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Practice Management > Building Your Business

Top 5 Financial Advisor Resolutions for 2014

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Financial advisors are ebullient as the new year draws near, expecting 2013’s bull market to keep on rising into 2014.

A survey of 800 advisors conducted by the SEI Advisor Network, a provider of outsourced asset management and practice management programs, indicates that a huge proportion see good times ahead. Fully two-thirds are cautiously optimistic, while 18% count themselves as “excited.”

Fully 87% see an advancing market, with more than half predicting the Dow Jones Industrial Average will reach into the 16,500 to 17,500 range and another 10% envisioning the Dow about 17,500. (Another 21% see a modest rise in the 16,000 to 16,500 range and just 13% expect the Dow to be under 16,000 a year from now.)

A market pullback (41%), tapering (24%) and tax hikes (15%) were the most feared headwinds.

But with advisor sentiment so bullish overall, advisors — when turning to their own businesses — are prepared to grab the bull by the horns and resolved to concentrate on five key areas.

Their fifth-highest priority, supported by nearly half of all advisors surveyed, is to…

Be More Selective of New Clients

New Year’s Resolution #5:

Be More Selective of New Clients (48%)

Finding the right fit in an advisor-client relationship is increasingly important to some advisors who fear being condemned to a life sentence.

Relationships are inherently unequal. Some people have a natural, at times inexplicable, attraction to one another, and with others, there’s just no there there.

Business relationships can be even more fraught, as some clients will not follow, or respect, the advisor’s advice and others will use the advisor as an emotional crutch.

For these and other reasons, a large segment of advisors are seeking to be more selective in 2014 and planning to practice politely saying no.

Parallel to enforcing distance with some clients is advisors’ fourth highest New Year priority, which is to…

Meet New Centers of Influence

New Year’s Resolution #4:

Meet New Centers of Influence (59%)

Reaching out beyond one’s own narrow network is a business necessity, allowing an advisor to tap the disinterested third-party endorsement of other professionals who have established good will and credibility in your target market.

Classic financial advisor centers of influence (COIs) include the network of professionals who serve distinct but related needs of your best clients. Your clients’ CPAs or estate-planning attorneys likely engage clients similarly situated to your own.

By coordinating efforts on behalf of your common client, you can foster the mutual understanding and respect that leads to valuable referrals.

But, to be prepared to receive new high-end clients with high professional expectations, advisors’ third-ranking New Year’s resolution is to…

Integrate Technology to Increase Efficiency

New Year’s Resolution #3:

Integrate Technology to Increase Efficiency (59%)

The new reality is that clients live in a digital world, even if the financial services industry is often behind the curve in the technology department.

Apart from client expectations, the ability to manage contacts, e-mail, calendaring and task lists in an integrated fashion should also yield significant increases in productivity.

Replacing legacy platforms with up-to-date offerings can aid prospecting, marketing and communications, and can improve client service.

Related to this goal is advisors’ second-highest priority for 2014, which is to…

Systematize Internal Processes to Increase Efficiency

New Year’s Resolution #2:

Systematize Internal Processes to Increase Efficiency (67%)

Beyond having the right technology nuts and bolts, advisors want a smooth workflow.

SEI’s practice management expert John Anderson put in this way in a recent blog post:

“In my experience, many firms are key person (advisor) dependent. Most of the knowledge around client relationships and key processes are in the heads of one or two people, and not documented. That is great if you want job security — but what about your staff, successors, or even a potential buyer? How can you expect your office to run smoothly and clients to remain satisfied if you are the only one that can do it?”

While office efficiency ranks high with advisors, their most fervent wish for 2014 is to…

Increase Referrals From Current Clients

New Year’s Resolution #1:

Increase Referrals From Current Clients (85%)

Referrals from existing clients is a perennial wish of advisors, and because it is so elusive, much ink has been spilled on the topic. Many advisors fear alienating a valuable client by seeming to be impertinent in asking for referrals.

And indeed enough clients have demonstrated their reluctance to provide them, so as to permanently frighten rejection-fearing advisors.

An SEI white paper offered this advice, described by ThinkAdvisor as follows:

“It’s best for advisors to define their ideal ‘five-star client’ and provide the description to their clients. That way, clients will better understand what their advisors are looking for and will be more engaged in the process.”

Here’s wishing a prosperous 2014 to advisors—with success in maintaining their resolutions!

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