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Ten Things to Do Before the Year Is Over

Focusing on clients and growth is the natural instinct of our industry. Still, before we turn the page to a new year, we all have to make sure that we have brought to conclusion all the open items from this one.

Focusing on clients and growth is the natural instinct of our industry. Still, before we turn the page to a new year, we all have to make sure that we have brought to conclusion all the open items from this one. Think of it as making sure that you turn off the lights and lock the doors because you go on vacation.

The following list includes necessary but often overlooked management topics that advisors should look into before popping the champagne and focusing on the resolutions for 2011:

1. Completing a performance evaluation of all employees. This is the single most important and most frequently ignored end-of-year item. Employees need your feedback; they cannot improved their performance if you don’t tell them what they have done well and what they are struggling with. Formalizing your feedback will give it more weight and gravity and more clarity. You may think that a casual conversation is enough but my experience has been the opposite. More importantly, the formal performance review will open the door for an important conversation about their commitment to your firm, their career goals and expectations and, of course, your expectations of them. It will create a better, clearer and more constructive dialogue than the occasional comment or quick conversation.

2. Making bonus decisions for 2010 and considering any changes in the bonus structure. Bonuses should not be “guaranteed” or perceived as such. Your bonus decisions should not be automatic. Typical mistakes include: a) paying all employees the same bonus (did they perform at the same level?); b) paying more than last year (are you more profitable? Did employees perform better?); c) not explaining why you are paying a bonus and how you determined the amount—this is what leads to the assumption that next year is going to be the same as last year.

3. Comparing employees’ 2010 financial performance to their budget and analyzing the differences. A well-run firm cannot function without a full P&L budget, even if it is a quick and simple one. A simple template is available in the “Resources” section of my company’s website, Creating a budget without updating it and comparing to actual numbers it useless; you have to look into what was different from expectations and why. This will help you create a better budget for 2011.

4. Cleaning out any contracts and expenses that are not needed. My mentor Mark Tibergien used to call these “creepers, because they creep out at night and conspire against you.” Every firm has them, subscriptions you don’t use, resources you don’t use, perks that are not valued, discretionary marketing that is not producing results. The extent of this waste is always surprising and can often free up financial resources for a much needed new hire.

5. Cleaning out all the leads in the CRM. First of all, I am assuming you have a CRM. If you do not, then this should be an immediate priority. You need to have a system that documents all leads and the necessary follow up and status. Take a look at that list: Is there someone who went to the back burner that you can bring back? Are there leads that may benefit from another contact? Was something assigned to a person in the firm who forgot about it? Should you declare some of the leads a “no go” and remove them from the list? You know how sometimes, when you take a pair a pants out of the closet, a few coins fall on the floor, sometimes even a $20? There might be an opportunity in the list of old leads.

6. Preparing an analysis of new leads, their sources and the result. Advisors tend to believe that they know where their prospects are coming from but they can rarely create a specific analysis of the actual results in a year. The results may be surprising; you may find that CPA firms you consider referral sources have not given you anything for years and that clients that you do not rank as “A-clients” are generating a lot of referrals. This analysis will show you where to focus your attention in 2011 for the highest return.

7. Calling clients whom you have not had conversations with in the last 6 months. My partner Stuart Silverman constantly tries to think of clients he has not spoken to lately and keeps a list of such names in his back pocket. This ensures that no one “falls through the cracks” and that there are no clients who feel ignored. No client ever complained about an unexpected call and many will be delighted.

8. Take a hard look at your website. The way people communicate and absorb information is changing rapidly and your external communications should evolve accordingly. You don’t necessarily have to post updates on Facebook or Twitter about lesser known aspects of distribution planning, but at least you should make sure that your pages are fresh, informative and do not look like you created them as a high-school project for Netscape 2.0.

9. Book a day to plan for 2011. Advisors often fail to share their vision and their plans with their staff. We just get carried away and forget to tell our fellow explorers where we are taking them. Sharing your plans is often not enough to excite people about being part of your vision—giving them a chance to participate in the formulation of that plan is the element that ensures their involvement and enthusiasm.

10. Talk to your spouse and friends about your business (if you aren’t already!). Often the best observations and ideas about your business will come from the people who know you the best, even if they don’t know the business all that well.

Building a business is a process of constant triangulation between dreams and reality – future plans and current circumstances. The future always provides the excitement and anticipation – the past often serves to provide the frustration and the annoyance. Before we turn the page on another year, though, we can always take simple steps to ensure that we won’t be again where we were.

The author is the president of Fusion Advisor Network, a consultancy to help FAs manage and grow their businesses.

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