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Laying the Foundation for an Advisor’s Long-Term Business Growth

Now is the time to focus on defining and building your long-term plan.

By Ed Pollis

Over the years, I’ve had the good fortune of working with some of the very best, most skilled financial advisors in the industry. While all of them share the same passion to serve their clients, I often find that two almost identical businesses can differ dramatically when you look at the inner workings of their firms. In my experience, the most successful financial advisors operate like a business that follows a long-term business plan. At some point, they recognized the powerful correlation between executing a defined strategy and achieving success. When done correctly, this is a competitive advantage that can allow you to succeed, regardless of your firm’s size or goals.

As we start the new year, now is the time to focus on defining and building your long-term plan. In the same way you want your clients to have a well-defined plan for success, you should also make sure your business does, too. Here are a few actions you can take to get started if you aren’t sure where to begin.

Define your vision and strategy

First, start by identifying your vision for the long term. This should help set your overall direction and clarify where you are trying to go. It can also help show you where some gaps might be. For example, you ultimately might want to oversee a multi-office firm that delivers holistic financial planning experiences—supporting the needs for insurance, investment advice and annuities. If your firm is currently unable to meet any of these needs, you’ll need to determine the right way to solve for that. Alternatively, you may want to focus on clients with specific needs. That may include women, certain professions or even a focus on families of people with special needs. The message here is to know where you are looking to go and make the necessary changes to get there.

Work from a three-to-five-year business plan

Next, you’ll want to establish your goals and organize them into a formal plan. After all, what good is your vision if it lacks a roadmap to help you get there? Creating a strategy can also help make this manageable and achievable. Remember, the size of your business can determine the complexity of your plan. Let’s say you’re a smaller firm: Your goals might be fairly straightforward, such as growing revenue by 13–15 percent each year through a blend of advisory, insurance and financial planning revenues—all from referred clients. Larger firms may have the same target but need to hire additional support staff such as financial planners, investment professionals or insurance specialists to achieve those marks.

A revenue target for your business could be a great start. Growth should be a focus for any firm looking to succeed, and I would recommend setting a target of 15 percent for the next year to help you get there. From there, continue to work toward this target year after year. While this might seem challenging for some, it can also create a focus on revenue growth for your staff—setting the stage to double your firm’s revenue in the next five years. Think about the impact that could have to help you achieve your vision. 

Align your employees to support your plan

A great business will leverage the skills of each employee. Take a close look at the roles everyone in your firm is playing to best identity opportunities or gaps, and work to fix them from there. While some advisors might find they are not staffed correctly and would benefit from an experienced paraplanner or operations manager, others may find success onboarding someone new in the industry to their firm. Lately, I’ve seen many advisors find success by hiring a recent college graduate with little to no financial services experience and challenging them to fill the firm's voids. This might entail training in certain technologies such as CRM, operational processes and financial planning software.

Gone are the days when the only way to get into the financial services industry was to start as a producer and aim to survive. After taking a close look at your business, ask yourself if you have the right people in the right roles and fill in the holes to best seal any gaps. 

Provide financial planning service

It’s also good to remember how significant financial planning and advisory services can factor into your business growth. This is especially important to keep in mind with the upcoming Department of Labor fiduciary rule environment. According to Voya’s research, advisors who work with their clients to create financial plans improve their overall success, and their revenue can increase an average of 18 percent when completing a minimum of 10 financial plans within a year. Additionally, their businesses tend to progress faster and have the potential for stronger growth than those that don’t. As part of your forward-thinking plan, consider making a commitment to providing this service in 2017—your business and your clients will thank you for it later. 

Create a succession plan

An increasing number of my conversations with advisors involve succession planning, and I find they fall into one of two scenarios. The first is the advisor who intends to be in business for quite some time, say five years or more, and is looking to protect what they have built. The second is the advisor looking to leave in the near future—and, in some cases, not on the financial terms they hoped for. The message I would say to all advisors is this: The sooner you can execute on your plan, the earlier you can start to manage your growth. And, the longer you stay in the game, the better your outcome will be when you decide to leave.

As you look to grow your firm in the year ahead, make it a priority to create a strong foundation. Take the time to put a plan in place to document and capitalize on these opportunities. Remember, the success of your future business is only as good as what it’s built upon.

Ed Pollis is the head of Practice Management and Retirement Readiness for Voya Financial Advisors, Inc.

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