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Kiss Practice Management Goodbye

MINNEAPOLIS — “Just my personal feeling, but I think we’re overloaded on practice management,” sighed John with a grimace, then added, “I feel we’re spending more time on policies and procedures than on finding new clients.”

Kudos to John. At least he was aware of his team’s dilemma. After a brief discussion it was readily apparent his five-person team was very professional and had a lot going on. However, they weren’t growing. I then posed the question, “How do you feel about leading a team that hasn’t been in growth mode?”

John’s response had an edge to it: “Like an idiot! I’m done with ‘practice.’ We’re going to stop practicing and start running a business. So I’m going to ‘kiss practice management goodbye.’ From now on, we’re focusing on growth.”

Granted, this is a bit of a play on words. Obviously John had to pay attention to the practice management aspect of the business. It’s imperative that his team operates efficiently: clear roles and areas of responsibilities, clients segmented, service models in place, consistent client experience and comprehensive wealth management. All of this should be a given. But a business that isn’t in some form of a growth mode is slowly dying from the inside out. 

I’ve encountered many advisors who have fallen into this trap: too many policies and procedures directed at too many smaller clients, at the expense of relationship management (servicing and schmoozing affluent clients) and relationship marketing (penetrating affluent clients’ spheres of influence). Alas, practice management has become an obstacle for growth.   

When I asked John how many affluent clients ($1 million or greater) his team had in the pipeline, his body language spoke volumes. He simply dropped his head. Translation, they had no active pipeline. In his words, John said, “We’re masters at being efficient in a holding pattern.” 

There is a common sense approach to running your business efficiently while maintaining a steady level of growth. But it requires honest self-assessment. Your best results will come by tackling, as a team, the questions I posed to John:

  1. How much revenue is generated by your top 25 clients?
  2. How much revenue is generated by non-top 25 clients?
  3. How much of your team’s time is currently devoted to your top 25 clients (phone conversations, review prep, in-office visits and socializing)?
  4. How many affluent clients have you acquired this past year from your top 25 clients’ spheres of influence?
  5. How much time are you devoting to your professional alliances? 
  6. How many affluent clients have you received from your professional alliances this past year?
  7. How much of your team’s time is engaged in non-top 25 client activities?
  8. Which of your team’s non-top 25 activities can be delegated, minimized or eliminated?

After discussing these questions, each team member, including you, needs to outline their current daily activities. Once everyone’s daily routine has been outlined, the team should meet and collectively identify and reach agreement on what is considered non-essential, redundant or time-wasting policies and procedures. Emphasis should be on carving out time for relationship management/relationship marketing relative to the top 25.

None of the above is easy. This requires introspection, teamwork and change. Yet, John’s recent progress report is what prompted this topic: “Thanks, we followed your advice, kissed practice management goodbye, have just onboarded a new $1.7 million client, and now have approximately $8 million in the pipeline.”

There you have it. Run your business like a business.

Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent

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