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How to Grow Your Financial Advisor Business

By October 30, 2020No Comments

John F. Kennedy once said, “Conformity is the jailer of freedom and enemy of growth.” To achieve real growth as a financial advisor, your brand and value proposition must be unique. It’s the only way to separate your firm from an ever-growing list of competitors.

Keeping this concept of individuality in mind, there are stages of growth that are universal to all wealth management firms striving to expand their business. In this article, we’ll outline some of the common struggles with growth and how to overcome them. Here’s how to grow your financial advisor business.

Struggling to grow your practice? Consider working with an experienced financial advisor coach from Northstar Leadership Solutions. Request a free consultation.

Stage #1: The Struggles of Start-Up

Many financial advisors fail before they have a chance to call themselves a real business. This is typically due to poor planning or over-estimating the demand for their specific services. Once their “natural market” dries up, they struggle with prospecting and onboarding new clients.

A unique value proposition should be designed to appeal to a specific niche market, but that market must be broad enough to facilitate substantial growth, particularly when a firm is new. Casting the prospecting net in a shallow pond does not produce this result.

Marketing strategies that are too general are also damaging to start-up advisory firms. A wealth management firm that looks like everyone else has to rely on the name recognition and reputation of the advisor. You don’t have that yet when you first start out.

Stage #2: Hitting the Capacity of Scale

An individual financial advisor can only properly service a certain number of clients. Once you’ve reached capacity, there’s a new growth hurdle to overcome. You could stop prospecting and just run a lifestyle business, or you can choose to make some changes.

Bringing an additional advisor into the fold seems like the most obvious solution, but there are steps you can take before going that route. Begin by evaluating internal processes and technology. Streamlining how you onboard and manage clients could increase capacity.

Modern wealth management firms utilize automated reporting and billing platforms to free advisors from time consuming tasks that don’t bring in new clients. They also delegate onboarding tasks to support staff, keeping advisors available for client communication. You may also consider outsourcing before hiring a full-time staff member.

Stage #3: Matriculation to Business Status

A financial advisor working on their own is managing a practice. Adding support staff and/or additional advisors evolves that practice into a business. This presents additional growth challenges, such as building new infrastructure and establishing a company brand.

This is the stage where all your flaws will be revealed. Solo advisors tend to operate on instinct. Though there may be a marketing plan in place, it’s often modified to suit the needs of the individual. Doing that with partners or employees can cause disruption and stagnate growth.

Instead, create a company handbook. This may not seem like a growth strategy, but a shared document with company policies and procedures will help to get everyone on the same page. It is only when you reach that point that a financial advisor business can begin to grow.

Stage #4: Feeding the Entire Family

Everyone in the firm should be part of the prospecting process. Growth has to be the primary goal. To do this properly, there needs to be a process in place that rewards everyone, not just the owners of the firm. Team members work harder when they have a stake in the results.

Develop a marketing strategy that incorporates both inbound and outbound sales techniques. Inbound traffic can be generated by advertising your brand and generating quality content on your website. Outbound techniques include calling qualified prospects and networking.

Owners and partners in a financial advisor business are entrusted with the financial well-being of their employees. Successful firms are comprised of individuals who all work together towards a common goal, which should be the continued growth of the company.

Stage #5: Transitioning to a True Enterprise

Contact an advisory business with a question about something specific. They’ll refer you to the “right person” to answer it for you. Enterprise firms handle this differently. They transfer you to a department. Your growth challenge when you hit this stage is to create those departments.

That’s a somewhat simple explanation of what it means to go from business to enterprise stage, but it’s accurate. As a small business, it’s okay to put an individual in charge of certain tasks. Enterprise firms need teams, advancement incentives, and succession plans.

What’s Your Next Step?

Which of these stages are you in right now? Are you an advisor running a practice or a small business looking to become an enterprise? If you need help with growth, contact NorthStar Leadership today and to speak with experienced financial advisor coach, Bill Edmonds.

At Northstar Leadership, we will work closely with you to help you refine your vision, define your goals, and build a plan of action for growth.

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