Happy Holidays, now get focused!
As 2011 draws to a close and we attempt to take a collective breath and get some much needed rest, I encourage you to start thinking about 2012. This seems like a bit of a paradox, but there are some critical activities to accomplish before the year is out. For many advisors, December 31st ends the push to close out the calendar year production and it starts over again on January 1st.
The following are three activities financial advisors should do before the end of the year to start off 2012 on strong footing:
- Get clear on the state of your business and what you have accomplished. To help advisors with this, we created the Advisor Health Index– a quick and simple tool that shows advisors where they are compared with the strongest firms in the industry. Benchmarking is important − you can’t get to where you need to be without knowing exactly where you are today. Most of the advisors I work with are highly competitive and want to continue to improve. The Health Index provides a baseline score for the health of your business. This can be an eye-opening exercise and will point to the five critical metrics that provide maximum insight into your business.
- Identify where you want to be. The end of the year is the perfect time for you (and your team) to sit down and think about business goals for the next year. Advisors typically measure their success by revenues, AUM, and number of clients. It is our conviction that two of those (AUM and number of clients) are actually faulty indicators for success and may drive counterproductive decision making. Consider setting targets in line with the ratios in the Advisor Health Index. In addition, you should consider developing a well-rounded vision for your practice (which includes your purpose, values, goals and description of success).
- Map out the right path to get there. Once advisors figure out where they want to be, it can be challenging to decide on the right strategy to implement. Our work with advisors for over a decade has identified three primary strategies to construct and grow a more profitable and scalable business.
a. Create additional capacity in your book by considering disengaging unprofitable clients.
b. Drive efficiency and/or incremental revenue via outsourcing the investment implementation and transitioning to an advisory model (recurring revenue).
c. Dramatically improve the service and experience you deliver to your high-revenue clients. Our experience suggests that this strategy will yield greater results than outward-facing marketing activities.
Commit to it
I often use industry weight-loss programs to drive home an important point regarding strategy and execution. Most people believe that a fraction (between 0-5%) of weight-loss programs are truly effective. I would argue the success rate is 95% or higher when people stick with a program. The lack of results is not a programmatic problem, but rather an execution problem.
At Russell, we are committed to helping you achieve your full potential. This can’t happen without focusing time and attention on your business.
Consider taking a proactive step and prepare for 2012 as outlined above. My guess is you will enjoy the holidays that much more knowing you are ready to hit the ground running!