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Managing the Business Development Process: A Key to the True Ensemble

According to a recent report by Cerulli Associates, financial advisers today are more likely to join an established RIA than to create their own advisory firm. Another study by InvestmentNews came to the same conclusion. Are these results surprising? Perhaps for some, but the talk regarding the emergence of ensemble firms has been around for more than a decade. Whether due to aging founder advisers who want their firms to continue after they’re gone, or to advisers who want to grow the top line, there is indeed a hiring frenzy by existing firms.

What happens after the frenzy has been satisfied and additional advisers are in place is another story. Unfortunately, “buyer’s remorse” can sometimes set in: Firm leaders who have failed to anticipate and prepare for the changes resulting from having additional advisers in the firm cannot achieve the intended results. So, what can be done to prevent this scenario?

As the leader of your organization, you should, of course, carefully craft the vision and business plan—and then drive that plan into reality. But one key to forming a true ensemble is the need to manage the business development process—sometimes referred to as the sales process.

Manage the Process
As advisers join your firm, they will need leadership and management to help them grow. You may find that it doesn’t cut it to go back to “business as usual” and focus your time as a financial adviser on only serving your clients. Be it loosely or with formality—and whether or not you call it “sales”—the business development process within a firm needs to be managed. To do this, consider the following:

  • Have individual advisers set revenue goals. This will yield the forecast on which future expenditures of the firm can be based. At least some of these expenditures should be for marketing efforts designed to gain new clients.
  • Track all activities. It is all too easy to service existing clients endlessly and never get around to prospecting. Keeping track of advisers’ revenue-generating activity will help provide some needed structure and balance to client-servicing activities.
  • Coordinate marketing events. This will ensure that firm-sponsored events and expenditures are embraced by all advisers within a firm.
  • Recognize success. Advisers need to be recognized for their achievements, as well as coached in areas where improvement is needed.
  • Evaluate techniques. By evaluating the effectiveness of different revenue-generating approaches, future time and energy can go into those prospecting activities with the highest return on investment. This is often referred to as tracking and assessing the effectiveness of endeavors of the sales funnel.

A Word to the Wise
If you love being a financial adviser and working directly with your clients but hate managing others and/or focusing on others’ growth, you might want to “stick to your knitting” and remain in a solo practice. And if you think that growing your business is as simple as finding another adviser to join your firm, think again. All work is a process—including business development.

Remember, you might establish a multi-adviser firm by hiring more advisers. But a key to forming a true ensemble includes actively managing your business development process.

Joni Youngwirth_2014 for webJoni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.

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Embrace ‘Beginner’s Mind’: Don’t Let Your Expertise Hold You Back

During a recent lunch with a well-known venture capital investor, I asked him what is the secret formula behind his spectacular success. His answer was laconic, “Beginner’s mind.”

He explained that in spite of his in-depth venture capital expertise, he still looks at any new investment opportunity with the same child-like curiosity and desire to learn he applied to his very first transaction nearly four decades ago.

His response made me reflect on the countless times in our daily life we miss the opportunity to use this sage approach. Our highly competitive and individualistic culture force us to approach people and situations with an expert’s mind rather than a beginner’s mind. The former, far too often, triggers in us the very familiar “been there, done that” response, which leads us to believe that once we have achieved some level of knowledge about something, there is no longer anything for us to gain.

“Beginner’s mind” is a Zen principle, expounded by Shunryu Suzuki in his classic book on Zen Buddhism titled Zen Mind, Beginner’s Mind. In the book, Suzuki teaches that the beginner’s mind is a mind that is fresh, curious, unbiased, awakened to numerous possibilities and void on any preconceptions. This type of mind profoundly differs from the one that habitually governs our daily activities and customary ways of thinking and responding to people and situations.

Suzuki’s central message is that, “In the beginner’s mind there are many possibilities, but in the expert’s there are few.” Beginner’s mind is about purposefully setting aside our beliefs, conjectures, preferences and existing ideas to create space for new and potentially better ones. When we resolve to learn something we know nothing about, we must begin from the beginning. We don’t know anything about it, ergo our mind is empty and receptive. That’s beginner’s mind.

This should exhort us to never feel as if we have something all figured out when discussing with a client a financial plan or an investment. We must train our mind to be as inquisitive as that of a child, unhindered from bias and unencumbered by our existing knowledge. This will foster in us the desire to listen mindfully to our client or prospect to gain more knowledge and learn about their fears, needs and goals. Ultimately, life never ceases to present us with endless opportunities to learn more.

But, why should we resort to being a beginner when discussing topics or devising strategies that we dealt with innumerable times during our professional life and that have become almost second nature to us?

Having a beginner’s mind approach is of vital importance, because, as we become experts at something, our mind unfailingly leads us to believe that we already know everything there is to know.

Children are a powerful example of beginner’s mind in action. They never cease to surprise us with how fast they learn new things. This is because they embody the view of John Locke—a seventeenth century British philosopher—maintaining that the mind begins as a “tabula rasa”–the Latin expression often translated as blank slate upon which layers of experience accumulate.

Very often in our daily life those layers of knowledge turn into a hindrance to critical investigation and end up curtailing our ability to identify the best option. The beginner’s mind approach is cultivated by being curious, open to hear or observe all that is said or manifests before us without predeterminations. Ultimately, it means tending to a client or a situation wholeheartedly, in the present moment, refraining from rushing to pass judgments or offering solutions until we have absorbed all there is to absorb.

Investing demands beginner’s mind. It is a highly competitive profession. Identifying objective investment strategies to address clients’ increasingly complex needs and situations—amidst fierce competition—is a dynamic process that requires an unusual openness and clarity of mind. Failing to experience greater openness and awareness for new ideas can lead advisers to feel overconfident and prone to implement poor decisions on behalf of their clients.

Claudio PannunzioClaudio O. Pannunzio
President and Founder
i-Impact Group
Greenwich, Conn.

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If the CIA Can Tweet, So Can You: 5 Marketing Lessons from David Meerman Scott


David Meerman Scott takes a selfie with the BE crowd to prove the power of real time connection.

When David Meerman Scott turned 50, he was bigger, he said.

He proved this by showing a roomful of people at the second general session at the FPA Annual Converence—BE Boston a picture of big 50-year-old him, and new fit 54-year-old him.

He changed his mindset, he said. That’s exactly what you have to do with marketing in real time utilizing social media.

1) Provide Great Content. Generate helpful blog posts and Tweet links. You may be concerned about regulations, but Meerman Scott gave the example of the CIA tweeting, so you shouldn’t have any excuse not to, too.

“Yes you have regulations, yes you have to be ethical, but that doesn’t mean you can’t communicate,” Meerman Scott said. One of the methods to communicate is something Meerman Scott calls “newsjacking,” which is the art of injecting your ideas into breaking news.

2) Connect With Your Markets Via Social Media. Align the way you sell with the way people buy. A good example of this is Donald Trump. Meerman Scott emphasized he wasn’t endorsing Trump politically, but said the man is “crushing it” in terms of social media connection.

For example, when Trump’s phone number was published by Gawker, instead of changing his number Trump changed his voicemail message to be a campaign tool, driving callers to his Twitter page and his campaign website.

Trump is leading in the polls, and it’s probably no coincidence that Trump has Tweeted 27,000 times.

Meerman Scott also emphasized following the “Sharing More than Selling Rule,” which is 85 percent of your activity on social media should be sharing and connecting, 10 percent should be original content and 5 percent or less should be promotional stuff.

3) Real Time Is Key. You should be operating in real time. Planners know about real time when it comes to markets and the news, but when it comes to marketing, they tend to look to past information to make plans for the future.

“If you’re spending all of your time in the past and the future, you’re not spending any time in right now,” Meerman Scott said. And that’s a problem because potential clients are looking for right now.

He used the CIA as an example here, too. The agency answers questions and interacts with its followers in real time, often making comical statements like, “No, we don’t know where Tupac is,” referring to the famous 90s rapper whose death involves numerous conspiracy theories that he is alive and well.

“If the CIA can do it, what’s you’re excuse,” for not doing it, Meerman Scott posed.

4) Bring Humanity to the Organization.  Don’t ask your potential clients to first fill out a form before you give them access to your content. Make your content free and encourage followers to share it. Take a lesson from the Grateful Dead, who shared their music for free and were tremendously successful.

Also, don’t describe your firm in technical, hard-to-digest terms. Eliminate stock photos and hire a real photographer to take pictures of you and your firm.

5) Manage Your Fear. The best way to manage your fear is to change your mindset. Think of it in terms of fitness, Meerman Scott said, and be diligent and consistent.

“If you want to get fit and run around a stage like I do,” Meerman Scott said. “You can’t dabble, you have to truly become fit.”

Same thing with marketing and sales, he said.

For more on Meerman Scott, check out this recent Journal of Financial Planning article.

HeadshotAna Trujillo
Associate Editor
Journal of Financial Planning
Denver, Colo.