A long-time client who steadily guided his firm toward the $1 billion in client AUM saw growth slow substantially over the past year. I asked him, “What’s up?”
I generally have good relationships with my advisor clients and often am surprised when they open up about things that they wouldn’t tell other people.
In this case, the advisor said: “I haven’t told anyone this, not even my wife, but I am bored with my firm. I don’t want to work with clients, I have mastered portfolio management, I understand the principles of business management, bookkeeping and leading people, and I just don’t want to do it anymore.”
This owner’s experience is far from unique. In fact, it’s quite common for owner advisors to get bored with their “job” at some point and, at the same time, fear the consequences.
Here’s the basic problem: Independent advisory firms are hard to build. But once they reach a crucial mass of about $4 million in annual revenue or so, then their systems will (if done right) run themselves.
At about the same time, the firm owner usually is approaching his or her 20-year mark as a financial advisor and business owner, and the repetition of tasks is beginning to get old.
However, this doesn’t mean that all firm owners have to suffer through an advisory mid-life crisis. Owners who work at maintaining a high level of involvement with their business are usually able to avoid both the “boredom” and the “fear” zones.
Reframe Your Job
To stay involved, you have to look at your business in a new way. See it as a work in progress rather than as a finished product.
I’m not suggesting all advisory firms should work on “getting larger.” Building the right-sized business is one of the main keys to being happy in your work.
Yet, as the owner, you should never stop improving your business. I’m sure you can come up with a list of areas where your business could be enhanced.
I constantly highlight the need for owners to increase the financial efficiency of their business, for instance, and to learn how to serve clients better without sacrificing their lifestyle, time and profit.
Steps to Take
Let’s start with client service, as it’s your best marketing tool. For one thing, great service keeps your client turnover to a minimum, and it will increase your new client referral rate.
Further, it’s likely your technology could use some updating, in terms of both the client interface and the internal systems that make your staff more efficient and productive.
Finally, there’s training. Staff members are the ones who provide most of your client service. Thus, the better they are at their jobs, the better your firm will be.
You may be bored creating financial plans and building portfolios, but I bet you won’t get bored teaching others how to do it well.
The goal in an advisory business is to integrate everything and to share any and all information with everyone, so team members can work on achieving the same objectives.
To do this, understand that your business is constantly changing. Create a to-do list for yourself to insure that your business is continually improving.
Firm owners who stay engaged and focused on client service do better at staying out of the “mid-business” crisis zone. They are too busy making their businesses better and reaping the benefits of this approach.