There are two types of independent financial advisors. Both are entrepreneurs but depending on which type you are, the strategies and tactics you employ to grow will vary.

By far the most common type of independent advisor is what I call the Income Statement Entrepreneur (ISE). These advisors are focused on building a consistent stream of income that allows them to maintain a certain lifestyle. This lifestyle could include minimal employee hassles (because they have few employees), great time flexibility, and an income that supports an affluent standard of living. They’re not all that concerned about succession planning because they know that worst case, they’ll either slowly ease out of the business, do an earn-out with a younger associate, have their broker-dealer help facilitate a transition, or, die with a $3 million term policy.

Income Statement Entrepreneurs tend to be incremental thinkers and share the following characteristics:

-- Focus on trying to grow a reasonable 10 to 15 percent per year.

-- Limit calculated risks.

-- Stay within their comfort zone.

-- View the practice and themselves as one and the same—because they are.

-- Enjoy working personally with each of their firm’s clients. 

There’s nothing wrong with this approach; it’s simply a choice to try and maintain a “life is good” existence.

By contrast, Balance Sheet Entrepreneurs (BSE) are focused on turning their practice into a viable business that has ongoing value and is a distinct entity from themselves. They’re very concerned about succession planning because they view their business as an asset that delivers dividends (in the form of a current income stream) and a capital gain (when the business is sold).

Balance Sheet Entrepreneurs are order of magnitude thinkers and share the following characteristics:

-- Focus on 5x or 10x growth.

-- Take calculated risks to pursue new lines of business and new avenues to attract clients.

-- Stretch their comfort zone even if it means occasional failure.

-- Aggressively add technology to increase efficiency and scale.

-- Take a MBA-like approach to growth and profitability.

Rather than a “life is good” attitude, they think “I really want to make an on-going impact.” They want to use their business to play on a large stage and impact more people. They believe that if you’re not growing, you’re dying.

What’s the dividing line between an ISE and a BSE?

It’s not a specific revenue number or a certain number of employees. Rather, it’s an ensemble of characteristics as outlined in the chart below.

In addition to the above distinctions, the advisor’s attitude is a distinguishing factor. Advisors have to consciously decide which type of advisor (entrepreneur) they are. One of the problems I run into as the head of a coaching company is the internal conflict experienced by advisors who feel pressured to be a BSE when in reality, they’re happy being an ISE. The conflict results from a grown-up sort of peer pressure that glorifies top producers and an industry that revolves around more is better.


For the moment, though, let’s assume that you want to be a top-producing BSE. Here are the two things you need to make that happen.

A desire to become one.

A willingness to do what it takes to become one.

That’s it. If you have these two, you will find a way to get to the top.

Now, number 1 above is the easy part. It’s easy to say you have a desire to become a top producer. Number 2 is where the rubber meets the road. It’s where success is spelled h-a-r-d w-o-r-k.

So, the single point from my post today is this: decide which type of advisor you are. If you want to be the ISE then embrace it, be proud of it and don’t feel conflicted about thinking you should be doing more. If you want to be a BSE, then go for it. Make the commitment right now that you will do everything it takes to build a real business that has broad impact and creates ongoing value.

Executive Business Coach Greg Opitz contributed to this post.  


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. To learn more, visit, and




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