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Give Your Financial Advisory Firm a Strategy Once-Over

Established financial advisors are well-practiced on the value of working “in their business,” plugging away at the daily and weekly activities that are critical to running a successful advisory firm. As business leaders, we also know we have to think about the future. But all that thinking doesn’t necessarily amount to a strategic vision. There’s more to strategy than your next one, 10, even 100 clients. Strategy is about envisioning how the business is going to grow overall, remain sustainable and flourish in the future. It’s about aligning your activities with your intentions and your personal definition of business success.

The constant demands of finding, serving and billing clients often overwhelms the ability to focus on anything else. If you have any time left over, you’re probably spending it on managing your staff. All of that amounts to the familiar “in the business” activities.  Those entrepreneurs who can even carve out the time to work “on their business” often struggle to set priorities, create feasible action plans and sustain the ongoing commitment to these activities.

As a result, for many financial advisor entrepreneurs, developing and executing a viable business strategy is more a wish than a fact. With that wish in mind, Scottrade® Advisor Services, along with practice management solutions provider ActiFi, created a one-day Asset Accumulation Workshop. The workshop was presented in four cities in 2015.

Road Map to a Strategic Growth Plan

About half of the advisors who attended the workshops admitted in pre-conference surveys that they needed help with business development. From the responses of the firms that completed the survey, most of which were SEC Registered Investment Advisory firms, we learned that while many advisors felt in control of the tactical elements of business growth—including networking, client/prospect events and pursuing additional assets from existing clients—the majority had not mastered the strategic elements. For example, more than a third of respondents did not have a clearly defined business development process, and almost 60 percent did not maintain a business development or pipeline report. About half of the respondents did not think they could clearly communicate their value proposition; nor had they aligned their business-development efforts with their vision of an ideal client.

To create a strategic growth plan that can and will work for your firm, it’s essential to begin with these basics. How do YOU define growth?  How much do you want to grow? Do you have the processes in place you need in order to carry out a growth plan, and does everyone at the firm follow them consistently?

Start with a simple diagnostic question: Can your clients and prospects explain what you do? You might want to ask a few of them what they would say to friends who ask about you. Write the answers down and see if they jibe with the value you think you bring to your client relationships. Since most advisors build their businesses through referrals, it’s essential to be able to explain your value clearly—that way, clients can explain your value to their friends, colleagues and acquaintances.

A second important diagnostic: Are you delivering the services your clients want and expect? One way to find out is by surveying your clients. Another is to put together a client advisory board of a handful of representative clients. The board members should be your touchstones: are services being delivered in a manner they appreciate? What, if anything, are you not doing that you should be doing? Board members should match your ideal client profile, be strong referrers, and serve a limited term. The meetings could consist of a quarterly or bi-annual dinner in a private room, with an agenda given out in advance. The important thing is for your board members to feel free to give you honest feedback, and not just tell you how wonderful you are.

Interestingly, none of the advisors who responded to our survey had created a client advisory board. This was surprising as it’s a relatively simple way to enlist the collaboration of your best clients in meeting their needs while helping to build your business and engender a strong sense of loyalty.

Aligning the services you provide with your stated value proposition can be a major step toward strategic growth (as opposed to opportunistic growth). This alignment can empower you to set the direction for your firm, seek out best-fit clients and deliver services they value. And it can significantly raise the day-to-day overall satisfaction levels for you and your firm. Next is creating an ongoing process for soliciting business.

Creating a Process for Growth​

Most advisors engage new clients via referrals, events and occasionally, seminars and social media. Thirty-seven percent of our pre-workshop survey respondents had no process for business development—they worked ad hoc. This is where a road map, along with regular reporting, can be essential. At our workshops, we walked through several spreadsheets that could help the advisors organize their business development process, assign next steps, and foster a sense of accountability among company staff.

Thinking about how you do things—the process of creating process, so to speak—is a fundamental step that underlies a successful strategic overhaul. Where do you want your firm to be in two, five and 10 years? What steps do you take to get there—and what do you need to learn, buy, hire or change to make your vision work? Only by answering these questions honestly, with a real sense of your firm’s vulnerabilities and strengths, will you come up with the most effective course to move forward.

The Scottrade® Advisor Services 2015 RIA Study confirms my observation that advisors’ No. 1 priority has been and will continue to be business growth. One of the most efficient, least disruptive and most satisfying ways to grow is to develop a strategy that brings in the kind of clients that your firm is positioned to serve effectively, the clients you want to serve. Give your firm a strategy once-over if growth is at the top of your priority list, too.


Brian Stimpfl is head of Scottrade® Advisor Services. Scottrade® Advisor Services and ActiFi will be presenting webinars for advisors throughout 2016. 

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