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Overcoming Mental Mistakes That Limit Your Firm’s Success

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I realize that ‘thinking outside the box’ has become a tired cliché. But what most people don’t realize is that we ourselves create the boxes that limit our thinking: our preconceptions often prevent us from exploring all the possible directions we could go in. 

Owners of advisory firms are no exception. To help my clients break free of the boxes they create for themselves, I’ve created a short questionnaire that addresses the most common boxes that limit advisory firms. As we begin a new year, this is an excellent time for all advisory firm owners to take a look at whether they are limiting their firms by putting themselves into one or more of these boxes.

So lock the door, turn off your computer, mute your cell phone,sit back and take some time to consider how your answers to these three questions are limiting the growth and success of your business.

1) What would you do in your business if you knew it wouldn’t fail?
The fear of failure is the most limiting factor in advisory firm growth: not so much that the owners will look bad, rather that they will waste their limited time and resources and have nothing to show for it. 

The most popular answer to this question is: ‘Hire more lead advisors!’ Additional advisors working with their own clients would not only increase the number of clients that the firm could take on (which would increase revenues), it would also give the firm owner(s) and senior advisors more time to focus on building a better firm.

But whatever your answer is, next consider the factors that make it likely to fail in your mind and what you could do to increase the chances of success. For instance, in the case of new lead advisors, we find that comprehensive training programs can dramatically increase the chance of success for both hiring lead advisors and advancing younger advisors.

2) What would you do in your business if money wasn’t an issue?
Again, limited resources is a major factor in the thinking of most firm owners. The No. 1 answer here is to create a marketing program; including a better website, an improved brand, more focused messaging, etc. 

And it’s true: these things can be expensive, especially when you work with a professional marketing firm that creates an “8-step” marketing plan. Yet I’ve found that most marketing plans fail because they try to grow a firm too big, too soon.

For one thing, most firms can’t absorb a flood of new clients and maintain high-quality client service. What’s more, the owners and employees at most firms don’t have the spare time to devote to large marketing initiatives. Instead, we recommend that firms focus on one major project each year: improve the website, do investment seminars, launch a newsletter, etc. We find that when firms just do one project—and do it really well—over a year, it will usually produce tangible results in eight to nine months. If you do that for two or three years, you’ll have all the growth you can handle. 

3) What would you do if time wasn’t an issue?
The basis of this question is that virtually all owner-advisors feel that they are overloaded already and, consequently, are reluctant to take on any new projects. Still, the No. 1 answer is that they would spend more time researching investment opportunities.

What’s holding them back? In most cases, firm owners are wasting too much of their time trying to implement massive marketing programs (see above). That in turn prevents them hiring new advisors to take some of the workload off their desks. 

Obviously, the solution is to hire and train more lead advisors (see question #1), which would free up older advisors to look for investment opportunities. But it also involves changing the traditional financial planning mentality that older advisors work with clients, while younger advisors create financial plans and investment portfolios. In today’s increasingly complex financial world, we find that older advisors can often add more value using their experience to find new and better investment and planning opportunities: while properly trained younger advisors can be trusted to handle the bulk of the client facing work. 

The takeaway here is that once you can identify the problem, you can often find a workable solution. The key is to not let your preconceived thinking stop you from exploring ways to build the advisory firm you really want. Happy New Year.



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