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Letting Go of Relationships

Compared with professionals in other industries, financial advisers typically enjoy uniquely satisfying relationships with their clients. One reason is that “clients for life” is more than a catchphrase. Given the myriad of critical financial issues, life circumstances, and market volatility that can occur in any 10- or 20-year period, it’s no surprise that deep relationships develop.

But what happens when it’s time to let go of these relationships so a new adviser can take over?

Time for transition
No matter how competent the new adviser, nor how well honed his or her relationship skills, the new adviser is often stepping into a situation where both the original adviser and the client are grieving the loss of the relationship. Two things can happen: in the healthy approach, the client and the original adviser mutually agree to let go of the past and foster the development of the new relationship. In the unhealthy approach, the client and/or the adviser holds on to the existing relationship for dear life, which could undermine or even sabotage the relationship with the new adviser.

For example, it’s not unusual for the original adviser to think that his or her way of doing things is best. Although a new adviser may do some things similarly, the likelihood that his or her way of doing business will be exactly the same is small. That’s true even when the new adviser is the child of the transitioning adviser. If the original adviser feels the need to swoop in and mediate, the relationship between the client and the new adviser certainly won’t get off on the right foot.

So what can advisers transitioning out of the business after decades-long relationships with clients do?

  • Acknowledge that leaving one’s career may create a sense of loss. For some, you may even go through a grieving period similar to when you lose a loved one. In such cases, it may be tempting to keep tabs on client relationships. If keeping tabs is purely personal or “golf-based”—fine. But the original adviser should avoid interfering with the professional relationship between the client and the new financial adviser.
  • Those transitioning out of the business should seek the counsel of those who have experienced the same process. Sometimes the transition out of a long-term career can lead to depression, especially in the last third of life. Another adviser who has already gone through the transition process may provide a good sounding board.
  • Plan for a transition early. Both the original and the new adviser should budget ample time for joint meetings with clients to transfer knowledge and to foster the transfer of the professional advisory relationship.

The bottom line is both advisers must do what’s best for the client—even when it means letting go.

Joni Youngwirth_2014 for web

 

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


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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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8 Ways to Renew Your Focus as the Seasons Change

Like most people, you probably took time to kick back this summer. Perhaps you took an extended vacation, or you took three-day weekends regularly throughout June, July and August. Whatever the case may be, recent market volatility may have kick-started your return to the 40-hour workweek, as you’ve had to respond to client concerns about their portfolios.

To everything there is a season, so they say, and as each season changes, we face new experiences and opportunities, both personally and professionally. In the fall, for example, as students head back to school, there’s a sense of buckling down and getting back to business. And this is just as true for financial advisers.

How can you buckle down and renew your focus?
Buckling down often translates into activities like the following:

  1. Holding more review meetings with clients
  2. Taking extra steps to prospect for new clients
  3. Reviewing internal processes to ensure efficiency
  4. Examining your client base and potentially realigning it with your vision
  5. Rethinking your brand and the extent to which it serves a specific niche
  6. Working with your staff and partners to ensure that everyone is working toward the same firm goals
  7. Assessing the risks the firm faces from clients, employees, technology, business continuity, or natural disaster
  8. Thinking ahead to 2016 and assessing what you need to do to foster the firm’s ongoing growth and quality



For some advisers, the above activities are business as usual. They keep these items top of mind and regularly review them for any signs of trouble or inefficiency. Others advisers think about “CEO-type” issues once in a while—perhaps when they read a blog post like this. Still others think of the above as irrelevant, unnecessary and a pain in the neck. As time goes on and practices turn into more sophisticated businesses, advisers won’t be able to get away with the latter. In fact, the larger the organization, the more critical these activities are.

The approaching fourth quarter is a time for wrapping up 2015 and thinking ahead to 2016 and beyond. Why not seize the autumn momentum and adopt a “back-to-school” mind-set to take a look at your business today in preparation for next year. It will help you appropriately ground the reality of your practice today with your dreams and goals for your business in the future.

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