Published on February 25, 2011 – FUNDfire – An Information Service of Money-Media, a Financial Times Company- written by Andrew Klausner, Founder and Principal of AK Advisory Partners LLC.
When we analyze advisors, we usually focus on traits that successful advisors share. But are there traits that are shared by underperforming advisors as well? The answer is yes. If you’re mismanaging your practice, the odds are that you’re deficient in at least one of four closely linked areas. Taking corrective action in your weak area can help position you for future success. Here are the top traits that we see among underachieving advisors:
Lack of business plans: Whether you’re a single practitioner or part of a team, planning is an important component to your business success. The key is to match your resources with your growth expectations. The metrics used are typically desired assets under management and revenue. Where do you want your business to be in one year, or in three years? When combined with your desired minimum account size, you can determine the number of clients that you business should have. Armed with the information, you can analyze if your resources – both human and financial – are a match for your goals. Once resources and goals are in sync, you can begin to address the question of how you get there. Make sure that everyone in your organization understands the goals and how success will be measured.
Lack of a distinct value proposition: Why is someone going to do business with you? What value do you add that they can not get somewhere else? What is unique about you or your services? These are the types of questions successful advisors ask themselves. You notice that I didn’t mention the word “product.” That’s because the product is the commodity; the advisor is the differentiating point. Creating a unique value proposition is part of the process of developing your brand identity. A good brand is one in which every time a client sees something from you, they know it’s from you, and they are reminded of the unique value that you add.
Poor Client Service: Multiple surveys find that client service – even more than investment performance – will dictate whether clients stay with you or not. Part of the planning process for all successful advisors is devising a client service strategy that accomplishes two primary goals: provide the client a unique, enjoyable and profitable experience, and offer the service in an efficient manner. Good client service begins by asking clients what they want and how they want their services delivered (for example, in-person, telephone, e-mail). Challenge your staff to create your own unique client experience and make it part of your brand.
Being reactive instead of proactive: Finally, it’s the old saying that if the client has to ask, it’s too late. Successful advisors anticipate client questions and concerns, especially during volatile times. Call clients before they call you and make them feel like true partners in the relationship. Conduct client surveys as a good way to get feedback. Embrace social media to the extent allowed by your firm so that you can push out ideas to your clients on an on-going basis.
