It’s easy for owner advisors to make mistakes as they work on growing their businesses. Focusing too much on “making money” is on that list.
Based on e-mails I receive about this topic and advisor owners who raise the issue with me when I first meet them, it’s worth further discussion.
Of course, many owner advisors find it counter-intuitive when I tell them that to make more money, they should really focus on the non-revenue side of the businesses.
This is because — unlike with businesses that just sell products — advisory firms provide largely intangible services to clients; in this case, financial services.
If your focus is on “making more money,” then you’ll tend to focus less on servicing your existing clients and more on adding new ones. This means, of course, that you aren’t improving services for your current clients.
Ironically, we find that owners who focus on growing this way (i.e., making more money) generally increase their businesses more slowly and make less money than those who shift their attention to improving client services.
It’s best for owner advisors to focus on firm culture rather than on growth as a way to genuinely and sustainably grow the business.
When you shift your firm’s culture away from growth and toward service, good things happen. For instance, your employees — and partners — will shift their focus from their compensation to your mission of good client service.
Yes, the business is based on providing financial services, but the broader goal is expanding your clients’ happiness and peace of mind. This will trickle down to your employees — moving them away from a mentality that’s overly focused on growth and making more money to one founded on purpose, happiness and value.
To create this sense of purpose, it’s best to give your employees a clear vision of where the team is going — and why. They don’t need a business plan per se but a deeper, more meaningful reason that guides what everyone does as a team day in and day out.
Today, the independent advice industry is stuck on growing $1 billion firms. I believe we need to refocus on our real mission: helping people live better lives.
If you can successfully get this message out to your employees and to your clients, they will spread your message for you. As a result, your business will grow organically.
Do you want your business to be all about money, or about doing good work and helping people?
Most advisors I work with first tell me and my team: “I want to make X dollars in Y time frame.” With that mentality, they probably will get less of both.
Instead, we encourage owners to focus first on servicing their clients. This focus quickly translates down to their employees and jump starts their businesses.
If you zoom in on better care for your clients, you’ll more quickly and easily attain the other objectives that you want — a larger firm and higher profits.
Angie Herbers is Managing Director and Senior Consultant at Herbers & Company, an independent growth consultancy for financial advisory firms. She can be reached at firstname.lastname@example.org.