By: Penny Phillips, President, Partner, Journey Strategic Wealth
How many times have we heard that advisors aren’t growing?
Year in and year out we hear the stats about the lack of organic growth in the industry. We’re told that most advisors aren’t bringing on new clients with any kind of velocity or consistency; instead, they’re growing AUM by virtue of rising markets, or leveraging M&A strategies to drive inorganic growth.
While the numbers certainly don’t lie when you’re looking at the industry as a whole, my perspective is skewed. I spend almost all of my time with advisors who, like me, are students of the industry with a deep passion for practice management.
These advisors are committed to working on themselves and are obsessed with getting better for the sake of their clients. They are ever-evolving as practitioners, with total conviction over their value propositions. It’s no surprise then that these advisors are in fact growing. And by a lot.
Unlike the rest of the industry, they are wildly successful at sustainable organic growth, acquiring new clients year over year without sacrificing experience or retention.
The Four Key Organic Growth Characteristics
So what makes these advisors different then the rest? I’ve worked with thousands of advisors, and I’ve found that there are five key characteristics that separate those who are organically growing from those who aren’t.
1. They spend the majority of their time on business development
I know this one seems obvious. But there is something unique here about how they manage to find time to do this that is worth noting.
These advisors don’t typically find themselves “stuck” in non-revenue-producing roles for an extended period of time. The minute they start to feel like their capacity is filling up or they’re spending too much time on operational tasks, they make a change.
They hire talent, even if it means reducing their cash flow. They delegate and outsource, even if they know that the work won’t get done “as good as they would do it.” They adjust their business model – leave their back office, merge with another firm, raise capital – no matter how painful or daunting the notion of “change” seems at the time.
The fastest-growing advisors are not dealing with custodians or compliance, processing paperwork, managing payroll, fixing the tech, negotiating with vendors, inputting data. The list goes on and on.
My point is: if you follow the pattern of business decisions made by the leaders of growing practices, you’ll find that those leaders are comfortable making (temporarily) uncomfortable or hard decisions.
I’ve witnessed this firsthand at Journey. Advisors typically join us after realizing they are at a critical crossroads and need to make a change so that they can have the role, practice, life and future they want.
So, how do you become someone who is comfortable being uncomfortable?
The first step is being honest with yourself about what you really want, and who you want to be in the business.
These are the two most important questions you could ever ask yourself as the leader of the practice. You cannot simultaneously grow the practice, run the practice, manage the team and operations, and serve as an advisor to all your clients. Realistically, you could probably do one and a half of those well.
And if growing the brand and bringing in new relationships is your strong suit, then all of your efforts (and business decisions) need to be shifted towards giving you more space and time to do that.
On the flip side, if you hate the idea of being responsible for revenue growth, then you’ll either need to fill that gap by hiring someone to lead your growth efforts, or by joining forces with others who can alleviate the pressure.
Either way, having conviction in what you want, and what you are willing to do and/or give up, is key to establishing your business development strategy.
2. Business development isn’t a job, it is the fabric of their persona
If you talk to advisors who are consistently growing, they don’t think about business development as “sales.” They’re never afraid that they’re appearing salesy. They don’t shy away from making a call to action. They follow up with prospects and check in with COIs. They talk about the business and ask for the business, unafraid and unashamed.
Why?
Because they believe so deeply in their own value proposition that they feel it is their duty and obligation, as a steward of this profession, to tell more people about what they do.
I call this the “relentless prospector” mindset.
Think of it this way. Instead of dreading following up with a prospect, imagine feeling “excited” at the opportunity to change someone’s life. That is what the relentless prospector feels. With this mindset comes an ease in which one can weave their value proposition into conversations. Relentless prospectors wear their brand like a badge of honor, and get great joy out of spreading the word about all the great work they are doing.
If you’re reading this thinking, “This is so not me,” I have two pieces of advice. The first is to self-reflect. Every successful person suffers from imposter syndrome at some point. But for the best in the business, the desire to be great, to help more people, to build the practice, supersede those moments in time. If imposter syndrome or a lack of conviction are holding you back, it’s important to explore where there is misalignment.
I have seen SO many advisors subconsciously hold themselves back because they no longer felt aligned with the firm they were at, or because they felt they were in the wrong partnership. Focus on making the necessary adjustments, and the mindset will follow.
Second, spend as much time as you can during the work week engaging in activities that increase dopamine. (There is a reason why I don’t believe advisors should spend any time on the phone with the custodial service center, or fixing a broken tech aggregation.) Call your favorite COI. Talk to your best clients. Talk to clients and business partners who you know will validate you and reinforce your value proposition. Connect with people who you have helped and share that positive feedback and praise with your team. Use the momentum to build your confidence… and then immediately call or email the prospect or COI you’ve been procrastinating.
3. They deliver an exceptional client experience
You’d be hard-pressed to find a growing practice that was just … mediocre. Top teams are exceptional at delivering client service and consistently delighting clients.
Typically these teams are extraordinarily consistent across each department and role in the practice. Everyone in the practice speaks the same language. They describe the value proposition the same way and can easily articulate what makes them special. More importantly, everyone in the practice recognizes that their best use of time is to either create the capacity for business developers to bring in new clients, OR focus on delivering exceptional service that turns new clients into raving fans.
The specifics of “exceptional client service” can vary from client base to client base, but the best advisors in the business all get these aspects right:
- They are proactive. They’re scheduling reviews before clients have to ask to meet. They’re uploading quarterly performance reports automatically to their client vaults. They’re reaching out to “nervous nelly” clients when markets are skittish.
- They deliver across the value chain. They are not just managing an investment portfolio. They are helping clients answer questions about insurance, mortgages, tax savings, budgeting, goals, health insurance, etc.
- They know their stuff and have built a network of professionals around them who also know their stuff. They care deeply about their profession and continue to educate themselves about the topics that are relevant to clients so that clients don’t have to wait days or weeks for an answer to a question.
- There is cohesion among all the staff. The client can expect a similar (great) experience no matter who they are dealing with at the firm – fast response times, clear pre- and post-meeting communications, and proactive ongoing updates around their financial plan and progress.
- Their value proposition manifests in their engagement with clients. This is arguably the most important point. The best in the business recognize that what they say has to align with what they do. Here is a great example:
- A firm that touts its “deep care and intent listening” as one of its core value proposition tenets would ensure that they’re practicing active listening in every meeting, engaging in ongoing E.Q. training and development, and providing a communication assessment to all new clients.
If you cannot very quickly and clearly articulate what your team does to deliver exceptional client service (or differentiated service), spend time working on this. From enhancing firm retention to driving referrals to evangelizing your brand and its reputation, your existing clients are central to sustainable organic growth. Treat them that way.
4. The brand – and marketing – transcends beyond the individual rainmaker
I’ve spent a lot of time talking about the solopreneur advisor-rainmakers who sit at the center of the fastest-growing practices in the industry. While it’s true that these firms typically have at least one PERSON driving the brand forward in the marketplace, it’s also true that the brand transcends beyond that one person.
This may seem like another obvious point, but it is impossible to grow a brand without making a long-term investment in marketing.
I talk to so many advisors who have little patience as it relates to marketing initiatives, especially those related to social media. They’ll post a few ghost-written posts on LinkedIn, or make some adjustments to their website and immediately get frustrated. “Why isn’t my SEO better?” “Why don’t I have more “likes” on my comments? “Why aren’t any leads coming in through my site?” These advisors typically are trying to do it themselves or have an administrative assistant moonlighting as their marketing person.
As sales and relationship people, we are driven by instant gratification. The idea of waiting years to build a following seems… unnatural. And for many advisors, it literally is unnatural to go on social media and post personal updates about their lives and practices.
(For the record, I totally understand the frustration with how long it takes to see results and how much of a waste it can feel like to spend $10, $20, $30k on marketing only to realize that all your new clients are still coming from your personal relationships and referrals.)
The key for the best in the business, though, is that they understand that an investment in marketing is simply a necessity for the business. And that results need to be measured over the course of months and years, not days. Here is what I’ve seen these folks do well as it related to marketing:
- Find a marketing firm that will actually execute on their behalf. While it’s important to talk strategy, it’s also important to have professionals “doing the things” that advisors are not trained to do, nor should be spending their time doing (editing videos, writing blogs, creating graphics, etc.)
- Identify their “marketing edge” by correctly aligning what they want to produce with what their ideal consumer is looking for. If your clients are retired, LinkedIn isn’t where you should be posting (although you may find COIs there). If your clients are Gen X female divorcees, posting generic financial planning tips probably won’t catch their attention. But creating customized, highly specific content – the top three financial moves to make immediately after a divorce, for example – will.
- They create authentic content in different formats, consistently and relentlessly. It almost feels as if they are “following” the prospect along their life’s journey, day in and day out providing helpful tips and valuable information.
- They steer clear of the red shiny objects. No need to make a TikTok account or pay for a radio ad if your ideal clients are not consuming content on either of those media.
- They aren’t afraid to spend the money or the time. Statistics tell us firms spend anywhere from 2-10% of revenue on marketing. As far as time, my rule of thumb is six months. Give an idea or new strategy a solid six months to see if you can get into a rhythm.
- They have realistic expectations with regard to both budget and timing. The more you’re willing to spend on marketing, the more opportunities you’ll have to get in front of your ideal clients, which translates to more qualified at-bats for an average lower cost. And while marketing can definitely produce short-term wins, it is by nature a long game. Implementing an SEO strategy, for example, might not yield measurable results for up to a year. It is also far more expensive than advisors realize.
Think of marketing, good marketing, like your always-on brand evangelist. Once you get the engine running repeatably and sustainably, it’s going to keep working to drive growth for your firm.
The Road to Organic Growth Starts Here
So where do you start?
I’d start with reflecting on what you’re prepared to do – or not do – in order to grow practice. Allow your vision, even if it’s a short-term vision, to guide you on your next steps.
Next, I’d construct a game plan for creating enough capacity in the practice for you to be able to forge ahead.
I have worked with thousands of advisors as an independent industry coach and now, in my role as Journey’s President and co-founder, I can say I’ve personally witnessed our advisors grow at above-average rates year after year. I am always willing to lend an ear to advisors looking to achieve the next level of success. Feel free to send me a message or get in touch with our team here.
BIO: Penny Phillips has spent most of her career coaching and consulting financial advisors and institutions. She is the co-founder and President of Journey Strategic Wealth, a Registered Investment Adviser built for advisors seeking independence and hands-on practice management support. Prior to founding Journey, Penny founded Thrivos Consulting, a practice management coaching company. She has worked in various leadership positions across the financial services industry and has authored multiple practice management training programs focused on helping financial advisors prepare for the next generation of wealth holder.
