Many advisors find all-encompassing business strategies too much to cope with. Enter the "postcard plan."
It’s a controversial point but it’s one Jim Komoszewski, first vice president and director of the strategic business unit at National Planning Corp. (NPC), holds true: What’s wrong with the majority of investment practices is that too much time and money is spent on well-constructed business plans. “Advisors can only focus on a certain number of things at any time,” he said. “These plans don’t tell them what to do next to accomplish the most in the shortest amount of time. They’re inefficient.”
A case in point, Komoszewski recently spent time on the phone with an advisor who had spent $12,000 hiring an outside consultant to write him a business plan, complete with branding and staff ownership strategies. The problem was, at 60 pages it was just too overwhelming for the advisor to do anything with. “It’s an excellent plan, but it’s worthless if he’s not acting on it,” Komoszewski said. Tellingly, when Komoszewski asked the advisor a question about part of the report’s contents, “he didn’t even know where the folder was.”
Komoszewski said that at 64%, almost two-thirds of NPC advisors have a business plan. But of that group, only 26% of advisors are following it, “which is why you have to ask yourself how to build a plan you will use.”
Komoszewski’s solution is to trim anything from a business plan that won’t have an immediate effect on an advisor’s practice. The goal is to trim the plan from a 60-page behemoth to a set of bullet points that can fit on a three-by-five-inch card. “Ask yourself what you need to accomplish in the short term,” he said. “You can’t look out five years and ignore today.”
The plan is to focus on three of an advisors more important and tangible assets: money, time and energy. In each case, certain actions produce results that are either positive, neutral or negative. “With a three-by-five plan you can really focus on areas of your business to eliminate the negative, reduce the neutral and maximize the positive,” Komoszewski said.
The problem, though, is that it’s hard to generalize because each advisor’s practice is different, but for some advisors, retaining clients in difficult markets is a topic that needs immediate focus. For other advisors, it’s making sure clients get the best service or the most frequent and useful communication. “Look at where you’re focused now and where you can make the most impact with your time, money and energy,” Komoszewski said.
Generically, Komoszewski said if he was an advisor at the start of the process, he’d focus first on production goals on an annual, quarterly, monthly and weekly basis so he knew what he’d need to gross in order to meet those goals.
Next would come meetings, both with clients and prospects, based, again, on annual, quarterly, monthly and weekly basis, spending more time with more productive clients and less time with others.
Komoszewski would also set goals for reaching out to accountants and attorneys, quantifying specifically how often the advisor plans to reach out to them.
It also helps to focus all staff on specific goals, whether they’re growing assets from $180 million to $230 million by the end of next year or whatever, figuring out how many new prospects that requires, what sort of average account size you’ll need to reach and what sort of product mix you’ll need to sustain growth. “Get all your folks on the three-by-five business plan idea,” Komoszewski said. Give them goals to work toward beyond compensation. That could be time, Summer Fridays for example, or a group trip to Hawaii if everything goes to plan. “Give them something they can work toward,” he said.
When advisors narrow their plans down to simple, actionable steps, they’re in control of their time, money and energy. “You’re not sitting around waiting for something to happen, you now have knowledge of how to advance the ball,” he said.
Perhaps the biggest advantage to the three-by-five plan is that, unlike that 60-page folder gathering dust in the corner, advisors can tuck postcard-sized plans into their jacket pockets. “You can keep them handy and remind yourself often what you need to accomplish,” Komoszewski said. “With a three-by-five card you can focus on a few actionable items anywhere. In this business especially, it’s not the know, it’s the do.”