There’s an old saying that often makes financial advisors cringe: Bull markets mask problems (issues, troubles, dysfunction, inefficiencies, etc.). Being that we’ve been in a long upward trend in the market (with the exception of recent volatility), a prudent exercise for financial advisors is to step back and take an honest reflection on 2018 year-to-date.
I recognize that for most financial advisors, production and assets are likely to be up, some at record levels. Although this is a good thing and most welcome, it’s important that you don’t get lulled into a false sense of confidence. To help prevent this, I’ve outlined key areas that elite advisors tend to reflect upon. Take note that these areas are, for the most part, independent of the market.
- New “Ideal Profile” Clients: This is a key forward indicator of a financial advisor’s business. It assumes you have an ideal client profiles—the idea is to focus on onboarding high-quality new clients.
What was your target for 2018? How many have you acquired YTD? How will this impact your 2019 game plan?
- New Assets: New assets come from two places, new clients and existing clients. Both are relevant. New clients for reasons mentioned above and existing clients because you want to be the primary advisor.
What was your new asset goal for 2018? How much have you brought in YTD? How will these results factor into your 2019 goals?
- Marketing: What has been working in your 2018 marketing plan? What hasn’t worked? What changes, if any, are you going to make in 2019?
- Top Client Loyalty: Attrition is a normal part of every financial advisor’s business. That said, retention efforts should focus on top clients, such as the top 25 or clients with $1 million plus assets.
Although factors outside of your control can have an impact, most financial advisors want 100 percent retention of top clients. This is loyalty. Granted, on occasion a top client is lost. However, it’s important to approach client loyalty, as if it’s largely within your control.
Have you lost a top client in 2018? If so, why did they leave? What steps can you take in 2019 to improve top client loyalty?
- Team Players: Two of the areas our affluent research continually identified as major impact factors in the financial advisor-client relationship involve team members is (1) personalized service and (2) depth and breadth of knowledge. All team members must be client-centric and knowledgeable workers—these are the “A” players.
So, are all team members performing to expectations? Do they all have clear performance expectations? Are they aware of these expectations? Is everyone developing and growing professionally? Do you have “B” players who need to raise their game?
These are tough questions that should be addressed, as you want to start 2019 with “A” players.
- Wealth Management Services Provided: Our research tells us that affluent clients want a financial advisor who can oversee the multi-dimensional aspects of their family’s financial affairs. Is your team fulfilling this role? If not, what additional services should you begin to provide your top clients next year? How will you make this happen?
- Budget: Have you reviewed all of your expense items for 2018 YTD? Can you identify unnecessary or exorbitant expenses? What expenses can be trimmed or eliminated?
- Social Media: Is your social media following growing? Are you building a community? Are you making progress in positioning yourself as a thought leader? Is your website fully compatible with your social media presence? Has your use of social media brought new prospects to you? What improvements can you make in the coming year?
- Personal: Did you invest in yourself this year? What classes or conferences did you attend? How have you improved as a financial advisor? What personal goals have you set? Are you on target with your personal development? If not, what actions need to be taken in the upcoming year?
The purpose of this reflection is to ensure a strong start to 2019 with a focus on specific areas of improvement. Only one or two areas that surfaced should be addressed at a time. You’ll find other areas begin to naturally improve as a result.
Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. www.oechsli.com
