Three leading advisors, ranked in Barron’s Top 100 Independent Financial Advisors 2010 list, shared advice with other advisors attending the TD Ameritrade Institutional conference in San Diego on how they progressed to where they are today.
Thomas Muldowney, Partner of Savant Capital Management
Muldowney believes that “The clients need to be in a position of trust. Treat your clients and staff well and make yourself trustworthy. That is the way you want to grow the business.”
He educates clients “to understand that they are not playing a market.” By knowing that they are buying a piece of companies, and that those companies’ responsibility is to deliver a return, it helps change the mindset of the client.
Muldowney had an interesting approach to what to do with small relationships. He talked about his company’s additional business model, stating, “For smaller asset accounts, we built a feeder program for our wealth management business.”
When it comes to growing a practice, Muldowney said, “We are moving away from the maverick entrepreneur model. As a mature organization, you need to leverage other’s expertise, including human resources, compliance and operations.”
On the topic of business models, Muldowney advised, “Avoid being a jack of all trades, master of nothing. Ask yourself, what can be done to institutionalize the business so it can live for 100 or 200 years.”
David Kudla, CEO of Manistay Capital Mangement, LLC
Kudlas biggest key to his success was to have a target niche.
He focuses in automobile executives in Detroit. Still, with a shrinking target market, he wholeheartedly believed having a client segment is crucial to advisors becoming more effective. Kudla said, “Do not get diluted with a lot of clients from a lot of different walks of life.”
By having a niche, Kudla explained it can help with client retention. He firmly believes advisors should be careful to not take on too many types of clients. When advisors have someone outside the ideal profile, it makes the firm less efficient. He mentioned that scalability is another benefit of having a focus.
Although it is hard to be picky when starting out, it makes sense when the business becomes more mature.
By having similar clients, “when people walk in the door, you already know them.”
Kudla also feels that advisors “within a niche, can become the go-to person for media.” He added, “Become the expert – it will bring tremendous business building opportunities.”
When moving a firm to the next level, he said, “Institutionalizing processes is important to grow, so others can fill responsibilities where needed.” He went on to say, “Know what you like, so you can delegate the things you do not like to those that are the best in that area. I wish that we had done a better job of building the infrastructure before each next step, so we would have had resources for growth.”
Kudla's last piece of advice was, “Know what your unique value propositions is, especially versus competition.”
Randy Conner, President, Churchhill Management Group
Conner discussed the hurdles firms face in growing, stating, “Any successful organization will constantly bump into limitations where expansion is needed to grow. When a firm is smaller, it usually is in need 1¼ or 1½ of a person, so that needs to be figured out.” Randy went on to say, “In the beginning you are used to doing everything. When it comes to delegating, you need to let go.”
Conner explained the key to where they are now, saying, “The big thing that triggered our growth was really a conscious effort to grow. We made a decision, within the practice, to be an organization with a marketing and sales arm.”
He challenged the advisors in the room by saying, “Look at yourself… and ask, ‘Can I get good at competing for business? If you can’t get better at it, you need to partner with someone.” Randy clarified, “Some advisors focus on referrals for growth because that is what comfortable. Sometimes to grow, advisors need to do what is uncomfortable.”
All helpful advice from three of the industry’s best.