In the past 11 years, we’ve had two major bear markets and experienced the near collapse of the world financial system. Not surprisingly, many advisors lost revenue, lost clients and some even lost confidence in their ability to protect their clients’ assets during times of turmoil. Yet during this 11-year period of global upheaval, a select group of advisors prospered.
The good news is if you act now, you have the opportunity to become one of those select advisors who prospers over the next 11 years—regardless of what happens in the markets or the economy. The successful advisors of the future are the ones who are planting new seeds now and proactively taking control of their businesses.
In my work with top producers, it’s clear that they possessed several characteristics and a way of thinking that separated them from mid-level producers over the past 11 years. These three are worth emulating.
Three Characteristics of Top Producers
1. Incremental Thinking Vs Order of Magnitude Thinking.
Let’s say you are a $250,000 producer today and your goal is to grow to $500,000. You can hit that goal using incremental thinking, i.e., working a little harder and making minor tweaks to your business plan. Conversely, if you want to grow from $250,000 to $2.5 million, then you need to engage in order of magnitude thinking, i.e., making major changes to your strategy coupled with better execution.
Top producers are order of magnitude thinkers. They realize that to reach a new milestone in their business, they have to continually reinvent themselves. What got them from $250,000 to $500,000 in production did not get them from $500,000 to $1.5 million, let alone $2.5 million in production.
Another way to view this idea is to picture your business along a growth curve. Incremental thinking will help you move up along a curve, whereas order of magnitude thinking jumps you up to an entirely new curve.
To become an order of magnitude thinker, try this simple exercise. Take your 2010 production and multiply it by 10. Now, ask yourself, what business model would you have to create in order to have a reasonable chance of growing your business by a factor of 10 in the next 5 – 10 years? Stumped? Here’s the good news. Those models exist and all you have to do is find them, study them, and decide if that’s a model you want to pursue.
For example, if you have $100 million in assets under management and you want to grow to $1 billion, then simply find the asset management firms that have $1 billion in assets under management and study how they got there. Call them up and ask them. You’d be surprised at how approachable they are if you are respectful, humble, and sincere. Ultimately, you don’t have to copy verbatim what they did but you can use the trail they blazed as a guide for the various ways to reach your order of magnitude goal.
2. Hail Mary Vs Blocking and Tackling
For many years, the Nebraska Cornhuskers have been one of college football’s preeminent teams (okay, they slipped a bit in the 2000s for you non-Husker fans). They’ve been consistently ranked in the Top 20 and have won five national championships since 1970. Yet, rarely have the Huskers had a highly touted recruiting class. Instead, Nebraska took good players and made them great by focusing on the fundamentals of blocking and tackling (and by feeding them a heavy dose of Nebraska steaks!)
Often, advisors come to one of my presentations and ask for that “Magic Bullet” that will change everything for them; the advisor equivalent of a completed “Hail Mary” pass that wins the game. Unfortunately, there is no “Hail Mary” pass for advisors. Rather, at its core, winning the “National Championship” in the advisory business requires the advisory-equivalent of blocking and tackling. It’s taking a great game plan and executing it flawlessly.
Top producers focus on blocking and tackling. Rather than trying to skip these basics and going straight to “the good stuff,” advisors would be better served by focusing on the nuts and bolts of building a great business such as consistently using systems and checklists, building deep relationships, always asking for referrals, and delivering a quality financial planning and investment process. Ironically, advisors will find that the nuts and bolts are the good stuff. By engaging in order of magnitude thinking and focusing on blocking and tackling, top producers combine the power of the mind with the power of fundamentals to generate powerful results.
3. The Earth is the Center of the Universe vs. Continuous Learning
For more than 1,500 years, the learned of society believed that the earth was the center of the universe. Then, in the early 1500s, Nicolaus Copernicus challenged that view and said the earth revolved around the sun. He was followed by Galileo Galilei, who championed the Copernican system but was met with such stiff resistance to the idea that he was forced to spend the last eight years of his life under house arrest for “vehement suspicion of heresy.”
People from 500 years ago had a terrible time giving up the ingrained idea that the earth was the center of the universe. Even in the face of solid evidence from Copernicus and Galilei, they still clung to their cherished, age-old beliefs. By contrast, top producers are the Copernicus and Galilei of today. When the facts change, they change.
Our world changes so fast that if you don’t continuously learn, you and your business will atrophy. Top producers read books. They talk to other successful people and ask what makes them tick. They’re curious about business and life. They attend conferences and network with other attendees. They immerse themselves in the world and experience it. And, like Copernicus and Galilei, they keep an open mind. If new information supplants the old, they happily discard the old rather than cling to the past.
As a continuous learner, top producers learn more than they forget and by doing so, they grow. Equally important, top producers are discerning. They know that not all knowledge is equal. They have the ability to discern the valuable knowledge from the fluff and move forward with that knowledge accordingly.
While these three concepts seem rather simple, it’s how deeply you implement them that gives them their punch.
One of the pleasures of being an author is doing book signings and chatting with the folks who take an interest in what you are writing. Every once in a while, though, you come in contact with someone who just makes you shake your head and ask, “What was that all about?” That happened recently.
I was doing a book signing at a broker dealer conference for Avalanche: The 9 Principles for Uncovering True Wealth, a book co-authored with Ron Carson. A financial advisor walked by the table, glanced at the cover and then walked away. Not wanting to let a sale slip by, I caught his attention and he turned around and said, “I don’t have an interest in anything that has the word ‘wealth’ in the title.” Having never heard that objection before, I asked him what he disliked about the word “wealth.” He said that it’s overused and he doesn’t like what it stands for. Coming from a financial advisor, I thought that was rather strange.
What this advisor failed to discover is that the word “wealth” in our book, Avalanche, does not stand for financial wealth. It stands for True Wealth, which we define as, “All that we have that money cannot buy and death cannot take away.”
By only taking a cursory review of the book title, this advisor failed to see the true meaning. He didn’t examine it deeply and he missed out. The same is true with these three keys. If you only skim the surface and say, “Yeah, this stuff is pretty simple and there’s nothing new here,” then you’ll miss out on the true value.
The advisors who read this article and “go deep” with these three keys, who embed them into their very fiber and act on them, will be the same advisors who 11 years from now will have grown their business and improved their quality of life by an order of magnitude. It’s lonely at the top because it’s human nature for people to reach a level of comfort and then settle at that level; a level which is often well below their intrinsic potential. People get to a point of viability and then stop challenging themselves. They stop thinking bigger. They stop focusing on the fundamentals. And they stop filling their knowledge bucket. By contrast, those at the top keep stretching and not only do they reap the financial rewards, but they also reap the emotional rewards of reaching their full potential.
Reaching your full potential is not limited to your success as an advisor. You have multiple dimensions to your life that include your relationships, your spirituality, your legacy, and your health. Settling in any one of these dimensions means you’re depriving the world of the gifts you have the capability to give.
At the end of your life, if you look back and lament on a life that fell short, then we’ve all lost. French writer Andre Gide wrote, “Man cannot discover new oceans unless he has the courage to lose sight of the shore.” Folks, now is the time to leave the shore.
Steve Sanduski, CFP, is the managing partner of Peak Advisor Alliance, a financial advisor coaching and practice management resources organization. He is also a New York Times Bestselling author and co-author of Tested in the Trenches: A 9 Step Plan for Building and Sustaining a Million-Dollar Financial Services Practice. For more from Sanduski, visit his blog. Also visit here for more information on where Sanduski will be presenting live content to advisors.