What Do You Want To Be In 2012? A Business Or A Practice? How To Create A Successful And Enduring Investment Advisory Business

Friday, January 06, 2012 13:34
What Do You Want To Be In 2012? A Business Or A Practice? How To Create A Successful And Enduring Investment Advisory Business

Tags: business planning | CRM | managing | profitability | RIAs | strategic planning | valuation

You can’t build an investment advisory business unless you define your firm’s processes and embed them in CRM software shared by a team. So the first thing you need to do right now is to decide whether you want to be a practice or a business in 2012?

To be clear, when I say a “business,” that’s something bigger than just you.
A business can sustain itself without you.
If your firm cannot be profitable without you, it’s a practice but not a real business.

This Website Is For Financial Professionals Only

A practice is great, by the way. Nothing wrong with not creating a business.
Creating a business can be much more rewarding financially in the long run, however.
Many great professional practitioners have created great wealth management businesses. Names like Bill Carter, Harold Evensky, Joel Isaacson, and Andy Putterman. The list could go on and on. These are all professional wealth managers who were able to create enduring businesses.
Some advisors delude themselves into thinking they’re creating a business when, in fact, they are only running a practice.
One of the key steps in moving from a practice to a business is embedding your processes in a CRM.
If you hope to ever become a business, you must realize that the skills needed to succeed are totally different from being a practitioner. Being a professional advisor is not enough.
To transform a professional practice to a successful professional services business, you must be a good manager, marketer, technologist, and salesperson. That takes years.
One of the key crossing points in moving toward an enduring business is embedding your processes in your CRM.
Without doing that, you won’t ever be able to create a competitive business. Pretty much all of the top wealth management firms with $250 million or more AUM have figured that out, and you can be sure that they already have written processes and embedded them in their CRMs, or are in the process of getting this done.  
Point is, if you are serious about creating a real business, then make 2012 the year that you start documenting your processes and embedding them in software systems your firm uses.
To help you do this, here’s a deal: I will create a database of advisor processes and make them available for free.
If you send me a process for client intake, prospecting, referrals, cash management or other workflows essential to running an advisory practice, I’ll send you a different process for free.
If I get enough processes, I’ll publish the database and make it free for all A4A members.
Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .


Comments (4)

We have a system or process for everything we do in this office, from the most complicated (how to rebalance a client's portfolio) to the most mundane (mailing birthday cards to clients). In Junxure, our CRM, every activity is scheduled as an Action Item, or AI. No one does one thing, on any day, unless it is an AI in Junxure. All of our systems are Recurring AIs (some quarterly, some annually, and some more freqently). Read a book a number of years ago where the author was trying to make the same point. He asked, "Do you want to be a 'time-teller', or a 'clock-maker'"
timknotts , January 06, 2012
Would this make a great webinar? Thanks.
Papillion , January 08, 2012
Andy, Processing your business is only one step in making a business. A step that's at least as important is moving your clients perception of your firm (business or company) to one where they do business with your company, and not an individual.

Unless your firm has reached a size where you have a team approach to servicing your customers, you still have a practice, although a well organized one.

When it comes time to sell your business the only amount that counts is what you get upfront in cash. If you're selling your business for 35% down and holding 65% in paper, you've only sold your business for 35% of what you think you got for it.

I've written extensively on this topic on this website as well as in my own blog at www.stage2planning.com/blog. I invite those who are interested in wandering over and taking a look around at both our blog and resource center. Our resource center has several reports on how to create a business that has enterprise value.
Joshco0752 , January 14, 2012

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