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Financial Advisors

9 Essential Financial Advisor Practice Management Tips

By August 12, 2020No Comments

Managing your advisory practice in 2020 is very different from how you may have done it ten or even five years ago. New technology and advanced communication tools have altered the landscape of client services. Market conditions are volatile. Consumer confidence is low. These all need to be taken into account when developing a practice management plan. If you already have a plan in place, don’t completely scrap the old framework. Just be prepared to modify it. In this post, we’ll provide essential financial advisor practice management tips for the “new normal.”

Unsure where to go from here? Consider working with an experienced financial advisor coach from Northstar Leadership Solutions. Request a free consultation.

Upgrade Your Technology

Tech and tools are always evolving. There’s always something newer and better than what you’re currently using. Begin this process by doing a “tech stack inventory.” Evaluate your CRM, reporting system, client portal, and planning tools. Make sure they’re best in class and integrated together. If not, seek out new solutions. Financial technology is rapidly improving and many of the smaller applications have now been bought out by larger firms. A tech review should be an annual occurrence for any practice.

Modernize Your Value Proposition

The way in which you describe your practice needs to resonate with modern prospects. Don’t change your values. Instead, consider updating the language of your value proposition across your marketing materials. The average investor has been through multiple market events in the past decade, including at least two “crashes” and a black swan Covid-19 pandemic. Your value proposition should send a clear message that instills confidence in potential clients. It must resonate, differentiate, and validate.

Remember to Manage Your Business

Great client service is always the primary goal for financial advisor practice management. It won’t do you any good if you forget that you’re running a business. That means keeping an eye on the finances, managing your team, putting together marketing plans, and coming up with new ways to scale your practice. You can hire people to handle some of these tasks for you, but you can’t train them to do things your way if you don’t take a turn at management yourself.

Segment Clients by Niche

Many advisors still segment their clients by assets under management (AUM). Larger clients represent a higher percentage of overall income. This can often make sense from a retention perspective, but it may not be as helpful for scaling purposes. Instead, segmenting clients by niche enables you to identify patterns and create marketing plans to bring in more prospects. Evaluate income by the sum of fees you’re able to earn from the group, not just one individual. Viewing your practice this can help to facilitate faster growth.

Review Communication Preferences

Five years ago, any practice management advice offered in this area focused on finding out how your clients prefer to communicate. Some people want to meet in person. Others prefer email or phone calls. Video conferencing was still viewed with distrust, so it wasn’t a common preference. That has of course changed today. Your approach to communication should too.

Guide clients to the communication solution that works best for you and your team. Most prospecting is done online these days, so emphasize the importance and convenience of online communication, particularly with any new clients you’re onboarding.

Focus on Transparency

This should start with your value proposition and trickle down into every marketing campaign you do. Consumer confidence is low right now, and there’s an underlying distrust in the financial services industry. You can overcome that obstacle by being completely transparent.

Hidden fees and vague explanations won’t work. The average investor today is financially savvy, with access to advanced tools and up-to-date market information. With these resources, many potential prospects feel that they don’t need you. Building a bond of trust is the only thing that will change that.

Delegate Whenever Possible

While wanting to control every aspect of your business is a natural inclination, you don’t have to do everything by yourself. Trying to do too much can result in stagnated growth and unhappy clients. Instead of taking everything on your own shoulders, consider delegating responsibilities whenever possible. That’s what you have a team for. Make a list of all the tasks that only you can do, then pass off the rest. This also helps with employee retention. Involved workers develop a sense of ownership in your firm. That’s good for business.

If you don’t have the resources in your existing team to complete certain tasks, consider outsourcing. This can be especially important for specialized services like marketing and compliance. You can even consider outsourcing financial planning services through a third party to grow your business—but always be sure you trust the work of any third party to uphold your brand’s integrity.

Look for Educational Opportunities

As financial professionals, we’re never done learning. Education shouldn’t be viewed as a burdensome requirement. Each continuing education (CE) course or conference workshop is an opportunity to hone your craft. Don’t avoid them. Look for more chances to attend classes, listen to seasoned financial professionals share their experience and knowledge, research the latest tools and resources. Everything you can learn will make you a better advisor and service provider.

Hire a Business Marketing Coach

Ask for help. Every financial advisor can benefit from hiring a business marketing coach. If you’re unsure how to grow your business from here, an outside perspective may be just what you need to get you out of a rut.

Bill Edmonds at NorthStar Leadership has been helping firms like yours for over two decades. Schedule a free consultation call today if you want some assistance in creating a modern financial advisor practice management plan.

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