Goal Setting…It’s What It’s ALL About…

As many of you know and as I mentioned in some posts a few weeks ago, it is once again time for yearly strategic planning.  Where and on what will you focus your energy for the next 12 months?

The first part of this process is goal setting…personal and professional.  Personal goals can include goals for your family, your health, your personal finances…anything that goes toward the quality of life you are trying to build on the personal side.

Your business goals include anything involved with your business…revenues, new clients, number of meetings per week, technology & service model improvements, etc.

In their book, The One Thing…You Need To Do by “D” Shannon and David Drucker (click here for the amazon.com link – http://www.amazon.com/One-Thing-You-Need-Do/dp/0976497409/ref=sr_1_2?ie=UTF8&s=books&qid=1255388671&sr=1-2) Paul & Leslie Strebel (certified as “E-Myth Consultants”) discuss the 10 most important principles in goal setting.  Here they are:

1.  Your most important goals MUST be yours;

2.  Your goals must be meaningful;

3.  Your goals must be specific and measurable;

4.  Your goals must be flexible;

5.  Your goals must be challenging & exciting;

6.  Your goals must be in alignment with your values

7.  Your goals must be well-balanced;

8.  Your goals must be realistic;

9.  Your goals must include contribution;

10.  Your goals need to be supported.

I think these are excellent guidelines articulated in a well-thought out, meaningful manner.

Not having goals (which usually involve change or evolution) is simply doing the same thing over and over again and expecting different results.  Know what word is that the definition for? Insanity.  Think about it!

As a reminder, I have several worksheets on my website (www.backofficeadvisor.com) for getting you started in strategic planning.  These are available for free download.

Good luck and take care, Ginny

If you say you’re going to do it, then “DO IT”

Risk questionnaires, IPS’, Client contracts…all necessary in a well run RIA.  However, beware…all of these documents “can and will be used against you in a court of law”.

I recently attended the NAPFA pre-conference compliance day which was excellent.  One of the most important takeaways for me was “if you say you’re going to do it, then you MUST do it and DOCUMENT IT CAREFULLY!  It’s not enough to have a conversation with a client, it must be documented.  Best method?  In my opinion, it’s an email follow up.  Emails are archived and will show proof of your conversation.

Tom Giachetti & Bob Veres played out a wonderful and highly enlightening “mock trial” of an advisor who, despite his best efforts to do what is best for his clients, finds himself being sued by a client who claims various omissions by the advisor.  Of course, the advisor cannot document any of these conversations because after all, there is a trust there right?  Your clients would never turn on you because they trust you.

Advisors are sweethearts…everyone knows this. You truly have your client’s best interest at heart and because of this, you sometimes forego the actions that you know are necessary to protect you and your business because after all, you have this great relationship with your clients right?  What could go wrong?

Plenty…as the old adage goes…”you never really know someone until you divorce them”.  The same is true here…you  never know a client until a lawyer gets a hold of them.  In these tumultuous markets, the scene is set for trouble!

Document everything!  When you have meetings with clients, send them a recap of the decisions/discussions by email.  Set your CRM to get a receipt of delivery if it’s available.  Review your client contracts…are you fulfilling your duties.  Review client IPS’ and questionnaires.  If you asked a client “what is the largest lose in their portfolio they could be comfortable with” and they’re below that, meet with them ASAP.  If your client contract calls for certain services to be delivered and they’re not, either get a new contract signed or get the services delivered.

I know your heart is in the right place but unfortunately, I doubt if I’ll be on the jury.

Take care and call or email me with any questions or comments.

Be a Renewable Resource

I’m sure you’ve seen all the articles recently talking about how this market may be the best time ever seen in history for financial advisors to acquire new clients, especially if you are an independent.  Clients are questioning their advisors even when they come with big, fancy, old school names behind them. The tried and true has been tested and in many cases, has failed.  This has brought about a whole new fear for investors.  The “guaranteed” is no longer…

But there is another group that needs your help.  Your strategic alliances.  The CPA’s, attorneys and insurance folks who work with your clients alongside you.  They are experiencing the same fears as your clients AND in many cases, they are being asked for their opinions on what is going on.  Frequently, they don’t have any more answers than their clients.

You can help them.  Make is a policy in your office to take four or five pieces of information every two weeks or so and distill it down to five or six bullet points for for them to use with their clients. Give them the answers in a short and concise manner so they can answer some of those questions.  Also use this email blast as a way to educate them about your business and things are you doing to help your clients.

I believe if you do this, when they have a client ask for a recommendation on a financial advisor, they will think of you.  You have demonstrated the ability to simplify their lives and after all, isn’t that the Holy Grail we are all so desperately seeking?

Let me know how it works!  Take care, Ginny

You Never Get a Second Chance to Make a First Impression…

So many times, I see advisors work so hard to get a get referral.  They get one and low and behold, the referral becomes a client.  So what happens now?

The advisor is now on to the next conquest because that’s what we’ve told you.  Don’t break stride, keep your momentum going.  But the problem here is that you have this brand new client, a bird in the hand so to speak and you are not spending anytime on the front end with them, welcoming them, walking them through the transfer process, writing them a  handwritten thank you note and including a small gift as a thank you.

No where in your relationships with your clients do you have a better opportunity to establish how the relationship will progress than in those first few months.  Make sure you have a process for someone in your office to follow.  I would suggest it include the following items:

1.  Write a handwritten thank you note thanking them for becoming a client (should come from you) and include a small gift as a token of your appreciation.

2.  BEFORE the transfer process begins, send them a letter letting them know how it work.  For example, remind folks who have checks on their investment accounts to stop writing checks and give them an idea of when their money will become available again and when they’ll receive checks from the new custodian.  Let them know if there are any complicated NON-ACAT items that will come slowly.  Reassure them that you are watching this everyday and will notify them immediately if there are any issues.

3. Have someone from your office contact them at LEAST once a week to engage them in conversation and ask them if they have any questions.

I recommend 10 touches in the first 90 days with 6 of those being in the first 60 days. 

What’s going to happen here?  First and foremost, you have a happy and well-served client.  Secondly, when you ask for referrals from them, they are going to be so ecstatic with your service, they will be chomping at the bit to tell their friends.  Thirdly, they are now conditioned to refer folks to you.

Give it a try and see what happens.  You will be establishing a firm foundation for your client relationships!

“They like me, they really like me’ but do I like them?

As we approach the end of the year and you and your staff are doing strategic planning for 2009, don’t forget to examine your client base closely.

I would suggest you sit down with your client base in front of you, grouped by families with the amount of fees they have paid you in the last 12 months and their current AUM (if applicable).  Ask yourself these questions:

1.  Do they really value my services?  Do they take my advice or do they want to argue everything?

2.  Are they fee sensitive?

3.  Do they treat my staff with respect?

4.  Are they nice folks?

5.  Would I want to duplicate them?

Rate them as an A, B or C (or A, AA & AAA if you’d prefer).  A clients are clients you would replicate in a minute.  They get it, they take your advice, they get you documents quickly, they’re invested in the process, they are not fee sensitive and they are genuinely nice people.  B clients may not meet your minimum but they are good savers, they have a plan, they take your advice and they’re nice folks. You may not want to duplicate them today but you will someday. C clients, well, no explanation necessary here.  They argue everything, they gripe about fees, they never send documents (or they have to be hounded), they’re rude or just generally unenthusiastic about life.

Use the A group to focus your marketing efforts for 2009.  Keep the B’s happy but with a little less personal attention perhaps (for instance, with your A clients you want to set up the appt. with their CPA and go with them.  With the B’s, you want to remind them to do this but let the responsibility rest with them).  The C’s, well you know where I’m going with this. 

For every new A client, sever your relationship with an equivalent amount of AUM or revenue from your C clients.  Do this until you have the client base you want.

You will be happy you did.  There are few things about your business that go more directly to your quality of life.

Call me if I can help.

Excuses, excuses and one or two good rationalizations

All of us at one time or another have used dumb, illogical excuses and a juicy rationalization to avoid doing something we know we need to do.  How many of you have said “I’ll go on a diet next week” and have not only not started the diet but end up weighing more next week?

I’m sure you’ve done this in your business as well.  This is really just an excuse not to make a commitment.  If you want to grow your business, you must make a commitment to ask for referrals.  No amount of excuses and rationalization is going to make referrals magically appear.  You’ve got to get out in the community, write white papers, establish yourself as an expert, build a simple and usable web site that is client-centered, not advisor-centered.  If you’re a sole practitioner, you’ve got to commit to finding good outsource partners and load off as much as you can to them.  If you’re building your firm with staff,  you’ve got to make the commitment to hire the best staff, train them thoroughly, build a culture of creativity and trust and then let them run.

How many of you have a formal strategic plan?  Before you answer yes, does it include your personal goals as well as business goals?  Do you refer to it each time you make a decision that effects your business to make sure it is in alignment with your plan and the quality of life you are trying to build?

Now for those of you that said no, don’t kid yourself or try to rationalize it away.  You are flying blind and eventually, you will run into a wall (if you haven’t already) with no plan on how to get around it.  Make a commitment to get your plan in place no matter how busy you are now.  Stop and chart the path you will take to your dream firm and map out your vision for your quality of life so that each time you make an important decision, you can benchmark it to your plan and vision to make sure it keeps you on track.  If it doesn’t, either defer for now or drop it all together.

Please call me if I can help you chart your vision for your firm and for the quality of life you deserve!

Thanks!

Why Are You Doing All of This, Part 2

In an April 2008 blog, I talked a little about remembering why you’re doing all of this (“this” being working your backside off to build your firm).  In that blog, I talked about the importance of working with the right clients, the ones that fit your vision for the firm and that you will want to work with for years and years.

Today I’d like talk about what I call “statistical pornography” and how this can cause you to forget why you’re doing this.

Many of you talk to your clients about avoiding “financial pornography”, you know, those “end of the world” predictions that cause your clients to consider shunning their long term investing view?  Well, advisors are subject to what I call statistical pornography and one of the worst statistics are the numbers that talk about what other advisors are doing each year as far as growth. 

Frankly, this to me is only important if you are building your firm to compete with the size of other advisors (I know, I know, you say, these numbers help you understand what is possible but again, I say, who cares?).  Your reasons for building your advisory firm are personal and are yours alone.  What possible difference could it make what others are doing as long as you are happy with the firm you are building.

As you read this, do me a favor.  Write down the reasons you started this business and look at them closely.  Do they have anything to do with being the biggest?  Do they have anything to do with serving huge amounts of clients?  If they do, then I would say you are doing it for the wrong reason and you will never get fulfillment from what you are doing.

My guess is they have to do with family and quality of life.  If you are making a decent living and growing your firm in a managed, defined manner, you will be successful.  Stay on that path, don’t forget why you’re doing it and be proud of what you’ve done.  Let the others take care of themselves.

Thanks for reading and as always, I appreciate your thoughts.

The “Millenials” are coming. Are you ready?

How many of you saw the piece on 60 Minutes last night about the millenials? http://www.cbsnews.com/stories/2007/11/08/60minutes/main3475200.shtml? 

There was a wonderful story on this generation of workers coming on board our companies right now.  They are known as the Millenials and they were born between 1980 and 1995.   They have parents who doted on them and they received trophies for just showing up.  That’s the bad news.  The good news is they are smart, tech saavy and have priorities that include family and friends.  They are hardworking and persistent and have the tools to get the job done.  And once they find their “perfect job”, they will be loyal to you.

However, your business-as-usual attitudes about employees are going to land you in trouble with this generation.  They’re not going to put up with it.  They want coaching and mentoring, not bossing.  They want and expect flexibility to pursue their priorities and other interests and the old starched white shirt, time card attitude is not going to cut it.

So, you say, they can either work my way or it’s the highway right?  Not so fast.  The boomers are quickly approaching 60 and succession strategies are more important than ever.  You are going to have to adapt to this new generation if you’re going to stay competitive and fresh.

But it’s okay…as I stated before, they’re hardworking and loyal.  Just check your time card attitude at the door, give them some freedom and let them run.

It’s envitable…don’t fight, just get on board and hang on for the ride.

Take care and have a great week, Ginny

Get your employees vested in your success!

I recently returned from the NAPFA National conference in Long Beach, CA.  What a great success!

One of my favorite speakers (I’ve always been a big fan of her work) is Rebecca Pomering of Moss Adams.  Among other things, Rebecca is energetic and very bright.  She always provides me with great insight and reminders as to why doing things a certain way is right.

Rebecca talked about several ways to compensate and incentivize your folks and the fact that there is no “one right way”.  However, she also stated when asked does she believe there should always be incentive pay, she said “yes”.  She feels very strongly about it.

She went on to make several good observations about how to set up your incentive plan (what are you tyring to accomplish as a business, what kind of client service experience are you trying to deliver, what kind of culture are you trying to build, etc.?). She also stated in her presentation that ALL staff should participate (although at varying levels) in the incentive plan, not just producers.

Again, Rebecca gave a great presentation and further cemented what I strongly believe.  But I think there is one point about all of this that I feel most strongly about…when you set up an incentive plan based on employee performance and the performance of the firm, you are “vesting” your employees in their jobs.  As a matter of fact, at that point, I think they no longer see it as a “job” but as a quest, a vision, almost a challenge.  They are motivated to see the firm succeed and I believe you’ll see an improvement in work habits, motivation and culture almost instantly.  My client’s that have put incentive plans in place tell me almost immediately that they see differences in the way their employees behave.

As always, I appreciate any thoughts you have.  Thanks for your time.

 

 

Who do you want to work with?

How many of you have taken the time to think about who you really want to work with?  You’re saying “who I want to work with?  That’s a stupid question!  I want to work with folks who have money to invest right?”  Not necessarily!

Okay, I know, if you’re early on in building your practice, you may say “for Pete’s sake, I don’t have this luxury!”.  I have to make a living don’t I?  And I say, “of course” but that doesn’t mean you have to sacrifice the quality of life you are trying to build.  Study after study has shown that if you target your marketing efforts, you will get much better results.  Figuring out who you want to work with goes hand in hand with this. 

Sit down and think about who these folks are.  Are they younger or older, are they pre-retirees or retirees, do they have a minimum amount of investable assets?  Do they delegate well to professional advisors, do they value the services of professional advisors?

Now, the answer to many of these questions may seem obvious and some probably are but put together your “Ideal Client Profile” and then once you’ve done it and blessed it, print it out for everyone to see.  Post it in your office, in the restroom, in your car, everywhere you turn so that you and your team are constantly reminded of why you’re doing all of this.  When taking on new clients, DO NOT sway from this.  If you do, you will regret it eventually (sometimes sooner rather than later).  Do what you ask your clients to do…take the long term view here!

Remember, if you do this right, it’s not just about earning a living, it’s about a quality of life so you can truly enjoy what you do.  After all, when you are doing something you enjoy, you will naturally do it well!

Please contact me with any questions.  Thanks & Happy Cinco de Mayo!