The authors Peter Vessenes and Katherine Vessenes, partners in marriage and business, provide consulting services to advisors and financial services companies in USA. Katherine Vessenes is a CFP and had a successful practice. In fact, their website (Vestment Advisors) claims that she brought on over 100 clients and generated an income of $ 750,000 in 18 months, all this in a new location and too despite working part-time only!
In their book ‘Building Your Multi-Million Dollar Practice’, the authors have put down their 40 years of combined experience of helping advisors. The book has eight chapters which serve as a step-by-step guide for advisors to achieve their full potential.
The authors list eight vital prosperity factors for advisors. The authors discuss each factor in great detail based on their experiences while consulting large financial advisory firms.
1) Star based business: The authors advise that having a star based business is not good for a practice in the long run. As happens in India too, the owners of the business are often the face of the company. They meet clients and bring business. All other work like planning, choosing investment products, after sales service is delegated to junior planners. The authors say that there are three main drawbacks of this system:
- They may not be able to scale up business
- Advisors may not be able to create a succession plan
- It would not help increase the valuation of business
Unless advisors have a successor within their family to take over the reins, selling their business to an outsider would not be easy. This is because they may not be able to pass on their loyalty to other advisors. Clients develop an attachment with an advisor, which cannot be transferred.
To overcome this problem, the authors say that advisors should show to clients that their support team demonstrate a diversity of skills and abilities and they look after their best interests. To cut a long story short, advisors should make their clients comfortable with their team.
2) Strategic planning: The authors point out that many advisory firms do not have a written business plan. A written business plan should include the steps of reaching the company’s mission and vision. According to them, having yearly targets is not a way of strategic planning and it’s merely an incremental growth. They stress that such an approach leads to short term thinking and thus advisors lose focus from their dreams and vision. They say that advisors need to dig deeper in their lives to discover what they wish to accomplish. They list seven disciplines (revenue, growth, profitability, technology, quality systems, strategic marketing and corporate culture) which advisors should adopt to realize their dreams.
3) Fiscal and asset management: The authors observe that while financial advisors are good at managing their client’s finances, they don’t monitor their company’s finances well. For instance, they say that advisors should put themselves on monthly salary.
4) Marketing: This is a comprehensive chapter which explains in detail about the ways to market yourself. This includes seminars, referrals, newsletters, radio shows, niche marketing, branding and so on.
5) Operations: In this chapter, the authors say that advisors’ most important commodity is ‘time’ and they should have a solid support staff and system. This will free them up and they can spend more time in meeting clients and getting new business.
6) Excellent employees: This chapter gives detailed tips on personnel management – from how to hire the right employees to how to delegate, motivate and train them.
7) Defined sales system: The book says that advisors should not hard sell. The authors say that having a defined sales process leads to effortless sale. They list a six-step process which can help advisors convert clients without being too pushy. Here are the six steps:
- Differentiate yourself from competitors
- Build trust in the first meeting
- Pass on the information to a team of experts/junior planners
- In this second meeting, present the written plan to client
- Have follow up meetings
- Retention program : Send personally hand written thank-you notes after every meeting
8) Ethics and compliance systems: In this chapter, the authors show how advisors can avoid getting caught on the wrong side of the law by having proper processes and systems.
Apart from the eight step process, the authors have provided sample formats on how to write follow up letter, agenda letter for second meeting, engagement letter, product recommendation letter, client satisfaction survey, etc. which advisors will find handy.
While the book claims that it is also useful for startup advisors, we found the book more apt for owners of established advisory practices. Nevertheless, the book is rich in details and provides practical tips based on their client case studies. Established financial advisors who have a certain size and scale would find this book very useful.