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It’s no secret financial advisors wear many hats. From managing the daily demands of running a business, navigating ever-changing market conditions, maintaining client relationships, hiring staff, and at times, acting as the payroll manager or tech support, chances are “balance” isn’t the word most advisors would use to describe running their business.
But balance is exactly what financial advisors crave.
In fact, at LPL’s Advisor Summit in September, my colleague Marc Cohen and I asked the audience of LPL’s top advisors how they define success. The choices included:
- Find balance
- Maximize earnings and business value
- Expand impact
More than half the attendees selected “find balance.” And, while advisors of every size are searching for balance, achieving it can be a difficult task.
But it doesn’t have to be.
Here are three ways to help you find balance in your business – and perhaps find opportunities for growth along the way.
Create (and update) a business plan
Think of a business plan the same way you think about using a GPS on a long road trip. Using one can give you a sense of your journey – how long it will take, shortcuts and detours to watch out for, potential delays, and where to rest when you need it so you can make it to your destination safely.
Business plan templates can be found with a quick internet search, or you can build your own. If you choose the latter, it should be more robust than simply jotting down a few business goals. The purpose of the plan is to create a document an advisor can use to hold themselves accountable.
While everyone’s business plans will differ in some way, there’s one thing everyone should have: a succession plan.
Cerulli estimates that of the 37% of financial professionals expected to retire within the next nine years, one in four don’t have a succession plan.1
How can this be the case in a profession built on helping clients prepare for the future?
One explanation could be that succession planning has primarily been considered a retirement strategy. The farther away retirement seems, the easier it is to get caught up in the daily demands of business ownership and put long-term planning on the back burner.
Succession planning is the process of identifying crucial positions within your advisory business and developing action plans to fill them. As you review key competencies and the necessary skills to ensure business continuity, you may find that some of your processes and procedures are dated or inefficient.
For example, where are there redundancies? Which time-consuming tasks could be automated? Streamlining your procedures and creating repeatable processes now could free up time for you and your staff to devote to your growth initiatives – and make your business more attractive to potential successors down the road.
A thorough look at your organizational chart can also highlight potential candidates for advancement. Acknowledging your faith in your team and investing in their professional development can be a powerful motivator and retention tool. Planning ahead gives your staff the benefit of time to job-shadow, obtain any necessary securities licenses or certifications, and gain valuable experience that will help position them for success in a senior role. And if you do identify a strong internal candidate for your successor, working together over time gives you the opportunity to share your vision and develop a sense of brand loyalty to your mission and client service model.
If you have a smaller practice, without a visible successor, you might consider adding ways of making your practice as attractive as possible to potential buyers or working with a partner who can find a buyer for your practice in the future – one with a similar vision, investment philosophy, and client service model to ensure your clients experience a seamless transition.
And remember, once you have a business plan, don’t just stick it in a drawer and forget about it. Make sure you update it regularly to align with your evolving business needs.
Talent and culture
As a business owner, you have the unique opportunity to shape the culture of your business from the ground up. Cultivating a positive company culture can have a significant impact on attracting and retaining talent and could also impact how your clients are served.
It all starts with you.
Here are three questions to ask yourself when determining your business’ culture:
- What are the firm’s core values?
- What is the company’s commitment to clients?
- What professional development opportunities are offered?
Regardless of the size of your team (or if you are a one-person band), knowing the answers to these questions can help you create the type of firm that attracts top talent and helps you create long-lasting client relationships.
Optimize your time by ‘right-sizing’ your business
You’re in the business of helping people succeed. However, as your financial practice grows, you may find yourself spread too thin – especially if your book consists of clients with divergent needs, service expectations, and account sizes.
I am a strong advocate of doing “annual hygiene” on your book of business. By doing this, you can identify clients who are no longer a good fit for your service model, so you can offload them. At LPL, we work with our clients to right-size their book of business and compensate them for the accounts that no longer fit their business goals and objectives. Our clients are then able to take that capital and put it back into their business to attract new clients that better meet their business goals.
Putting these tips into practice can help you build scale for your practice, ultimately allowing you to hire staff and even outsource some aspects of your job, such as human capital, technology, real estate, marketing, and compliance, allowing you to focus on the reason you started your business in the first place – your clients.
While it can feel overwhelming to try to do everything at once, try focusing on just one of these strategies and incorporate it into your goal-setting process for next year.
Jeremy Holly is the executive vice president of Capital Partners at LPL Financial
Learn more at www.lpl.com, LinkedIn, Twitter, Facebook, and Instagram.
1Cerulli Associates press release, June 13, 2022
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
