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How To Build a Successful Financial Planning Practice

How To Build a Successful Financial Planning Practice

The American College of Financial Services
March 4, 2019

When starting a new business venture, there is always a huge financial risk. Independent advisors take on the burden of overhead, technology infrastructure, liability and staffing. As an advisor, you may have the “luxury” of an in-place Operations team, existing technology and a beautiful office building at your disposal, but none of those replace your responsibility to produce. If you don’t bring in clients and grow a successful book of business, you’ll be out of business and looking for a new career opportunity. But for all the risks, the rewards can be tremendous, exhilarating and even more importantly, unlimited.  

building-financial-planning-practice.jpgSo how do you achieve success in an arguably risky career path?  By focusing on building your practice, growing assets under management and creating stability within your book.  You can easily get sidetracked in this business—the constant networking, the naysayers, suffocating from competitive pressures, unending amounts of information at your fingertips—all of these factors can make it difficult to stay focused on building your book. Prevent distraction and keep your eye on success by following a few key tips that will make growing your business a priority initiative. Target the right market, deliver unparalleled client service, and surround yourself with the most competent, well-intentioned, ambitious and authentic people you can.

When you do, you’ll see your business move in the right direction.

Target The Right Market

To effectively build a stable and lucrative book of business, you need to determine what kind of clients you want to work with.  Is your goal to be an advisor who services nothing but High Net Worth individuals or are you aiming for a more financially diverse client base?  Do you have a special knack for building rapport with a certain type of person? Do you have a large referral network within a particular industry that will help you quickly build references and proof of capabilities? Considering your ideal audience is a paramount first step in building your practice because without it, your attention and focus can get diluted.  When you understand who you want to work with, you’ll make purposeful decisions about your prospecting techniques, marketing and advertising opportunities, and networking schedule, and gain a better understanding of what product knowledge you still need to master to become a sought-after and credible resource for prospects and existing clients.     

You don’t necessarily need to target just one or two client segments but if you become too broad in your focus, you may have difficulty developing a competitive advantage within any one particular niche. You have no shortage of stress and must-dos to contend with when you begin a career as a financial advisor—it doesn’t matter if you’re fresh out of college or an experienced professional making a career change. Some advisors have certainly built thriving practices comprised of ultra-diverse client bases, but for a new advisor, focus is key and can help you avoid the trap of working harder, not smarter.     

Set the Client Service Standard Sky High

Trite as it may seem, this is a fundamental that can never be overlooked.  Shockingly, however, it is. The reputation you create for yourself in this overly commoditized profession is career gold and without it, you’re just another body in a sea of competition, offering, for the most part, the same thing as the guy down the street. Remember, without genuinely happy customers, loyalties stray and your practice will never achieve and maintain growth. Exceptional service is a must in your prospecting activities just as much as in the service delivery phase of your career, and with the exception of some extra-demanding individuals, it doesn’t take much to WOW people.  Here are a few ways to set yourself apart:

Do what you say you will: Don’t cancel meetings, be on time for phone calls, and deliver paperwork on the agreed upon day. Your word is everything and abiding by it establishes the trust necessary for a long-term relationship.

Be transparent: Sometimes, even with the best of intentions, you’ll make a mistake. Maybe you’ll flake and completely overlook a meeting on the calendar.  Maybe you’ll suggest an investment that grossly underperforms. Mistakes happen and rather than avoiding a difficult conversation, own up to the error and if necessary, apologize.  You’re human, your clients are human and to err is human.  Be the kind of advisor who can not only acknowledge mistakes but also overcome them.

Give 110%:  You’re in the Financial SERVICES industry. Your job is to service and you should make every possible effort to do it well.  You don’t control market performance and you can’t control unpredictable life, economic or client circumstances.  But you can certainly control your behavior and your commitment to your clients’ success.  Make them feel good by genuinely smiling, extending a call or a meeting a few minutes longer than scheduled, send birthday wishes and offer timely condolences. Be proactive, responsive, honest, kind, empathetic, sincere, and dedicated. Listen with both ears and full attention.  Be and do the things that so many other advisors won’t and you’ll establish the type of client relationships that last through generations.

Keep Good Company

Life as a new advisor, while full of diversion, is often a solo-act and it’s every man for himself.  Even within team dynamics, you are responsible for your own level of production and contributing to the growth of the business.  But the people you choose to surround yourself with can make a tremendous impact on your success (or failure). From hiring the right partner or administrative assistant, to the office colleagues you approach for advice or camaraderie, the lessons you learned as a child about choosing the right friends applies to your role as a financial advisor well.   

If you’re in a position to hire teammates, hire ones who are just as (or more) ambitious and competent as you are.  Make sure they can provide proof of ability and references. Often your admin will be the first line of contact for your clients and it’s critical to choose office personnel who will enhance your clients’ experience. 

If you’re an advisor at a larger firm, the inter-office relationships you pursue can either strengthen your performance or be detrimental to your productivity.  Do you want to be the guy who’s joking around with colleagues during market hours and in between meetings, or the guy who’s attending a lunch and learn about a new asset allocation portfolio soon available to clients? Don’t be tempted by “fun” office distractions because there will be many. Did you get into this business to have fun or to create wealth and opportunity for you and your clients? Keep your focus on doing the things that will make your clients more successful and you will be successful in building your practice.    

When All Else Fails

You’ll never be fully protected from risk in this industry and there will always be obstacles to overcome, but when all else fails, focusing on the three tips in this article will ground you and bring you back to a place of doing the right things, for the right people, for the right reasons.  Financial advisors who make these tips a priority will be the ones who grow, succeed and enjoy the freedoms, fulfillments and financial rewards that outweigh the risks and challenges of such a demanding profession.