Financial advisors who are serious about meeting the expectations of today's affluent investor have an enormous problem, and an enormous opportunity, in the wake of the financial crisis. Our research shows that eight out of 10 affluent investors are dissatisfied to the point where they would change advisors if they found a better alternative. The message is screaming out loud and clear: financial advisors are NOT capitalizing on the affluent dissatisfaction brought on by this crisis.
And it can't be because advisors are unaware of the opportunity. So the million-dollar question is, why? Why are so few, just about 2 percent, taking full advantage of the chance to strengthen relationships with their current affluent clients, to penetrate their centers of influence, and to acquire their dissatisfied friends, colleagues, and family members as new clients? I'm not sure that there is one easy answer, but our research on advisor marketing activities is revealing.
Increased marketing activity and improved results from marketing are correlated with better advisor career satisfaction. It is apparent that financial advisors should put more time and effort into executing the “high results” marketing activities.
The Improvement Challenge
Because advisors are confronting fierce pressures from all sides, we find them falling into two categories. The first are FAs who are paralyzed like a deer in the headlights, and they're not doing anything. The second group of FAs are taking on more than they can possibly handle. Fortunately, most advisors appear to be in the latter group; at least they are trying to change.
We are creatures of habit, and we naturally struggle with making any serious change, whether it's in our personal lives or in business. Because of this crisis that we've all been dealt, it's even harder to make too many changes all at once. This creates sensory overload, and it can derail the best of intentions.
The following questions are designed to help you assess whether you're caught in the improvement trap. If you answer “yes” to any of these questions, there is a high probability that you're dealing with this trap to some degree.
- Have you discussed grand goals that sound good but have yet to get broken down into fixed daily activities?
- Have you found yourself more reactive than proactive?
- Have you committed to making specific changes (segmenting client base, adding wealth management services, etc.) but find yourself struggling in the implementation?
- Are projects talked about without any follow-up?
- Are roles and responsibilities of team members a bit blurred?
- Does there seem to be too much on everyone's “to-do” list?
Making Improvement Your Reality
Take one hour and plan your next four to six weeks using a simple 5-step plan that will enable you to incorporate process improvement into your practice.
Step 1. List all current projects (marketing, service models, role clarity, etc.).
Step 2. Split these projects into weeks; one to three projects per week.
Step 3. Declare a moratorium on new projects for the next 30 days.
Step 4. Delegate roles and responsibilities specific to each project.
Step 5. Hold individuals accountable for weekly completion (within project timeline).
This incorporates chunking, a key management concept, into the mix. The idea behind chunking is that if we commit to accomplish too many things at once, we overload and shut down. According to the experts, the maximum number of tasks we can set out to accomplish at one time is between five and seven. So to avoid the improvement trap, start with one to three and then follow the 5-step process.
Whether it's client acquisition, developing distinct service models, or jettisoning smaller clients, these five steps allow you to focus on completing one to three projects per week. This will give everyone in your practice a weekly sense of accomplishment, as opposed to causing them to feel overwhelmed by the number of projects that need to be finished.
Think in terms of fewer projects and more timely completion. This also translates into fewer steps and more accountability. Once an area is improved, you can take this 5-step improvement process to another area.
is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients.