One of the biggest challenges we face as business consultants to advisory firms is when owner-advisors come back from an industry conference with one or two (or six) “new initiatives” that they heard a consultant or advisor talk about and which they want to implement “right away.” Based on our experiences over the past 15 years, we find that these “business ideas” typically fall into 3 categories:
- Not right for this business
- Potentially helpful—but only after three or four years of preparation.
The bottom line in building a successful independent advisory business is that, as in other important areas of our lives—relationships, careers, our golf swing—there aren’t any “quick fixes.” Instead, lasting success comes from knowing where we want to go, combined with a solid game plan to get there. And, of course, the discipline to stick to one’s game plan, very much like a financial plan.
Consequently, we view creating the right game plan as one of the “essentials” for independent advisory firms. In fact, we conduct a lot of workshops on that topic alone: Creating a Successful Growth Plan. Here’s what firm owners need to do to create the right game plan for themselves—and their firms.
Step 1: Create Your Vision Statement
Don’t confuse this with a “mission” statement: they are completely different. A “vision” statement is an internal document (shared only with the owner(s) and employees of your firm), that spells out where you want your firm to be, at a specific point in time. We recommend setting a specific goal and a specific date by which to reach it, typically a three- to five-year time frame. For instance, growing to $500 million in client AUM by the year 2020. When you create a vision statement like this, and share it with everyone in your firm, you’re letting them know exactly where you’re headed. We find this helps to get your entire team on the same page—working together—and greatly reduces both confusion and stress levels.
Step 2: Lay Out Your Core Values
As a company, what’s your culture? What do you want your working environment to be? What are your expectations of your employees, your partners, and yourself? How do you want your employees to act? Do you want them to be honest? To take responsibility? To work together? To work toward the success of the firm? To place a high value on putting clients first and/or solving their problems? We find that clearly communicating how the firm owner(s) expect(s) employees to act instills cultural values that bond the entire firm together while greatly reducing misunderstandings of what is expected of every employee.
Step 3: Create Your Mission Statement
This is where you set out exactly what do you do as a company, to reach the vision set out above. As an advisory firm, you undoubtedly help your clients to reach their financial goals, but what do you do to make that happen? Do you create financial plans? Allocate and manage investment portfolios? Do you offer retirement plans? Develop charitable giving plans? Help with college funding? Offer insurance advice? Do estate planning? Tax preparation? This is where you’re very clear about exactly what your firm does. And unlike your vision statement, your mission statement should be shared with your customers. Step 4: Define Your Client Profiles
Who, exactly, are the clients that you help with the above-mentioned services? We recommend that you include the profiles of the clients that you currently serve—and those whom you want to serve: putting them into groups that help identify their needs, goals, stages in life, and how you might reach them. For instance, common groupings are: doctors, small business owners, corporate execs, etc. But the more specific you can be, the better: vineyard owners, execs at Exxon, surgeons, tech entrepreneurs, etc. You can also group by hobbies (golf, fishing, skiing), and by life stage: starting out in the job market, mid-career, near retirement, or retired. The key is to identify a relatively small number of groups that have similar needs, which will increase the quality, and the efficiency of the services you provide to them.