Operating in a small city can present challenges but also quite a few growth opportunities for a financial planning firm. So says Cheryl Holland, a registered financial advisor and president of Abacus Planning Group, Inc. in Columbia, S.C.
“Columbia is not thought of as a wealth Mecca,” she admits. Managing more than $600 million, as her firm does, “feels a little different if you’re doing it here.”
However, at Abacus, “we’ve managed to create a wealth management firm within a relatively modest community.”
Abacus is a diverse firm, Holland said, both in terms of age and gender, and she said she would like to see the company increase its ethnic diversity as well. But having advisors and other employees at every stage of life helps Abacus relate to a wider variety of clientele.
In addition, with its focus on age diversity, the company has also made great efforts to educate and improve the skills of its workforce, both young and old.
“If you look at our budget we tend to spend about three times more than the average in the professional development category,” Holland said. Whether that’s spent on continuing education at a conference, or hiring a management coach, the company is committed to providing access to many professional development opportunities both for its younger, less experienced staff members and “for that individual who is great at what they do but they still don’t have all the tools in their kit.”
Despite the smaller location – Columbia has less than 130,000 residents – Holland says her firm does not look far afield for clients. In fact, “for a long time we had a rule that if you weren’t within an hour’s drive” the firm would not take a person on as a client.
Now, as the company has grown, clients have moved or passed on and left wealth to non-local heirs, which means that 20% of the clientele does not live in Columbia. But Abacus is still is more likely to refer a client to another advisor firm if that person is based too far away.
There are a lot of reasons for Abacus’s local strategy, Holland said. One is the ability to have lots of face-to-face contact with clients, without excessive travel time for the staff.
Secondly, and perhaps more importantly, is the network of important relationships that Holland and her team have built with other professionals into the Columbia area.
“When you’re truly doing comprehensive planning, you’re working with [the client’s] CPA and estate planning attorney,” she said. Building relationships with those other professionals takes time, so it works to the benefit of the firm’s clients that its advisors already know, and have worked with, many of the lawyers and accountants in the city.
Of course, there are going to be some clients who feel that because a company is based in a smaller city it is not as capable as one in New York, which is one downside, Holland said.
And financial advisors who want to build a strong local presence in a small community need to be aware that they are always in the public eye. “There’s no going to the grocery store in your curlers,” she said, laughing.
But being so visible definitely has its advantages when it comes to building a client base, she added.
In a smaller city, a financial advisor can offer him or herself as an expert to the local television station. They may be able to write a column on personal finance for a local newspaper. And knowing so many of the estate planning attorneys and CPAs generate referrals and goodwill when potential clients ask about the firm.
Abacus encourages these relationships by thinking about business development comprehensively, Holland said, adding that she believes advisors should play to their strengths. Some people like to play golf, she said, while others may be gifted at public speaking.
All of these skills can help build a name, and a brand.
One way that Abacus builds relationships with other professionals is by sharing expertise by hosting seminars and conferences. The company has conducted sessions on Roth conversions and the health care reform act, and invited CPAs and attorneys to attend. These types of sessions are “hugely successful,” Holland said.
She also stressed that while her entire team is encouraged to do business development, “we’re trying to show the younger ones that they should network in their own way.”
Younger and newer advisors can reach out to peers at other firms. “Who is a good estate attorney? Or a junior planner? Or an up-and-coming CPA?” By networking with those people, the younger planners are building the future of the company because “five, ten fifteen years from now, when they’re the leaders of Abacus, they’re going to start getting referrals” thanks to the relationships they’ve developed along the way.
When you’re building a business in a small city, “you’re planting seeds all the time,” she said.