is absolutely critical to long-term success in financial planning.
The lesson from this strategy is to find an area of the market that others are ignoring, and then study the economics of that area to determine if it is indeed a viable business strategy. When you consider that competition will be minimal, you may discover that there’s actually more financial opportunity—not to mention more satisfaction from a social mission perspective—in these opportunities than the ones most other advisors are fighting over.
- Voyage also approached its business with a long-term plan that would ultimately be both highly profitable and of great help to its employee clients, rather than simply trying to earn a quick return. You might think that Voyage is overnight success story, but like most overnight successes, it’s been years in the making, and it’s a momentum game.
By investing the time and resources into cultivating relationships with middle-income employees and developing a grass- roots following, they amassed a large community of clients who are now advocates for the firm. Voyage has thus reached what author and journalist Malcolm Gladwell calls “the tipping point”—that point where you reach a critical mass and opportunities seem to come out of the woodwork.
This speaks to a trait I’ve observed again and again among the most successful advisors—the innate understanding that you must have a long term-strategy, and make strategic investments around that strategy, or any success you have will be fleeting and unsustainable. Unlike most advisory firms, Voyage doesn’t operate reactively—scrambling to marshal resources to close the next big deal. Instead, the firm operates consistently, methodically and with the utmost discipline executes on their long-term plan—never losing sight of what the firm is, who the firm serves and why it is in business.
It takes courage and patience to do this, but I have yet to meet a successful advisory firm with a long track record that operates its business any other way.
The lessons from Voyage’s success are difficult to follow—but that’s precisely the genius behind them. If you can be one of the courageous few who takes a long-term approach at a time when most advisors are seeking the next big thing, you’ll stand out from the crowd at a time when employers and employees alike are desperate for a different approach. It may not be easy, but the hard-won overnight success, and the long list of clients who are raving fans, will make all the frustrations getting there seem like minor inconveniences.
View all the articles in The Most Successful Retirement Plan Advisors series.