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Future Minded Advisors Must Consider New Processes to Remain Competitive

With revenue being squeezed by compliance and technology, financial advisors are trying to find ways to increase their revenue and continue to give value-added service to their best clients. When revenue flatlines or starts to shrink, so does the spending on technology and processes. This is a short-term recipe for disaster and frustration, and leaves advisors with tough decisions for their future: sell out if they can, merge with another practice if possible, or invest into systems and processes that can build scale and service their high net worth clients.

New compliance processes

How many times have you had to update your processes with new regulatory changes in the past couple of years? With new regulations being written on a regular basis, come new processes and systems. With new regulations comes training and all of this takes time, which most advisors don’t have these days. Time to implement processes and systems to handle the new regulations and processes. You can either plan the time to tackle these challenges, join forces with someone who has the processes in place or hire a consulting firm to help guide you in implementing new processes. Or do nothing, and see what happens. It’s your choice.

Comprehensive wealth management

Challenging as the environment may be, running a comprehensive and integrated wealth management and financial planning firm, is the future of the financial services industry. Financial firms who invest in the technology and have processes in place are finding it easier and easier to compete and grow their practices. They are the ones who have all seven areas of a client’s financial life in mind. The seven areas I categorize are tax, estate, investment, risk management, insurance, debt and cash flow. While they may not give direct advice or planning in all areas, it is coordinated or integrated planning and advice.

Related: How to Offer More to Your Ideal Clients

Comprehensive practice management

The same as running a comprehensive wealth management firm, their processes are organized into six areas.

How many financial advisors you know have their complete financial planning practice in order in all six areas-

  • Ideal client acquisition process - increasing your value, pricing or fees?
  • Client experience process - delivering a list of comprehensive value-added services to their best or high net worth clients.?
  • Ideal metrics and KPI’s - Increasing practice revenue with fewer clients than the average advisor?
  • Human capital processes - How many advisors have these in writing?
  • Ideal capacity - segmentation clients annually and time management systems?
  • Ideal Lifestyle - How many advisors are taking 8 weeks off a year?
  • Consider doing a process audit for your best clients to determine gaps and opportunities to serve your best clients.

  • Do advisors have their own plan in order?
  • What is the probability of success in reaching your business goals currently?
  • Is it 50% 75% OR 90%+?
  • We know that 72% of financial advisors have a business plan in their head. And 25% of them have a business plan and earn 41% more than advisors who do not have a business plan. But the highest probability of success comes from having a fully documented business plan, reviewed every 90 days and progress tracked to plan, earn 246% more than an advisor who does NOT have a clear plan for their future.

    Comprehensive and quality Business planning process

  • Average advisor 72% NO ($181,435)
  • Yes- partial plan sometimes tracked 25% +41%
  • Yes- fully documented in all areas and tracked 3% +246% ($1,300,000)
  • Related: How to Spend More Time With Ideal Clients and Prospects

    Consumer behavior change

    Fee compression and higher costs are forcing advisors to examine their business models, and target more high net worth clients, and move to fee-based accounts. They are also adding value added services such as financial planning, fee audits, and advice-based services such as beneficiary audits for insurance planning. The future, however, is becoming clearer for the consumer, that basic advice will not have the same cost in the future, and revenues for advisors already are being forced downward. With revenues decreasing and demands growing from consumers, advisors will have to offer more value and more comprehensive services. This takes time, and processes in place, two critical items some financial advisors don’t have.

    When are you going to find the time to put in more comprehensive services and processes to deliver? When I started my coaching firm to help advisors build these processes, I planned to be busy, but advisors need help, and I am past capacity in my consulting practice. I urge advisors to find a coach or consultant who can help you implement these processes into your practice, and find the time to do so. This may be the key to the independent advisors future, instead of merging or selling (if possible). I call it project 100. Plan 2-4 hours per week to implement the key processes, technology, and systems into your practice. Only then can you deliver more value to your best clients and prospects. Start by booking the time in your calendar this week.

    Source: Business Health Key value Drivers USA 2016 www.businesshealth.com.au