As 2015 comes to end, I’ve had the opportunity to learn some important lessons this year about what it takes for advisors to have a leading edge and how to guide exceptional teams.
Some of the lessons are new, based on research our firm has conducted and actions taken by the advisors we work with. Other lessons come from trends facing the industry: compensation models, technology, and intergenerational wealth transfers to name a few.
Each of the lessons serve as a roadmap as we head into 2016.
In the next few weeks set aside some time to think about your business and answer, “Where are you today?” “Where do you want to go?” and, “What needs to happen to fill the gap between the two?” Then, make a commitment to chart your course of intentional action that includes at least some of the following five topics that focus on the future success of your firm.
1) Appoint and Support a Chief Compliance Officer
Most of us dread the word compliance. It’s challenging, it’s boring, and it’s something most of us simply don’t like. Like it or not, compliance is an area you need to focus on in the coming year. The stakes are getting higher and rules are more complex. Ensure your compliance officer is prepared, properly empowered as a senior officer, and has a strong knowledge of your firm’s business model, relevant risks, and is located on-site.
A Chief Compliance Officer in your firm plays a crucial role in fostering integrity in the securities industry. Responsibilities include, but are not limited to, ensuring the firm complies with the rules that apply to operations. CCOs should work with senior leadership to instill a culture of compliance, nurture an environment where employees understand the value of honesty and integrity, and encourage everyone to take compliance issues seriously.
If you utilize a third party for compliance, read the latest report from the SEC regarding outsourced compliance professionals.
2) Utilize Technology
Top advisors view new technology as an opportunity rather than a disruption. Many advisors believe that only the younger generation is interested in new technology; this is a big misconception. The digital transformation taking place is an opportunity for you to improve the client experience and utilize new software to enhance client reports.
Client expectations have changed as consumers utilize online resources as a first step to find products and services; financial advice is no exception. Clients and prospects of all ages want digital access to their accounts and their advisor. They also want an up-to-date, interactive website. If you haven’t made it easy for clients to access their accounts and communicate with you online, you are falling behind.
3) Differentiate Your Firm
A question that continues to come up time and time again is, “How do I differentiate my firm?” A recent Pershing Study cites 60 percent of investors found it hard to distinguish among advisors because most said the same things and made the same promises.
One of the best ways to set yourself apart is to create a client centric advisory practice. Build the client experience so there is no question that your clients’ needs come ahead of your own. Not only will your clients know exactly what to expect, they will be confident in providing referrals to your firm. Establishing a client centric culture and trusted brand will differentiate your firm far more than your fees or products.
4) Create Strategic Alliances
Business growth doesn’t come from wishful thinking. As you know, it takes a lot of hard work. Coordinating the right mix of strategies to gain market share and improve client acquisition rates is essential to advance your firm in today’s economy.
Uniting with attorneys, insurance agents, CPAs, and other professionals is one of the best investments you can make for your firm. While cost and skill sharing are notable reasons to form an alliance, an association with suitable partners will extend the depth of your team and provide a means to offer clients a full spectrum of services.
Pay attention and anticipate the evolving needs of your clients. During client meetings restate the services you offer, communicate value, and express the meaningful role you play in their lives. Our team created a step-by- step workbook to help you create successful alliances. Be sure to download the workbook here.
5) Build a Team Infrastructure
Teaming is no longer an option, it is a necessity. As your firm becomes larger, everything becomes more complex and it becomes very difficult to grow. Advisors typically find themselves working in the business rather than on the business. Get out of the weeds by hiring ahead of growth. Determine what you are good at. If you are good at looking at the big picture and financial planning, but not so good at implementing details, mentally free yourself by delegating and ensuring you have the right human capital on your team.
A successful team is a group of financial advisory professionals who rely on the team rather than an individual to serve and manage client relationships together as one unit by combining skills, time, and expertise. A team
model leads to a more collaborative environment. Clients like knowing that, besides the business owner/advisor, there are other professionals working on their behalf. Build your infrastructure so you can grow into it.
It’s imperative to operate your business at scale by allocating and optimizing resources to achieve the best results. Make it a priority to get to scale so you don’t have to play catch up and then try to compete.
“Everyone wants to live on top of the mountain, but all the happiness and growth occurs while you’re climbing it.” -Andy Rooney
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