PHOENIX-- Practice management in the financial services field is as nebulous as it is important, forcing broker-dealers and their militia of financial advisors to constantly reassess what more they can do to grow their book of business and at what cost.
During an educational session at the OneVoice 2011: FSI Broker-Dealer conference, a panel of marketing experts and one self-effacingly "clueless" independent broker-dealer executive weighed in on the challenge of motivating financial advisors to grow their client base, manage compliance issues and install meaningful continuity and succession plans without neglecting their existing roster of clients.
"When I meet and visit with possible recruits, they always ask me about practice management," Rick Murphy, executive vice president at Berthel Fisher said. "And my first response is always the same: 'What does practice management mean to you?'"
For most financial advisors, it really boils down to networking, client retention and client growth and eye toward the end game when it comes time to sell their book of business on their way out the door.
Here are seven valuable marketing and sales-growing tips for financial advisors and managers charged with creating some urgency within their ranks:
Know yourself and your clients: The size of your branch, the size of your staff and the number and type of clients you're servicing will determine whether or not you're capable of creating, implementing and installing an effective practice management program from scratch or if you have to outsource it to specialists.
"As a small firm, we do branding and marketing and collateral material but for most part, we outsource it," Murphy said. "Most of our reps are operating on a smaller margin and coming to them with another charge, on top of a ticket charge or a technology charge, is a hard sell."
I wish we had more resources, but we don't," he added. So we have to utilize the ones we do have to get the biggest bang for our buck."
Sell It From Top to Bottom: Whether you're turning to an outside consultant or specialist like Bill Good or Bachrach & Associates or developing initiatives in-house, you need sign off from the highest levels of the management and commit yourself to getting the whole crew of financial advisors to buy into and actively participate in the program.
"To deploy actionable strategies to you have build the bridge as you cross it," Duncan McPherson, co-founder and co-CEO of coaching and consulting firm Pareto Systems said. "You can't want it more them. [Financial advisors] themselves must have some form of skin in the game.
Promote the Long View: Human nature dictates that most professional, financial advisors or otherwise, become too consumed with the here and now and don't put enough thought into the transition and succession of their book of business until it comes to time to leave. Then they suddenly get real serious about organizing and fairly valuing their client roster.
By making every advisor, regardless of tenure, make a concerted effort to keep their customers' information current, detailed and organized, it not only makes it easier to transition when the time comes, but keeps compliance issues in check along the way and creates more opportunities to offer new services and products to clients.
This is especially true for firms that offer forgivable loans to advisors who acquire clients from departing employees. Anything you can do upfront to make it simple, clean and assure client retention improves your chances to increase revenue and get recover your investment.
Networking and More Networking: It may be a cliché but that doesn't make untrue. Having advisors involved in the community increases opportunities to promote your products and services and raise the profiles of both the broker-dealer and the individual advisor.
This is especially true if you can establish relationships with human resources contacts at companies of any size. Having a captive audience of check-earning potential clients can bring net either a corporate account or some individual clients looking to start or upgrade their investment accounts.
Document Your Business: Seems obvious but often financial advisors, particular those of the long-tenured variety, tend to rely too much on their assistant or assistants to manage the day-to-day needs of their clients.
While this may free up financial advisors to garner new business -- or play more golf -- there's a substantial risk that too much information and too many relationships could evaporate overnight if any and all pertinent client data isn't entered and regularly updated in a customer relationship management (CRM) system or some other documented fashion.
"I've seen clients who've admitted that their entire business is inside the head of one of their assistants," MacPherson said. "Take responsibility for your clients and have the systems in place to monitor and sustain them. Trust is what creates a durable business and competitor-proof clients.
Master the Art of the Referral: Networking and schmoozing is a good start but those efforts will be wasted if you're not able or willing to ask for a referral. While some financial advisors believe asking an existing client for a sales lead shows weakness or desperation, it's the process by which most top customers are discovered.
"Some people think of it as asking a favor from a client," MacPherson said. "Create templates and scripting that will help you reposition it as a service for your client. Compounded over time, the results are there."
You're the CEO of Your Business So Develop a Business Plan: It seems obvious but for advisors buried in the day-to-day hustle with new products, client obligations and increasing compliance and regulatory issues to contend taking the time to develop and follow a business plan of their own often never materializes.
"I'd say 86% of advisers admit they've never had a business plan," said Jim Komoszewski, first vice president and director of the strategic business unit at National Planning Corp. "Basically, they're saying they achieved their success by dumb luck."