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The Three 'Ps' for a Successful Enterprise Practice

The Three 'Ps' for a Successful Enterprise Practice

While the financial industry is more complex and diverse than ever before, today’s independent financial advisory practice comes in two flavors: enterprise and lifestyle. A business that continues to thrive beyond the proprietor’s own working years is an enterprise practice, while one that revolves around the needs and preferences of a solo practitioner is a lifestyle practice.

Enterprise practice owners aim to develop a sustainable, transferable business with long-term goals in mind. Whether that ultimate objective is to sell the practice, reach a certain level of revenue, or leave a legacy in the form of a successful firm, these business owners need to make sure their firms are Productive, Proficient, and Profitable in order to build a business that will endure the test of time.  Do you have the three Ps?



A productive enterprise practice runs smoothly and efficiently. The key to productivity is process.  It’s often helpful for individual business owners to think of themselves as a franchise – a business that could be replicated in new markets by franchisees. Practices that run based on a “franchise model” are ultimately more transferable – and more profitable – than those that do not.

Advisors looking to build a strong, sustainable firm need to focus on establishing a scalable, consistent process that can be understood and carried out by everyone in the practice. And better yet, they need to document it in detail. As a practice owner, if your process for running the business only exists in your own head or is ad hoc in nature, it makes the transfer of knowledge very difficult. Documenting procedures makes it possible for new employees to learn the business – which is a critical step in growing the practice.  With procedures, employees can perform their roles consistently and effectively, and procedures make it much easier to get new team members up to speed quickly.

Finally, investing in high quality technology to support day-to-day activities is critical to maintaining productivity in today’s financial environment.  For example, many advisors invest in a CRM system to build process-driven workflows to deliver a consistent client experience.  Additionally, advisors can invest in technology that enables seamless integration across performance reporting, CRM and financial planning technologies.



Proficient practice owners know who their ideal client is and build their practices around individuals who fit that profile. A critical element of establishing a proficient practice is regularly soliciting client feedback to inform efforts to improve the business. You can collect feedback in three ways:


  • Ask clients directly – while a quick “how are we doing?” during a meeting or phone check-in can be a great way to get anecdotal perspectives, it’s also important to gather measurable collective feedback from a larger sample of clients as described below.
  • Conduct a structured client survey – a survey will yield both qualitative and quantitative data. Surveys allow advisors to set goals and track their progress, as well as benchmark against other firms. Distribute surveys to all clients annually or biannually in order to compare results on a consistent basis.
  • Establish a client advisory board – An advisory board is a focus group comprised of the practice’s top clients. A client advisory board can shed light on what works and doesn’t, gauge interest in potential new initiatives, and evaluate the effectiveness of branding and marketing efforts.


In addition to identifying areas where you can improve, soliciting client feedback can uncover new business opportunities and increase loyalty and client engagement. According to AssetMark’s 2014 Rules of Engagement Study, only 25 percent of clients are Engaged, down 2.7 percent from 2013.  Thirty-six percent of clients are identified as Content, 18 percent as Disgruntled, and 21 percent as Complacent. Engaged clients are more loyal, less fee sensitive and provide referrals. They also have a higher level of trust in their advisors and the industry than less engaged clients. Keeping channels of communication open between advisor and client is an important component of fostering client engagement and maintaining a proficient practice.



A successful enterprise advisory practice must, most importantly, be profitable. Effective financial management takes into account:

  • Revenue:  amount of money is coming into the practice
  • Direct Expenses: salaries for owner(s) and key employees
  • Indirect Expenses: all other overhead, including nonprofessional staff, rent, utilities, marketing, etc.
  • Profitability: remaining revenue after expenses are paid


A 40/40/20 financial model can then be a simple and effective managing framework. According to this model:

  • 40 percent of overall revenue should go towards direct expenses
  • 40 percent should go towards indirect expenses
  • The remaining 20 percent should be profitability


What a business owner does with the money in the profitability category depends on his or her goals for the businesses. In a practice anticipating growth, earmarking dollars to make a new hire might make sense; for a business looking to expand its client base in a new area or demographic, an investment in marketing and branding resources will help achieve that goal.

Every financial advisory practice is unique, and there is no “one size fits all” management style that guarantees a successful business. The three Ps – productivity, proficiency and profitability – simply offer guidelines for business owners whose goal is to develop a sustainable enterprise practice.



Matt Matrisian is Senior Vice President and Director of Practice Management at AssetMark, Inc. 

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