What is the biggest identifiable problem producers ask about when they walk through your door?
Saenz: How do I get control? I speak in front of a lot of top producers at a lot of firms, and its astounding how many producers out there feel the same way. Theyre frustrated with the lack of balance in their lives. These are big producers who manage a lot of money. Many of them dont even have to work anymore, but they want to. Yet overwhelmingly, they want to spend more time with their kids and their families. They have worked the 12-hour days. Now they want time for themselves. Arent most of them fee-based?
Saenz: Yes, definitely. I target the fee-based consultant. And lets face it, those are the guys with the most assets at the big firms.
So whats the problem?
Saenz: These guys are still managing their businesses as if they were transaction-based, and theyre not. The No. 1 problem is that they usually dont have enough people. Staff?
Saenz: Yes, they dont have enough people to get the job done. They are using the old transaction system to build a fee business. It doesnt work.
The first problem I see is the lack of structure. I know a lot of consultants doing between $1 million and $2 million in fee-based business who are one or two people short. They still have the mentality of, The firm should pay for it. They dont want to pay for it, so they dont have a good group.
In addition, they dont quantify their workflow. They dont know what is going on in the administrative side of the business. They underestimate the amount of time it takes to get things done. So, what do they do? They throw technology at problems. But they are not solving the cause--they are treating the symptom. If you dont have structure, technology wont do you any good.
What kind of structure are you talking about?
Saenz: There are five pieces. Imagine it looks like a pyramid. The bottom, or the first piece, is structure. Then there are systems, technology, people and image. These are the building blocks of what I call a world-class business.
Where can advisers go wrong with the structure?
Saenz: If you have a fee-based practice, the relationship is more profitable in the later years than earlier because you are spending less time and earning more dollars. But I bet if you look at most consultants business model, its flipped. They are concentrated on bringing in business. Isnt that the culture though?
Saenz: Exactly. When I was a broker at Merrill Lynch in 1984, the mandate in the industry was gather assets, gather assets, gather assets. Everybody jumped on that. But what it should be is relationship management instead of asset gathering. If you cant keep a client in a fee-based relationship, you are missing all of the upside. And brokers are missing something there?
Saenz: Most focus on, say, their top 50 clients, and everyone else is neglected. They should have a full-time person doing asset gathering while they focus on relationship management. The problem is that the size of the team doesnt keep up and the servicing suffers. So once the structure is in place, what then?
Saenz: Then you have systems to create efficiency and consistency. Then technology can come into play to facilitate all that, such as sales automation and contact-management programs. Next, addressing the people issue takes the most time. An adviser needs to work with the right people who are doing the right things. Then there is image.
Saenz: Image is how clients get treated whenever they call in or come in. Are they getting the wow experience? Its attraction. Instead of imposing your story on someone, it should be, How can I attract people that I want to do business with? Its the Ritz Carlton experience. If you can create that for clients, you wont even have to ask for referrals.
How do you go about diagnosing a brokers business problems?
Saenz: I give them an assessment form that forces them to look at their business. This creates awareness. And once we know the source of the pain, we isolate the pain. Then, we put together an action plan to prioritize the areas in need. Then, we get into coaching. If I were just to tell them whats wrong with their business, theyd walk away and nothing would ever change. I keep them honest. Implementation is the key. What specifically does a broker need to do?
Saenz: We have them break down the business functionally and build it back up again. We identify all the tasks in 10 areas: administration, marketing, sales, etc. Then we blow it up and explain what has to be done in every area. Its an exercise that quantifies the workload. They stop reacting and become proactive. Next, we put a plan in place to help them figure a way out of the hole. Once they can at least see that there is a way out, the rest is easy.