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Jumpstart Needed

Unless you're superhuman, chances are good that some aspect of your practice is in need of tweaking. We're here to help. This new column will take challenges confronting real-life advisors and place them in front of a panel of experts who will weigh in on the best way to proceed. In this inaugural column, three experts Philip Palaveev, senior manager of Moss Adams; Lloyd Williams, an executive coach

Unless you're superhuman, chances are good that some aspect of your practice is in need of tweaking. We're here to help. This new column will take challenges confronting real-life advisors and place them in front of a panel of experts who will weigh in on the best way to proceed. In this inaugural column, three experts — Philip Palaveev, senior manager of Moss Adams; Lloyd Williams, an executive coach from Dawsonville, Ga.; and Harold Buckner, vice president of practice management for NFP, in Austin — provide counsel to a novice looking to jumpstart her practice.


Two years ago, after 33 years as an elementary school teacher, Joanne Amorosi retired from her job and eagerly jumped into a second career as a financial advisor. For years, financial planning had been her passion; she managed her own portfolio and often served as an unofficial advisor to friends and colleagues. So when she became eligible for her pension, Amorosi felt she was well suited to hanging out her own shingle.

She also had a mission: to educate women in business about finance. “I want to demystify financial planning,” she says. “I've found that even successful women have been spooked by it.” Her plan was to start by cultivating small business clients, later using that base as a stepping stone to women business owners.

After getting her CFP in the summer of 2003, Amorosi searched around and decided to hook up with Westchester Financial Partners, in Tarrytown, N.Y., a general agency affiliated with MassMutual. That way, she could sell insurance and mutual fund products, but also have access to specialists and other resources. Plus, the company would handle compliance matters for her. And, with a CPA and estate-planning attorney also working on site, she figured she'd have a ready-made team of colleagues to call on when doing financial plans. Amorosi got a Series 6 and 63, and plans to get her Series 7 down the line.

Of course, there would be a price to pay for receiving those services. Almost half of her $160 a month fee for rent, phone and other office services went to the main office. And, her commission ended up being just around 2 percent.

After a few months shadowing other colleagues, Amorosi officially opened for business a year ago. So far, she's landed about 15 clients, most of them friends of friends, although a few came from educational seminars she's put on for teachers in the area and from workshops on annuities she conducted jointly with her colleagues. She hasn't done much financial planning; almost all the business has been product focused — setting up 529 plans, say, or selling life insurance.

But, for Amorosi, it's all been a prelude to her real goal. The first step, she says, is to target small business owners by running seminars, set up through local chambers of commerce. With years of experience speaking at state and local conventions of educators, as well as boards of education — not to mention her years as a teacher — she figures it's her natural venue. Her topic: The six things likely to destroy anyone's business — failing to set up buy/sell agreements among partners, for example — with solutions to each problem. She ran her first one in June.

She's working with her CPA colleague, who has a lot of small business clients, to learn more about the market. Eventually, she hopes to run seminars aimed specifically at women. She won't start doing that for a year or so, she figures, but she's already started networking. For example, recently, she attended the annual conference of the Center for Women's Business Research, “to get my feet wet,” she says.

With about $30,000 in commissions, Amorosi is aware that she has a long way to go. Still, she relishes the challenge. What can she do to hasten the maturation of her practice?


Harold Buckner:

Given the fact that she's just getting started, I think this advisor needs to put in place her own strategic business plan. But first, she should be clear about her personal goals, so she can align those with her business objectives. What does she want her life to be like in the next three years — how hard does she want to work? How much income does she want to make? How much money will her business need to generate?

Once she's clear about those objectives, she can go through the process of putting together a business plan. She'll need to answer such questions as: Who is her ideal client? What services and products will she focus on? How does she want to set up her office to best serve her clients? Then she can analyze the gaps that exist between where she is today and where she wants to be.

The really critical issue is how she's going to stand out from the crowd. I think the key to what's going to help her differentiate herself is her ability to provide her clients with an education, in addition to other services. That's her strong suit and she should take advantage of it.

But she also has to be honest with herself. Working with closely-held businesses will mean developing knowledge in areas she doesn't know a lot about. There's going to be a lot of heavy lifting. Given her experience as an educator, is she really best suited to work with businesses? I think she's in a good position to focus on educators. And, if she does so, she'll still be able to work with women and address her larger goals. Her experience is as an educator. I think she should stick with that.

Lloyd Williams

I think she could have a nice practice with just teachers. Teachers can lead to bigger accounts than most people think. Many are married, so she would be picking up the household's assets, not just the individual's. And teachers tend to be frugal, so when they retire, they have a nice sum of money, the millionaire next door. The fact is, once she's allowed to talk to one school system, the next one will let her in and so on. Imagine if she were considered the expert in the education field in the area and she captured just 1 percent of all the money of all the teachers in the counties around her home?

Even if she stays with her original plan to target business owners, it's easier for a person to first work with his or her own natural niche before going beyond. Her focus should be on conducting workshops inside school systems for teachers.

Also, educators are tremendously respected. She can use her base of teachers as a center of influence and leverage that to reach small businesses, rather than trying to target them as a nonbusiness person doing the Rotary Club circuit. She needs to work from her strengths.

I would also recommend she build a vision for the next three years, a roadmap that would include actions for the next 90 days and then the coming week's tasks needed to reach those goals.

And she's got to get her Series 7. She can't deal with business owners without it. Even with teachers, not having one will be a problem. A lot have three or four stock positions and she won't be able to custody them.

Finally, so she can quickly focus on building up her revenue stream, she should find a virtual assistant, someone who can do her scheduling and set up seminar dates, but who won't work on site and will be paid only when he or she's on the clock. The biggest problem advisors have is their time is eaten up by the minutiae of paperwork.

Philip Palaveev

She's already doing well for being just one year in practice. But if her ultimate goal is small business owners, she needs to systematically think about how to acquire knowledge about that market.

There are a lot of books and publications aimed at small business owners. The Small Business Administration is a great source of information, particularly its Women's Business Center. She also needs to attend meetings of women business owners in the area. And she has to resist the temptation to take any client who doesn't fit her target.

Educational seminars are probably a natural platform for her. But she needs to look for real educational opportunities, as opposed to sales seminars selling a specific product or service. She can also write a guidebook for her audience that she could give away for free.

Since the best source of referrals for business owners are usually CPAs, she should focus on finding accountants in her area who may be interested in collaborating with her. But she also needs to keep very careful track of every prospect she meets in a client relationship management system, then go back to her database every so often and contact people again. And she should track where she gets clients from and, every quarter, analyze the results.

One more thing: In any large firm, there are usually advisors with more clients than they can handle. She should locate anyone with appropriate clients whom she could take on.

That said, her natural market is educators. People who change careers to become financial advisors tend to be most successful in their natural markets. I think she should consider changing her focus, or serving two markets.

No matter what, I'd like her to design a specific target for how many clients she wants to have over the next few years, and how much revenue she wants to make. She should shoot for 35 to 40 clients by 2006 and doubling her commissions. It's an ambitious goal. But, in the beginning, you have to grow quickly.

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