The Planner’s Planner

You’ve probably made some personal New Year’s resolutions for 2008. Most people do. A new year is always a great opportunity for a fresh start. But have you made new resolutions for your business? Have you examined the year that has come to a close to see what you did right and what you could do better? Have you set specific revenue and client goals for the year ahead? Have you thought about what special hurdles or opportunities this year might present? Another word for New Year’s resolution is an annual business plan, and a lot of advisors don’t have one.

You’ve probably made some personal New Year’s resolutions for 2008. Most people do. A new year is always a great opportunity for a fresh start. But have you made new resolutions for your business? Have you examined the year that has come to a close to see what you did right and what you could do better? Have you set specific revenue and client goals for the year ahead? Have you thought about what special hurdles or opportunities this year might present? Another word for New Year’s resolution is an annual business plan, and a lot of advisors don’t have one.

Emily Bach, senior vice president and member of The Bach Group with Morgan Stanley, recently spoke to a group of advisors about the best opportunities in the market for 2008. During her talk, Bach asked the advisors in the room how many of them had a business plan. “Not very many people raised their hands,” she says. “But the really top people out there are the ones that are creating a detailed business plan,” she says. “The less successful ones are sitting waiting for the phone to ring, or thinking about which products they can sell to clients.”

Bach says her team sets up some time after work, orders a pizza and some beer, and talks about what they did well in the past year, and if there are any complaints; if there are, then everyone brainstorms a solution to that complaint. Then they establish individual steps for each of the goals that are established. “Team members are so important. It’s really important to make sure your team is involved in it all, that you like them, that they’re excited about the team goals. We really try to get everybody involved,” she says.

They also spend that time looking at what kinds of opportunities they might be able to take advantage of in the coming year, and try to plan for these. For example, “This market could get very volatile and brutal,” she says. “But that can be an opportunity. You can get a lot of new clients in this kind of market, but that means you have to really be in front of clients. When markets get tough, most advisors hide under their desks.”

If you do make a point to call clients, to assuage their fears, to keep them on top of their portfolios, they may realize it’s not as bad as they, or the media, thinks. They may also start to tell their own friends that you’re calling, and begin bringing in referrals, she says. “We hold more client events, make more client contacts, invite them in more often,” she says.

For some advisors, creating New Year’s resolutions requires some client input. James Ludwick, an advisor with Mainstreet Financial Planning, a registered investment advisor member of the Garrett Planning Network, says his firm completed a survey of its best 40 clients. They sent the survey out on December 31, and to get clients to respond by January 11, the firm offered to make a charitable contribution to the charity of their choosing. “The majority have already reported back to us,” says Ludwick. They gave us very high marks,” he says, “with suggestions in a couple of areas, like attention to detail and clarity of communications,” he says. These are things that are easily fixed, but his firm is going to work harder on those things in 2008, he says.

Of course, he and his junior partner also sat down the week before the New Year to check their success at meeting 2007 goals and to develop a formal plan for 2008. They used a tool offered by Hoursesmouth.com. “I have a junior partner. We did it together, spent the whole day planning and eating sushi,” he says. They set specific goals for new hires and new clients as well as revenue growth—they expect recurring revenue to increase 20 percent in 2008. They also set personal goals that are related to the business, like deciding to book all of their travel plans for 2008 in the first month of the year: This one has already been accomplished.

Of course having a business plan is not the same thing as achieving it. Kenneth Meyers, an advisor with over $300 million in assets under management at Wachovia Securities, says that if you want to make your business plan work, you must have a concrete way to track individual progress towards individual goals. “A lot of people set goals, but don’t really monitor them. They either come up short, or exceed their goals, but not because they planned it that way.”

Every day, one of the team members gathers all the statistics from one of the team’s workstations and runs it through an Excel spreadsheet so that each individual’s daily inflows and outflows of assets, new accounts, retention and revenue goals are tracked. “We know exactly where our business is every day of the week,” he says. “It just makes people very accountable. If all of a sudden you see that you’re 10 percent behind you have to pick up your pace. To me that’s the key to staying on track.”

Meyers was just preparing to enter a four-hour planning meeting for 2008. “We’re going to talk about everything from how to constantly improve our service levels, how we monitor our services levels and upgrade our clientele.” The team also, obviously, sets goals for revenue for the year and new assets, he says. And everyone—including a couple of account administrators, a trader who works on the team and some communications people—participates. “We normally do our meeting in mid-December,” he says. “But this year our hair has been on fire the whole time.”

Here’s to making sure you keep the fires at bay and keep your resolutions on track in 2008.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish