A whitepaper released by SEI shares six tips which can help you strengthen your business and gain a competitive edge over peers. SEI is a US based investment management business outsourcing company which helps financial institutions and financial advisors.
“These actions don’t involve capital expenses, just an open mind and a fresh way of looking at the tremendous opportunities to compete and succeed in today’s rapidly changing business climate,” says the whitepaper.
Here are six tips to grow your business:
Co-plan with your clients
- Don’t try to sell products. Instead, bring out plans that are unique for every client.
- Shift from the traditional ‘Here’s your financial plan’ mindset to ‘Let’s develop your plan together.’
- Acknowledge that investors are more technically and financially astute.
- Expand the conversation beyond finances and investing.
- Coordinate with other experts to provide advice to investors on any topic from accounting and legal services to real estate and healthcare.
Adopt goal-based financial planning
- Use multiple portfolios and multiple strategies addressing the behavioural biases of clients to “bucket” their goals.
- Lead client conversations toward broader life goals rather than limiting discussion to financial goals.
- Embrace the idea that it’s not just about money—it’s about planning around people’s lives.
- Direct conversations away from investment benchmarks and towards the notion of reducing the risk of not achieving goals by showing “progress to goals.”
- Minimize emotional decisions and manage irrational behaviour by focusing on goals.
Hone your value proposition
- Focus on developing niche: For example, specialize in serving entrepreneurs of start-up companies. A start up needs many services and for a busy entrepreneur being able to rely on one source for all these services makes things easy. Moreover, start-ups tend to be a tight-knit community. (Think referrals!)
- Think beyond the four-walls of your office. Use technology to compete virtually/nationally; you are no longer limited by local geographic constraints. When polled, 63% of advisors that responded to SEI Financial Planning survey have clients they never met face to face.
- Focus on specific services that are hard for other advisors to emulate to grow your reach. It sounds easy, but it is difficult. Development of services takes time and money.
Age-diversify your firm
You should begin to seek ways to capture the opportunity that the coming wave of younger investors presents.
- Hire younger advisors/RMs: Investors like to interact with people of their own age. By hiring across multiple age groups, your firm will naturally acquire a client base that mirrors the range of ages of your firm’s advisors. Another benefit is that a young advisor is being paid less, still attaining a good profit margin for a larger book of clients with smaller account sizes. However, if this becomes successful, this can be an effective succession strategy.
- Attract younger clients: A business strategy aimed at attracting a younger clientele is sometimes difficult to justify. However, it is a great way for a young advisor to build a book of business with young clients. As client’s age and their portfolios mature, your firm will have the services to meet their needs. As compared to the older generation, majority of today’s investors are young and do not have unrealistic expectations.
- Serve multiple generations: Implementing an age diversified model will also afford your firm a path to serve multiple generations within a family—a strategy that historically most firms have failed to implement successfully.
Operationalize financial planning
Just as you’ve operationalized other aspects of your business through disciplined processes and workflows to achieve the full benefit of system integration, you need to develop a consistent way to track your clients’ progress relative to their goals and the plans you collaboratively develop.
- Move from asset management to financial planning.
- Implement alert-driven tools and other new technologies from account aggregation to goals- based alerts that notify you when goals are approaching.
- Proactively reach out to clients.
Become a techno advisor
Clients are running ahead of advisors when it comes to technology—if you don’t keep up, you’ll be left behind.
- Focus on the way you use technology to interact with your clients. Let clients decide how they want to interact with you—how, when and where—on Skype, in person or on the phone.
- Review your client portal; ensure that it supports collaboration and is integrated with your financial planning software so clients not only see their accounts, but they can view their plan as well.
- Maximize your current technology, especially your financial planning software. Retrain your staff, upgrade to the latest software version and explore how you can optimize the way technology supports your business.
- Look into technical scheduling methods that enable clients to schedule their meetings with you.
Reproduced substantially based on the white paper ‘Next Wave of Financial Planning’
