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Strategic Planning for 2023: Think ‘What’ Not ‘Why’

The conversation shouldn’t be about “How are we going to get more?” it needs to be, “What do we want more of?”

The calendar has officially rolled into the fourth quarter of 2022, which means many RIAs will be conducting strategic planning sessions in the coming weeks and months as they look forward to 2023. 

One seemingly simple component of this strategic planning that is often overlooked is defining the “What?”   What type of business are you building?  What types of clients are you hoping to attract?  What particular service offering are you building that is specific to the client niche you are serving?  We’ve all read the articles and watched the TED Talks extolling the virtue of knowing your “Why” and clearly defining that which motivates you to run the business you do.  If I ask an advisor, “Why do you enjoy working with clients?” or “Why did you want to be a business owner?” most will excitedly respond with a well-rehearsed speech of how they bound out of bed, ready to tackle the challenges of the day and how they feel fulfilled in their life’s calling.  But if I ask, “What are your goals for next year?” they stare at me blankly and simply say, “More.”

They want more clients, more AUM, more advisors and more employees— but there’s little focus on what type of clients, what specific roles and responsibilities they’re hiring for, what particular talents or client focus they want from the advisors coming on board. As leadership teams pile into office conference rooms or gather in hotel conference centers for their end-of-year offsites, I encourage everyone to kick off the sessions by scribbling on the white board, “What Are We Building?” In my experience, every participant in the room will describe a very different company with a very different focus.  The conversation can’t just be about, “How are we going to get more?” it needs to be, “What do we want more of?”

Understand the types of clients your firm is best suited to serve.  Ask yourself, what type of clients do you enjoy working with the most and go find more of those next year.  Ask what characteristics your best employees possess and use that list to hire new employees next year, so you aren’t stuck continually replacing employees that don’t fit your culture.  Determine a specific revenue or AUM goal for the end of 2023 and work backwards to determine what initiatives need to be undertaken early in the year to ensure you reach your goals by December.  Blindly going after “more” will not get you there— use your strategic sessions this quarter to get everyone laser focused on the end goal, so they know exactly what to strive for in 2023.  In the great words of Yogi Berra, “If you don’t know where you are going, you’ll end up someplace else!” 

Speaking recently at the DeVoe & Company M&A+ Succession Summit, Mark Tibergien stated that successful RIAs are not defined simply by size, but by those “companies that are dominant by a certain demographic, by a certain type of client, perhaps even by a certain geography.”  These firms have defined their “What.”  Mr. Tibergien continued by saying, “it’s important for RIAs with plans for sustained growth to set themselves apart in their chosen market with the goal of becoming one of the top three recognizable brands in that market, however, they define it.”  He stated, “the opportunity to achieve market dominance is great, but you have to be clear as to what market you're talking about.”

When looking at the M&A strategies pursued by many RIAs, there is little to their strategy beyond, “More, more, more.”  Few firms think beyond the size of the assets under management of their acquisition targets. They forget to focus on the types of clients served by the seller or if the service offering of the seller fits into the broader vision of their firm.  And unfortunately, most RIAs pursuing organic growth haven’t defined their “What,” either.  “In 2023, do we want more retirees? More business owners? More divorcees?” “Should we put our marketing dollars toward advertising our concentrated stock diversification strategies, or should we focus on the new international ETF we’ve been building?” With a strategic session this quarter focused on “What,” leadership teams should get aligned and be prepared to tackle Q1 2023 with a narrow focus on specifically what market they are attempting to be a leader in.


Matt Sonnen is founder and CEO of PFI Advisors, as well as the creator of the digital consulting platform, The COO Society, which educates RIA owners and operations professionals how to build more impactful and profitable enterprises. He is also the host of the popular COO Roundtable podcast.  Follow him on Twitter at @mattsonnen_pfi

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