Best Practices for Business Development

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

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Dear Bev,

We recently hired a salesperson to find new opportunities for our advisory firm. It’s not working out very well. My advisors don’t want to work with him because the commission I have proposed would take away from their pocketbook. How should we successfully integrate a salesperson?

Matt D., New Jersey

Dear Matt,

This is a common problem among financial advisors. I spent most of my career in sales, so it’s an important issue to me.

While direct selling is very ingrained in the institutional, mutual fund and defined contribution areas of the financial services industry, it’s a continual struggle for most financial advisors to figure out the best way to build their businesses. I have found that “sales” is perceived as a dirty word. We prefer to call it “organic growth” or “business development” when it comes to advisors.

Your advisors are the closest to your clients. Industry research tells us that greater than 50% of new business comes from referrals, so teaching your advisors how to sell is always the best approach, but sometimes they just won’t do it and you might have to bring in a professional salesperson.

Here are some best practices for making this work more effectively.

Make sure the salesperson you hired is also a good coach and mentor for the FAs. If he is only focused on “hunting” new, external opportunities, and not willing to work side-by-side with your advisors, they will resent or reject him. Be sure you have hired someone who is a “partner” and not just a “sell at all costs” type of person and will work closely with your FAs to strategize, plan and follow through.

Have a clear sales process. How does the handoff happen? When does the FA have to come into the process to talk with a prospect? How much do you expect the salesperson to lead the process? What does a “qualified” prospect look like? Often people don’t work well together because of a broken process. Be clear about expectations for everyone.

Review the compensation structure. Firms who only compensate the salesperson for new business and do straight salary with a “bonus” or have a small carrot associated with new business, but no significant impact on whether there are new assets or not (important note: “new” assets are not from market performance; they represent additional capital from a client), often find their FAs resistant to selling. Make sure the compensation plan is motivating the behaviors you want and is not acting as a disincentive.

Create a sales culture. Have each person – the FA’s and the salesperson – write a plan for business building and share this with the rest of the group. Which clients have provided referrals? Who should be referring? Which centers-of-Influence exist and who is best in the firm to manage these relationships? What goals does each individual have? What tools or support are in place to meet the goals? Once the plans are written, be sure to have (minimally) once every other week meetings to discuss pipeline and progress. Create a structure to talk about the sales process. Don’t leave it up to the new salesperson to track people down and present updates. Formality of some sort is very important.

Communicate progress, or lack thereof, to the entire team. Track what’s working and what’s not and push it out to the rest of the firm. Be sure to give public credit when the FAs or the salesperson has contributed. Keep the lines of communication as wide open as possible so everyone knows what everyone else is doing and can learn from one another.

These are just some of the things I’ve seen work among my clients. As a start, review this list and see if there is an area you can shift for greater success.

Good luck!

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).

She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal,, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.

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