When Everything is Great, Why Worry?

Dear T.I.,

How has the practice done in growing the business prior to 2021? Do you have consistent approaches you’ve implemented outside of deepening the relationships with the estate attorneys? Have you tried other things and failed? How many clients are referring now and why do you expect there are more opportunities than you’ve been given for new introductions?

If we were having a conversation, these are the questions I’d start with to understand where you and your advisors are coming from. Just about every firm I work with, from the smallest to the largest, has been setting records on new AUM and clients over the last few years – and last year was a particularly strong year for most of them. I often reflect on how a rising tide will float all boats. Is it possible every single firm is doing the best job in finding new business, or could it be there is a lot of money circulating and investors need a place to put it, many Boomers are retiring and seeking financial help, people changed their view on their finances and lifestyle during COVID and a strong market attracts new investors. If these things are on point, then preparing for when this either slows down as investors get more nervous or things shift dramatically in the business is a good idea.

I don’t see why it is ever bad to:

1. Establish a plan for desired outcomes. Set clear quantitative and qualitative goals for both what you’d like to achieve in new clients and new AUM but also where you’d like the new opportunities to come from. For example, does the team want to expand the concept of COIs past the two you have or learn more about clients and how they are connected to others? Having goals is important no matter how well you are doing.

2. Review what’s working well, but discuss what’s not. You had a great year, and the team is doing well. That’s cause for celebration, but how did 2021 look relative to 2020? How did 2020 look relative to 2019? Are you examining your business to identify your areas of strength and your areas for improvement? Even the most consistently successful businesses do this to stay successful. Continuous improvement should be your mantra.

3. Talk to your advisors about aversion to change. Is it because everything truly is rosy and could not be better, or is it because they don’t want to upset their world and try out and learn new things? This is human nature, so no judgement. But it could be helpful to have an open discussion about why they are resisting your ideas.

If you are perfect, there is no room for improvement and you are running the model firm, then you can relax and turn your attention to raking in your profits. But if your practice is like every other firm I’ve seen, there are always opportunities to have open dialogue and figure out if there are ways to do better.

Dear Bev,

I like my downtime. I live on a farm and have over 40 animals. I enjoy being there and spending time with them. I have a very lucrative practice with about $150 in AUM and extremely high profit margins. I tell you this because my wife, for Christmas, paid for me to work with a coach. She believes I am not meeting my potential and I spend too much time focused on the farm and “trying to be a farmer when I’m not” (those are her words).

To me my life is fulfilling – challenging and relaxing.

The coach is biased because he tells me I am not living up to my potential, leaving a lot of business on the table, working less than I should at my age (I am 43 years old).

Isn’t it up to me to decide what my practice should look like, how hard I should work and what fuels me to do my job?

By the way, my clients love the fact that I am also a farmer. They want pictures of my animals, and they know if they call me and I am mucking out a stall, I am going to respond to them and do whatever is necessary. It’s not like I am abdicating my advisory responsibilities; it’s that I have other passions in life and I want to fulfill them while I am young enough and have the energy. My wife and I have no kids and I make a very, very good living. I’m looking for validation that I am not a dope to be overlooking this coach and his advice.

A.C.

Dear A.C.,

Does your wife know how happy you are living the life you are living? Does she need something financially she believes you could be giving her if you were making more money? Have the two of you talked about values and goals, hopes and dreams? I know I sound like you with your clients in making decisions. But I can’t help but think you aren’t communicating effectively with your wife and so you have now landed with a professional coach who is going to push you to do more and do better. That’s what he is being paid to do!

Your wife might see something you are not seeing. You paint a very positive picture, and it could be accurate. But does she see you overly tired? Or leaving opportunities unaddressed because you turn your attention to the farm and might miss on the business side? Having a nice dinner and an open dialogue just like you likely would steer your clients to do seems to make sense here.

A coach should understand your goals and objectives, and identify what success looks like to you. Instead of pushing you to do more, he should spend time clearly establishing how you will measure success and what you most care about. If this isn’t happening, tell your wife she is wasting her money.

The two of you could sit down and determine where you have differences of opinion in goals, priorities, financial desires and lifestyle. I know you know this – the cobbler’s children with no shoes is a phenomena that many business owners can relate to. But there has been something missing in the translation.

Be passionate about your work as an advisor, be available to and supportive of your clients in ways that matter to them and make a good living. But I don’t see where you should trade off something that is fulfilling and important to you as long as you can manage all of it.

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. She is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. 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, MSNBC.com, 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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