With 2006 drawing to a close, it’s time to look under the hood of your practice to analyze what you are doing right and what you are doing wrong. The goal is to figure out how to run your firm more efficiently and profitably. And, sometimes, the best remedies are the simplest and most common sense.

Indeed, this is what SEI—an asset-management and investment-processing outsourcing firm—found in a recent informal survey. In a series of meetings around the country with its own client advisors, SEI identified five easy things that advisors say have helped (or hindered) their success.

  1. Quit emailing. Get in your client’s face: 53 percent of advisors surveyed said frequent, face-to-face contact was the No. 1 driver behind their most successful and profitable client relationships. Email may be convenient and quick, and it is certainly handy for some communication, but there is no replacement for pressing the client’s hand, sitting him (or her) down in your office and having a face-to-face talk.

    Michael Anderson, a financial advisor with Evensky Brown & Katz in Coral Gables, Fla., says that some of his busiest clients actually prefer to be emailed, but that there are email security issues when it comes to bigger matters and confidential information. Besides, there has to be a balance. “We will always try to touch base on bigger issues,” says Anderson. He emails clients once every other week or so, at a minimum, and meets with them at least quarterly. But he’ll meet some clients six to seven times a year. “The older the clients get, the more face time they want,” says Phil Cook, an advisor with Cook & Associates in Torrance, Calif.

  2. Give it up! It’s hard for an independently minded entrepreneur—as so many wealth managers and financial advisors are—to give up control of any part of his or her business. But you can’t do it all in house. Some 41 percent of advisors surveyed said that outsourcing asset management and operational processes was the primary reason that their firms had grown in the past five years.

    Anderson says his firm outsources portfolio documentation to a software company. While his firm still does most things in house, Anderson says it is considering outsourcing other tasks, too. “I’m on the newer school side of things, so I’m always looking at new lines of thinking, if they can make things more efficient,” he says. One thing Evensky Brown & Katz is considering, for example, is outsourcing a virtual safe, or document vault, where clients can access key documents online. It would also serve as an important backup in case of emergency.

  3. Do something different. You’ve heard this before: The wealth-management industry is crowded and certain functions of the job have become “commoditized.” Some 49 percent of advisors surveyed by SEI said that “differentiation” is the key to winning new business. SEI suggests holding a formal annual survey in which you ask your clients why they chose you instead of other advisors, then make sure you enhance that part of your business. But, it’s not an easy task, advisors say.

    Evensky Brown & Katz has established a name for itself nationally and has specialized in holistic financial planning and asset management for 22 years. “Now everyone is doing it,” says Anderson, “so we have to further differentiate ourselves.”

  4. Offer the good with the bad. Over 40 percent of advisors surveyed said that unrealistic expectations are the primary cause of bad client relationships. Advisors need to manage clients’ expectations—make sure they are not expecting too much and that they are tied to life goals rather than just investment returns.

    Anderson said he thinks this will become particularly important over the next year or two because the market has had such a nice run and is most likely approaching the end of a business cycle. “That is always the highest challenge,” he says. “Managing expectations in down markets. Hopefully you are adding value in the down market. You have to be constantly educating them.”

  5. Finally, rethink your relationships. New business is essential to growth, but are you targeting your ideal client? Most successful advisors say that knowing where your expertise lies is key to growth. Cook caters to senior executives, small-business owners and retirees. Other research backs this up. Generalists don’t do as well as those who specialize.