Twelve Steps to Make Your Business Fun Again

Thursday, February 14th, 2013

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consultants

The past ten years have been labeled “The Lost Decade for North Amer­i­can Secu­ri­ties”.  Investors have lost con­fi­dence in finan­cial mar­kets and hope that their finan­cial goals may some­day be realized.

Finan­cial advi­sors, I have spo­ken with recently, talk about how the indus­try isn’t fun any more.  They tell sto­ries about how they cringe when the phone rings and call dis­play sends them a mes­sage that a cer­tain client is call­ing.  Clients are get­ting totally dis­il­lu­sioned by volatil­ity and poor ten-year per­for­mance numbers.

On top of this, com­pli­ance makes it almost impos­si­ble to do busi­ness.  I can sit in front of my iMac, do some research and pound out an arti­cle like this, reread it a few times, log into my blog’s back­end, paste the arti­cle, reread it a cou­ple more times and hit post and the arti­cle is there for the world to see.  Then my friend, Pierre Daille at Advi­sor Ana­lyst, picks it up, posts it on his web­site and sends out a mes­sage to 28,000 advi­sors to read.  Jealous?

In 1989, I became dis­il­lu­sioned with my role as an advi­sor and made a deci­sion to pur­sue man­age­ment.  I had a book of $120 mil­lion, great rev­enue, a great team and was well respected within my firm (I think) but I wasn’t par­tic­u­larly happy.  I was turn­ing 40 and sim­ply couldn’t see myself doing this work for another 20 or 25 years.

The stock mar­ket crash in 1987 had taken its toll on client con­fi­dence and even though my clients did well that year, pri­mar­ily because I was fixed income focused rather than equi­ties focused, it was really dif­fi­cult to mobi­lize them on opportunities.

I can hon­estly say I have been in your shoes.  1987 was quick and over com­pared to what you are expe­ri­enc­ing but the hang­over is the same.  Based on my per­sonal expe­ri­ence, here are my top 12 rec­om­men­da­tions to make your busi­ness fun again:

1. You have the best job in the world.  You make more money than most peo­ple you know and have all the free­dom in the world.  You can take hol­i­days or days off when­ever you want and attend lit­tle Johnny’s or Mary’s games or dance recitals and you don’t need to spend one to six months per year on a plane or in a hotel room.
2. Don’t get caught up in the num­bers.  Your num­ber one goal should be hap­pi­ness, not assets under man­age­ment or rev­enue.  If man­age­ment is putting pres­sure on you to increase rev­enue, find a firm that under­stands that today’s busi­ness is about gath­er­ing assets, sat­is­fy­ing clients and charg­ing fees based on the value you pro­vide and that rev­enue is sim­ply a bi-product of doing good work.
3. Focus on build­ing equity.  Every new client, every new dol­lar of AUM and every new COI rela­tion­ship you develop con­tributes to build­ing equity in your firm.  In many cases, your busi­ness is the most valu­able asset on your per­sonal bal­ance sheet.
4. Dis­en­gage from toxic clients.  Most busi­nesses have them.  They are the ones that you try to avoid at all costs.  I will bet that if you did a dif­fer­ent kind of seg­men­ta­tion:  where you rank clients into four cat­e­gories – Awe­some peo­ple to work with, Good peo­ple to work with, OK peo­ple to work with and Hor­ri­ble peo­ple to work with, you can eas­ily iden­tify the ones from whom you should dis­en­gage.  My rule of thumb is that 3 – 5% of clients cause 95% of grief.  The most suc­cess­ful advi­sors only work with peo­ple they like.  It is much less expen­sive to break free from a high value toxic client than split with your spouse and give up 50% of your net worth because you are miserable.
5. Deal with bad invest­ments and deci­sions.  I remem­ber read­ing an arti­cle back in the ‘80s on when to sell an invest­ment.  Ask your­self the ques­tion “Would I buy this invest­ment today?”  If the answer is No, you should sell.  Mis­takes that are not prop­erly dealt with reduce con­fi­dence for you and your clients.  Seg­ment your invest­ments into two cat­e­gories – 1. Would buy today and 2. Would not buy today/should I sell.
6. In his book, The Hap­pi­ness Advan­tage, Shawn Achor writes:  “Neu­ro­sci­en­tists have found that finan­cial losses are actu­ally processed in the same areas of the brain that respond to mor­tal dan­ger.  In other words, we react to with­er­ing prof­its and a sink­ing retire­ment account the same way our ances­tors did to a saber-tooth tiger.”  Clients need time to deal with their 2008 expe­ri­ences.  They need to work through their five stages of loss – Denial, Anger, Bar­gain­ing, Depres­sion and Accep­tance.
7. Start hav­ing “let’s start over” client meet­ings.  Some­times, it is a good strat­egy to sim­ply start over.  After a ter­ri­ble loss Vince Lom­bardi started a prac­tice by say­ing “Gen­tle­men, this is a foot­ball.”  In today’s volatile world, things change very quickly.  Think about hav­ing a start-over meet­ing every three years, start­ing with a new dis­cov­ery meet­ing. Explain to your clients that dur­ing tur­bu­lent times, it makes sense to reassess their sit­u­a­tion, their goals and their plans and look for the best solu­tion, based on cur­rent information.
8. Lay the facts on the table.  If you put clients into invest­ments in the late ‘90s that were based on buy and hold, which was the proper strat­egy for the sec­u­lar bull mar­ket from 1982 – 2000 but not a very prof­itable strat­egy for the past 11 years, dis­cuss sec­u­lar bull vs. sec­u­lar bear mar­kets and volatil­ity, rel­a­tive return strate­gies vs. absolute return strate­gies, etc.
9. Do your home­work.  You should spend at least one day per quar­ter exclu­sively ana­lyz­ing port­fo­lios, invest­ments, invest­ment man­agers, mar­ket per­for­mance and out­look and post your find­ings for clients.  Sec­u­lar bull mar­kets make advi­sors lazy and this may have come back to bite you.  Don’t put too much faith in sin­gle sources for information.
10. Exer­cise and eat prop­erly.  Exer­cise leads to the pro­duc­tion of endor­phins in your body.  Endor­phins make you happy and help you deal with stress, as well as all the other phys­i­o­log­i­cal advan­tages of exer­cise and proper nutrition.
11. Put every client on a Roadmap.  This will add order to your busi­ness, increase client sat­is­fac­tion and refer­rals and free up time for you to spend time pur­su­ing your per­sonal goals and spend­ing time with fam­ily and friends.
12. Find the right work/life bal­ance.  The rule for suc­cess is 1.  Be happy and 2.  Be suc­cess­ful.  Most peo­ple think that they need to be suc­cess­ful to be happy but you sig­nif­i­cantly improve your chances of suc­cess if start with being happy.

Bob Simp­son is Pres­i­dent of Syn­chronic­ity Per­for­mance Con­sul­tants.  Bob can be reached on his direct line at 905−502−0100, toll free at 866−646−6002 or by e-mail at bob.simpson@synchronicity.ca.

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Double Stock Index Performance By Avoiding The Losers

Monday, January 14th, 2013

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consultants

Another year has come and gone and the reports are in for 2012. It was another prof­itable year for investors. 2012 rep­re­sents the fourth pos­i­tive year in a row fol­low­ing a dis­as­trous 2008.

Many peo­ple sim­ply look at the indices as their prin­ci­ple way of judg­ing performance.

So let’s start by look­ing at how a vari­ety of indices per­formed in 2012:

One prob­lem with look­ing at the indices is that within each index, there are stocks that per­form and those that underperform.

Let me take a prac­tice man­age­ment approach and exam­ine the per­for­mance of a com­bi­na­tion of the S&P 100 and TSX (Toronto Stock Exchange) 60 dur­ing 2012. Most of you have seg­mented your clients and when you first did this analy­sis, you found that roughly 20% of your clients held 80% of your assets. The same applies to per­for­mance of stocks within an index.

The table below is a sim­ple analy­sis of a com­bi­na­tion of the S&P 100 and TSX 60, where I sorted by return for 2012 and broke the list into four categories:

• Super Per­form­ers – top 25% of 2012 returns
• Per­form­ers – next 25% of 2012 returns
• Mar­ginal Per­form­ers – next 25% of 2012 returns
• Poor Per­form­ers – bot­tom 25% of 2012 returns

This table high­lights a prob­lem with index­ing. The top three cat­e­gories pro­duced an aver­age return of 24.37%, which is bet­ter than dou­ble the S&P 100 and almost four times the per­for­mance of the TSX. The bot­tom 25%, the Poor Per­form­ers, aver­aged a loss of almost 13%.

So based on this analy­sis, I could make a case that invest­ment man­age­ment should be a process of try­ing to avoid the losers and by doing so, putting the odds in your favor, as there are three win­ners for every loser.

If we exam­ine the names in the bot­tom quarter,

and sim­ply elim­i­nated the sec­tors with the most names (Energy, Met­als & Min­ing), we elim­i­nate 36 names from our list (includ­ing all stocks in every per­for­mance cat­e­gory) and improve per­for­mance to 20.20%. Note: we only lost three names from the Super Per­form­ers Group (Nexen, Agnico Eagle and Williams Com­pa­nies) and one from the Per­form­ers Group (Sil­ver Wheaton). Let’s con­sider those to be out­liers, just as the cat­e­gories for Poor Per­for­mance with sin­gle names are out­liers too.

So the ques­tion becomes “How can you iden­tify which quad­rants to avoid?”

If we look at a rel­a­tive return rank­ing of the 31 stock sec­tors in SIACharts​.com, here is how Energy (E) and Met­als and Min­ing (M&M) ranked on the first day of each month in 2012:

If you fol­low SIAChart’s rules, you want to:

• Buy stocks (or sec­tors) in the favored zone (top 25% rankings)
• Mon­i­tor stocks in the neu­tral zone (sec­ond 25% rankings)
• Avoid stocks in the unfavoured zone (bot­tom 50% of rankings)

So instead of buy­ing Met­als and Min­ing in 2012, you would have focused your buy­ing on sec­tors in the favored zone One thing that I like about this approach is that the sec­tors are rel­a­tively sta­ble. The table below is a list of sec­tors in the favoured zone at the begin­ning of 2012 and 2013:

Stock sec­tors tend to be rel­a­tively sta­ble as you can see by the table above. The only major change in the favored zone over the past year is that Tobacco and Util­i­ties dropped out and were replaced by Drugs (up 29.96%) and Con­glom­er­ates (up 43.02%). There were three other sec­tors that vis­ited the favored zone briefly. Con­sumer Non-Durables has held the num­ber one spot since May 2009 over which it has pro­duced a com­pound annual growth rate of greater than 30% over that period.

The key to suc­cess with this strat­egy is to focus on stocks, mutual funds or ETFs in sec­tors in the favored zone. You might choose secu­ri­ties from your firm’s rec­om­mended list or a fun­da­men­tal ser­vice to which you sub­scribe. It is gen­er­ally a good idea to work with names that your clients rec­og­nize and feel com­fort­able owning.

Once you have iden­ti­fied your fun­da­men­tal picks (stocks, mutual funds and ETFs) in the favored zone for the stock sec­tors, you can build a port­fo­lio, in the SIACharts pro­gram, that includes all these secu­ri­ties and do a rel­a­tive strength analy­sis to deter­mine the per­form­ers vs. the non-performers within each group. By own­ing the strongest secu­ri­ties within the strongest sec­tors and avoid­ing the under­per­form­ing sec­tors, you can improve your prob­a­bil­i­ties of suc­cess and invest­ment performance.

The good news is that this can be accom­plished with min­i­mal daily super­vi­sion and you can pro­duce com­pre­hen­sive pro­fes­sional reports for your client meet­ings. This allows you to spend the major­ity of your time in client-facing activ­i­ties so you can pro­duce high lev­els of client sat­is­fac­tion and have time to find new, prof­itable clients to grow your business.

Bob Simp­son is Pres­i­dent of Syn­chronic­ity Per­for­mance Con­sul­tants, a firm that has been pro­vid­ing con­sult­ing ser­vices to finan­cial advi­sors for the past 15 years, focus­ing on the Core Sta­bi­liz­ers of suc­cess­ful advi­sor prac­tices (Client Rela­tion­ship Man­age­ment, Invest­ment Man­age­ment and Busi­ness Devel­op­ment). He is an inde­pen­dent con­trac­tor (dis­tri­b­u­tion, advice and con­sult­ing) for SIACharts, a Canadian-based firm that pro­vides industry-leading tech­ni­cal analy­sis research tools exclu­sively to finan­cial advisors.

For more infor­ma­tion about SIACharts, please con­tact Bob at 905−502−0100 or bob.simpson@synchronicity.ca. Con­tact Bob to arrange a free one-hour dis­cus­sion with Bob and a mem­ber of the SIACharts team and a free 14-day trial.

Dis­claimer

Bob Simp­son, Syn­chronic­ity Per­for­mance Advi­sors, Syn­chronic­ity Busi­ness Coach­ing Inc., and SIACharts​.com specif­i­cally rep­re­sents that it does not give invest­ment advice or advo­cate the pur­chase or sale of any secu­rity or invest­ment. None of the infor­ma­tion con­tained in this web­site or doc­u­ment con­sti­tutes an offer to sell or the solic­i­ta­tion of an offer to buy any secu­rity or other invest­ment or an offer to pro­vide invest­ment ser­vices of any kind. Bob Simp­son, Syn­chronic­ity Per­for­mance Advi­sors, Syn­chronic­ity Busi­ness Coach­ing Inc. SIACharts​.com (Fund­Charts Inc.) nor its third party con­tent providers shall be liable for any errors, inac­cu­ra­cies or delays in con­tent, or for any actions taken in reliance thereon. Back tested per­for­mance is hypo­thet­i­cal (it does not reflect trad­ing in actual accounts) and is pro­vided for infor­ma­tional pur­poses to indi­cate his­tor­i­cal per­for­mance had SIA Report portfolio(s) been avail­able over the rel­e­vant period. Past per­for­mance does not guar­an­tee future results. Invest­ment returns and prin­ci­pal value will fluc­tu­ate, so that investors’ shares, when sold, may be worth more or less than their orig­i­nal cost. Invest­ing in any invest­ment process, does not guar­an­tee that an investor will make money, avoid los­ing cap­i­tal, or indi­cate that the invest­ment is risk-free. There are no absolute guar­an­tees in invest­ing so when review­ing any back tested per­for­mance infor­ma­tion on the Syn​chronic​ity​.com or SIACharts​.com web­site, email con­tent, or other mate­ri­als, ensure that you do not use to make invest­ment decisions.

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Year-end Checklist for Improved Performance in 2013

Wednesday, November 21st, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

Now that we have hit the half way point of Novem­ber, it is a great time to start think­ing about how to improve per­for­mance in 2013 and make it a year to get on a path to achiev­ing your per­sonal and busi­ness goals.

The end of a year or the begin­ning of a new year are times for reflec­tion and plan­ning and often­times result in New Year’s Res­o­lu­tions.  It is the time of the year that peo­ple join gyms or weigh loss pro­grams to get into shape and hire coaches to improve per­sonal and busi­ness performance.

It is a very impor­tant time for your busi­ness as your clients are in the state of mind to engage in review­ing progress and plan­ning for the New Year.  The next cou­ple of months is a great time to do tax plan­ning and present an oppor­tu­nity to expand your busi­ness net­work by meet­ing with your clients’ accountants.

Over the next cou­ple of months, the theme of my blogs will focus on steps you need to take to pre­pare your­self and your busi­ness for improved per­for­mance in 2013.

Plan­ning should be a sim­ple three step process, in which you answer these three questions:

1. Where are you now?
2. Where do you plan to be in the future?
3. How do you plan to get there?

If you always know the answer to these ques­tions, you will be able to live your life with very lit­tle stress and make good decisions.

Year-end or Begin­ning of New Year Plan­ning For Clients

Think about this when you work with clients.  To help your clients to iden­tify where they are now, you can pro­duce a sim­ple net worth state­ment and what we call an Estate Net Worth State­ment.  A Net Worth State­ment iden­ti­fies what you are worth today and an Estate Net Worth State­ment iden­ti­fies what you are worth today should you die.  Great way to demon­strate that some clients need addi­tional life insurance.

If you make the cre­ation of a Net Worth State­ment an annual event, it can be rel­a­tively sim­ple.  I have heard from many advi­sors that col­lect­ing the nec­es­sary data is like pulling teeth and this makes pro­duc­tion of a Net Worth State­ment too dif­fi­cult.  Where there is a will there is a way.

There are a cou­ple of ways of doing this:

You can build a spread­sheet that can be pre­sented to your clients in either elec­tronic or paper for­mat.  Make sure that you pop­u­late the work­sheet with all infor­ma­tion relat­ing to accounts that they hold with you. (Note:  Many clients are not com­fort­able com­plet­ing spreadsheets)

You can use a pro­gram like Pre­ciseFP.  It is designed to col­lect data and inte­grates with a grow­ing list of CRMs and finan­cial plan­ning soft­ware pro­grams.  Note:  Pre­cise FP’s is US-based so the cal­cu­la­tions may not be appro­pri­ate for Cana­dian advisors.

• A pro­gram that I really like is Fluid Sur­veys.  Below is a video that dis­cusses how to inte­grate Fluid Sur­veys with Sales­force.  I know a num­ber of firms have adopted Sales­force recently and this might give you some ideas on how to make Sales­force a more pow­er­ful tool for your busi­ness.  If you do not use Sales­force, it is still worth watch­ing this 20-minute video to see how to col­lect data to gen­er­ate a Net Worth State­ment.  (Yeah, I know it is too long to watch)

Note:  We are in no way asso­ci­ated with either firm men­tioned above.  Just shar­ing pro­grams that we like.

Year-end or Begin­ning of New Year Plan­ning For Your Business

For your busi­ness, it is also a good time to reflect on the year just passed.  If you have a plan for 2012, you have a base­line (like the net worth state­ment) and the review is more pow­er­ful.  In your annual review, you should look at the fol­low­ing to iden­tify strengths and weak­nesses of your business.

• Cal­cu­late your growth rate for 2012.  You may be sat­is­fied with know­ing your growth rate, but I would go deeper.  I would like to the num­bers inside your growth rate.  Here is a good breakdown:
• Your growth rate for 2012
• Updated AUM com­pound growth rates for 3-years, 5-years and 10-years if you have kept this data
• Num­ber of new clients, aver­age AUM per client and total assets attracted in 2012
• Num­ber of clients, aver­age AUM per client and total assets of clients who left your prac­tice and the rea­son they moved
• The source of all new clients, includ­ing such cat­e­gories as client refer­rals, pro­fes­sional refer­rals, per­sonal refer­rals and other busi­ness devel­op­ment pro­grams you con­ducted in 2012
• Per­for­mance sta­tis­tics of your model port­fo­lios in 2012 and how this affected your longer-term per­for­mance numbers

I know that I am get­ting a bit geeky on you and that most of you have not kept these num­bers.  If that is the case, jot down your num­bers for the end of 2012 so you have a base­line on which to judge your per­for­mance in 2013.

If you don’t keep sta­tis­tics like this for your busi­ness, it is dif­fi­cult to make good deci­sions for your busi­ness.  How do you know what is work­ing and what is not working?

These sta­tis­tics will help you assess such things as:

Your 1-year, 3-year, 5-year and 10-year growth rates tell you how your busi­ness is grow­ing.  Your growth rate will help you to project where your busi­ness will be in 3 to 5 years.  A $50 mil­lion AUM book will grow to to $57,881,250 in 3-years at 5% com­pounded, to $66,550,000 at 10% and $86,440,000 at 20%.

The num­ber and qual­ity of refer­rals that you gen­er­ated in 2012 helps you deter­mine how your clients judge the qual­ity of your client rela­tion­ship, finan­cial plan­ning and invest­ment pro­grams.  You can bury your head in the sand and believe that these sys­tems are work­ing great but if you are not gen­er­at­ing client refer­rals, they are not work­ing effectively.

Num­ber and qual­ity of client refer­rals also tell you how much time and finan­cial resources you need to spend on busi­ness devel­op­ment activ­i­ties.  If your goal is to attract 10 new clients who meet your ideal client pro­file (let’s use $500,000 in investable assets for this exam­ple) in an aver­age year and you get 5 through client refer­rals, then you have to build a busi­ness devel­op­ment plan to attract an addi­tional five ideal clients.  Refer­rals are the cheap­est way to attract new clients.

Invest­ment per­for­mance is impor­tant in attract­ing and retain­ing new clients.  Year-end is a great time to review the stocks, bonds, ETFs and mutual funds that you hold.  You should also con­duct a com­plete analy­sis of your model port­fo­lios, invest­ment processes and invest­ment man­agers.  See my arti­cle on Invest­ment Focus Days.

I will go deeper on these con­cepts in future arti­cles in this series.

If you have any ques­tions, please feel free to con­tact me directly.

Bob Simp­son

Tele­phon:  905–502-0100

E-mail:  bob.simpson@synchronicity.ca

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Increased Value with Technical Overlays on Internal Research

Tuesday, October 30th, 2012

by Brian Liv­ingston, SIA Charts

In mid Octo­ber, Bob Simp­son, Pres­i­dent of Syn­chronic­ity Per­for­mance Con­sul­tants and a reg­u­lar con­trib­u­tor to Advi­sor Ana­lyst, pub­lished an arti­cle enti­tled “Learn to Ride The Win­ners and Avoid The Losers”.

This arti­cle is a follow-up to Bob’s arti­cle to give you addi­tional infor­ma­tion about how advi­sors across North Amer­ica are using SIACharts to improve their invest­ment process and help clients to achieve their goals through enhanced invest­ment performance.

Regard­less of what com­pany you work for, in all like­li­hood you receive inter­nal research from your firm.  Some advi­sors use this inter­nal research exclu­sively while oth­ers may ques­tion the rela­tion­ship their com­pany has with the rec­om­men­da­tions they are inter­nally get­ting. Some advi­sors don’t trust their inter­nal research at all, choos­ing instead to go with an unbi­ased third party tool for their invest­ment deci­sion mak­ing. Nor­mally this research is based on fun­da­men­tal cri­te­ria: P/E ratios, earn­ings esti­mates, etc.  What is usu­ally lack­ing from this analy­sis is the tech­ni­cal side of things.  Although some advi­sors look at tech­ni­cal analy­sis as some form of voodoo, when tak­ing fun­da­men­tal analy­sis and then com­bin­ing it with tech­ni­cal analy­sis, you can really get the best of both worlds.

I want to high­light two ways advi­sors are using tech­ni­cal analy­sis to over­lay with their fun­da­men­tal research. First, you can com­bine tech­ni­cal analy­sis with fun­da­men­tals by doing a rel­a­tive strength analy­sis on the fun­da­men­tal choices to help nar­row down your invest­ment selec­tion to see which hold­ings are strong in both worlds. Sec­ond, you can com­pare any two indi­vid­ual hold­ings against each other to see who the clear win­ner is.

SIACharts works with pro­fes­sional advi­sors right across North Amer­ica, and they spe­cial­ize in tech­ni­cal analy­sis on a rel­a­tive strength basis.

Using their sys­tem, we can take your firm’sin-house fun­da­men­tal rank­ings and then get SIACharts to do their tech­ni­cal over­lay for us.  The end result gives us a sec­ond list that we can now use as a com­par­i­son rank­ing tool against the fundamentals.

What advi­sors can then do is cross ref­er­ence against the two lists to find what is appear­ing at the top of both.  This process focuses our buy­ing oppor­tu­ni­ties and gives a straight-forward process to use for the tim­ing of the buy/sell of these hold­ings, which is where tech­ni­cal analy­sis excels. This helps to min­i­mize the num­ber of choices for your con­sid­er­a­tion and has helped to min­i­mize risk and increase performance.

Con­sider the top chart to be the fun­da­men­tal rank­ing of a list of rec­om­mended stocks by your firm.  The sec­ond list is the rel­a­tive strength rank­ing done by SIACharts.  You can see that there are 5 posi­tions in the top 10 of both lists, which helps to guide you to get­ting into posi­tions that are both ranked fun­da­men­tally and tech­ni­cally strong.

Also, you can com­pare two fun­da­men­tally strong hold­ings you are look­ing between whether they be two stocks, ETFs, Indexes, or Mutual Funds for a more macro-oriented overview (like IVV vs. AGG) or for more micro-oriented com­par­isons (like AAPL vs. DELL).  For either the indi­vid­ual com­par­i­son or for your group of hold­ings you have ranked, you can alterthe per­cent­age of the indi­vid­ual chart­ing com­par­isons, thereby effec­tively alter­ing the time­frame that you may be look­ing at​.By low­er­ing the per­cent­age, we can be more aggres­sive in your trading/investing style and by increas­ing the per­cent­age we min­i­mize trans­ac­tions and are in posi­tions for a longer period of time.

This chart above is show­ing that U.S. Equi­ties are cur­rently out­per­form­ing U.S. Bonds on a 2% com­par­i­son chart.

SIACharts has been advis­ing invest­ment advi­sors across North Amer­ica for the last six years help­ing to min­i­mize over­all risk and nar­row down your invest­ment selec­tions to find out­per­for­mance. Using their pro­pri­etary rel­a­tive strength rank­ing sys­tem, SIACharts has been very suc­cess­ful in giv­ing invest­ment pro­fes­sion­als a unique and pow­er­ful tool to sim­plify your invest­ment prac­tice. They have worked suc­cess­fully with the major banks and invest­ment com­pa­nies across Canada pro­vid­ing these tech­ni­cal over­lays for users sub­scribed to them for their indi­vid­ual firm research reports.

By being able to keep advi­sors in the strongest choices SIACharts has been able to min­i­mize the risk asso­ci­ated with invest­ment selec­tion, get­ting advi­sors out of stocks like Research in Motion and Yel­low Media before they crashed, and just as impor­tantly keep­ing clients out stocks like Man­ulife and Shop­pers Drug Mart.

Some advi­sors swear by using just fun­da­men­tal research and other advi­sors swear by using tech­ni­cal research, but there is grow­ing num­ber of advi­sors who are actively learn­ing to marry the best of both of these worlds with great results for both them­selves and their clients.

Intro­duc­tion Webi­nar to SIACharts​.com

SIACharts is Canada’s largest and most suc­cess­ful tech­ni­cal analy­sis advi­sory web­site. We actively help advi­sors across North Amer­ica bet­ter man­age their client’s port­fo­lios through risk man­age­ment, invest­ment selec­tion, port­fo­lio man­age­ment, and asset class rota­tion strategies.

This webi­nar will be an overview of the invest­ment tools and strate­gies that SIACharts pro­vides for their clients includ­ing asset allo­ca­tion, SIA’s rel­a­tive strength sys­tem in our reports, and port­fo­lio cus­tomiza­tion. After the overview, we will allow time for ques­tions and answers on any part of the web­site. We expect this call to be 30 to 40 min­utes but have allowed time of up to 1 hour.

Reg­is­ter for a ses­sion now by click­ing a date below:

Thu, Nov 1, 2012 4:00 PM — 5:00 PM EDT
Tue, Nov 6, 2012 2:00 PM — 3:00 PM EST
Fri, Nov 9, 2012 12:00 PM — 1:00 PM EST

Once reg­is­tered you will receive an email con­firm­ing your reg­is­tra­tion
with infor­ma­tion you need to join the Webinar.

Sys­tem Require­ments
PC-based atten­dees
Required: Win­dows® 7, Vista, XP or 2003 Server
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Required: Mac OS® X 10.5 or newer

Mobile atten­dees
Required: iPhone®, iPad®, Android™ phone or Android tablet

You can also sign up for a free 14-day trial by click­ing on the link below:
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Tags: Best Of Both Worlds, Bob Simpson, Brian Livingston, Contributor, Earnings Estimates, Fundamental Analysis, Fundamental Choices, Fundamental Criteria, Fundamental Research, Investment Decision, Investment Performance, Investment Selection, Likelihood, Losers, Party Tool, Performance Consultants, Professional Advisors, Ratios, Relative Strength Analysis, Voodoo
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Twelve Steps to Making Your Business Fun Again

Thursday, August 30th, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

The past ten years have been labeled “The Lost Decade for North Amer­i­can Secu­ri­ties”.  Investors have lost con­fi­dence in finan­cial mar­kets and hope that their finan­cial goals may some­day be realized.

Finan­cial advi­sors, I have spo­ken with recently, talk about how the indus­try isn’t fun any more.  They tell sto­ries about how they cringe when the phone rings and call dis­play sends them a mes­sage that a cer­tain client is call­ing.  Clients are get­ting totally dis­il­lu­sioned by volatil­ity and poor ten-year per­for­mance numbers.

On top of this, com­pli­ance makes it almost impos­si­ble to do busi­ness.  I can sit in front of my iMac, do some research and pound out an arti­cle like this, reread it a few times, log into my blog’s back­end, paste the arti­cle, reread it a cou­ple more times and hit post and the arti­cle is there for the world to see.  Jealous?

In 1989, I became dis­il­lu­sioned with my role as an advi­sor and made a deci­sion to pur­sue man­age­ment.  I had a book of $120 mil­lion, great rev­enue, a great team and was well respected within my firm (I think) but I wasn’t par­tic­u­larly happy.  I was turn­ing 40 and sim­ply couldn’t see myself doing this work for another 20 or 25 years.

The stock mar­ket crash in 1987 had taken its toll on client con­fi­dence and even though my clients did well that year, pri­mar­ily because I was fixed income focused rather than equi­ties focused, it was really dif­fi­cult to mobi­lize them on opportunities.

I can hon­estly say I have been in your shoes.  1987 was quick and over com­pared to what you are expe­ri­enc­ing but the hang­over is the same.  Based on my per­sonal expe­ri­ence, here are my top 12 rec­om­men­da­tions to make your busi­ness fun again:

1. You have the best job in the world.  You make more money than most peo­ple you know and have all the free­dom in the world.  You can take hol­i­days or days off when­ever you want and attend lit­tle Johnny’s or Mary’s games or dance recitals and you don’t need to spend one to six months per year on a plane or in a hotel room.
2. Don’t get caught up in the num­bers.  Your num­ber one goal should be hap­pi­ness, not assets under man­age­ment or rev­enue.  If man­age­ment is putting pres­sure on you to increase rev­enue, find a firm that under­stands that today’s busi­ness is about gath­er­ing assets, sat­is­fy­ing clients and charg­ing fees based on the value you pro­vide and that rev­enue is sim­ply a bi-product of doing good work.
3. Focus on build­ing equity.  Every new client, every new dol­lar of AUM and every new COI rela­tion­ship you develop con­tributes to build­ing equity in your firm.  In many cases, your busi­ness is the most valu­able asset on your per­sonal bal­ance sheet.
4. Dis­en­gage from toxic clients.  Most busi­nesses have them.  They are the ones that you try to avoid at all costs.  I will bet that if you did a dif­fer­ent kind of seg­men­ta­tion:  where you rank clients into four cat­e­gories – Awe­some peo­ple to work with, Good peo­ple to work with, OK peo­ple to work with and Hor­ri­ble peo­ple to work with, you can eas­ily iden­tify the ones from whom you should dis­en­gage.  My rule of thumb is that 3 – 5% of clients cause 95% of grief.  The most suc­cess­ful advi­sors only work with peo­ple they like.  It is much less expen­sive to break free from a high value toxic client than split with your spouse and give up 50% of your net worth because you are miserable.
5. Deal with bad invest­ments and deci­sions.  I remem­ber read­ing an arti­cle back in the ‘80s on when to sell an invest­ment.  Ask your­self the ques­tion “Would I buy this invest­ment today?”  If the answer is No, you should sell.  Mis­takes that are not prop­erly dealt with reduce con­fi­dence for you and your clients.  Seg­ment your invest­ments into two cat­e­gories – 1. Would buy today and 2. Would not buy today/should I sell.
6. In his book, The Hap­pi­ness Advan­tage, Shawn Achor writes:  “Neu­ro­sci­en­tists have found that finan­cial losses are actu­ally processed in the same areas of the brain that respond to mor­tal dan­ger.  In other words, we react to with­er­ing prof­its and a sink­ing retire­ment account the same way our ances­tors did to a saber-tooth tiger.”  Clients need time to deal with their expe­ri­ences of loss and volatil­ity.  They need to work through their five stages of loss – Denial, Anger, Bar­gain­ing, Depres­sion and Accep­tance.
7. Start hav­ing “let’s start over” client meet­ings.  Some­times, it is a good strat­egy to sim­ply start over.  After a ter­ri­ble loss Vince Lom­bardi started a prac­tice by say­ing “Gen­tle­men, this is a foot­ball.”  In today’s volatile world, things change very quickly.  Think about hav­ing a start-over meet­ing every three years, start­ing with a new dis­cov­ery meet­ing. Explain to your clients that dur­ing tur­bu­lent times, it makes sense to reassess their sit­u­a­tion, their goals and their plans and look for the best solu­tion, based on cur­rent information.
8. Lay the facts on the table.  If you put clients into invest­ments in the late ‘90s that were based on buy and hold, which was the proper strat­egy for the sec­u­lar bull mar­ket from 1982 – 2000 but not a very prof­itable strat­egy for the past 11 years, dis­cuss sec­u­lar bull vs. sec­u­lar bear mar­kets and volatil­ity, rel­a­tive return strate­gies vs. absolute return strate­gies, etc.
9. Do your home­work.  You should spend at least one day per quar­ter exclu­sively ana­lyz­ing port­fo­lios, invest­ments, invest­ment man­agers, mar­ket per­for­mance and out­look and post your find­ings for clients.  Sec­u­lar bull mar­kets make advi­sors lazy and this may have come back to bite you.  Don’t put too much faith in sin­gle sources for information.
10. Exer­cise and eat prop­erly.  Exer­cise leads to the pro­duc­tion of endor­phins in your body.  Endor­phins make you happy and help you deal with stress, as well as all the other phys­i­o­log­i­cal advan­tages of exer­cise and proper nutrition.
11. Put every client on a Roadmap.  This will add order to your busi­ness, increase client sat­is­fac­tion and refer­rals and free up time for you to spend time pur­su­ing your per­sonal goals and spend­ing time with fam­ily and friends.
12. Find the right work/life bal­ance.  The rule for suc­cess is 1.  Be happy and 2.  Be suc­cess­ful.  Most peo­ple think that they need to be suc­cess­ful to be happy but you sig­nif­i­cantly improve your chances of suc­cess if start with being happy.

Bob Simp­son

Direct Line:  905−502−0100

Toll Free:      866−646−6002

E-mail:  bob.simpson@synchronicity.ca

Text Mes­sage:  905−502−0100

Web­site:  www​.syn​chronic​ity​.ca

Join our Dis­cus­sion Group on LinkedIn:  www​.linkedin​.com/​g​r​o​u​p​s​/​A​d​v​i​s​o​r​-​C​o​l​l​a​b​o​r​a​t​i​o​n​-​4​2​4​8​7​2​5​/​a​b​out

Bio:  www​.syn​chronic​ity​.ca/​a​b​out

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Tags: Backend, Bob Simpson, Client Confidence, Compliance, Decade, Financial Advisors, Financial Goals, Financial Markets, Freedom In The World, Hangover, North American Securities, Performance Numbers, Personal Experience, Phone Rings, S Games, Stock Market Crash, Synchronicity, Turning 40, Twelve Steps, Volatility
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3% of Issues and Clients Cause 90% of Grief

Thursday, August 16th, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consultants

This arti­cle is a fourth in a series about build­ing a great busi­ness.  The first three arti­cles dis­cussed set­ting goals and objec­tively ana­lyz­ing the cur­rent state of your business:

Build­ing a $100 Mil­lion Busi­ness – Set­ting Your Goals

Build­ing a $250 Mil­lion Busi­ness – Set­ting Goals

Build­ing a Great Busi­ness – Where are You Now?

These steps are designed to help you gain clar­ity about your busi­ness – where you are now and where you plan to be in the future.

Before you start tak­ing steps to put plans in place, you need to iden­tify issues that are hold­ing you back from focus­ing com­pletely on achiev­ing your goals and build­ing a sus­tain­able growth business.

We all have issues that drive us crazy:

• Bad habits
• Team mem­bers who are not productive
• Dif­fi­cult clients
• Bad invest­ments
• Tech­nol­ogy that is hard to use and frustrating
• Com­pli­ance issues

I have a rule of thumb – three to five per­cent of issues or clients cause you 90% of grief.  Just think about this for a minute.  How many of your clients are stress­ful to work with?  What tech­no­log­i­cal solu­tions require con­stant atten­tion?   What per­sonal or busi­ness prob­lems occupy your thoughts when you are at work, at play or spend­ing time with your family?

We call these issues your Prin­ci­pal Frus­tra­tions.  Before you can move for­ward, you need to deal with these clients or issues.

The prob­lem with many Prin­ci­pal Frus­tra­tions is that they are often too com­plex to resolve.  In fact, when most advi­sors make a list of their Prin­ci­pal Frus­tra­tions, the list is com­prised of such things as:

• I need more clients
• I lose clients due to my inabil­ity to pro­vide the level of ser­vice they expect
• My client port­fo­lios are not gen­er­at­ing pos­i­tive results

Before you can iden­tify solu­tions to these frus­tra­tions, you need to break them down into less com­plex com­po­nents.  Let me give you an example:

Prob­lem:  I need more clients

Poten­tial com­po­nents of the problem:

• I do not have a good lead gen­er­a­tion system
• I do not allo­cate time and money to gen­er­ate leads
• I am not gen­er­at­ing enough referrals
  • I am not deliv­er­ing client expe­ri­ences that encour­age clients to refer friends and colleagues
  • My client rela­tion­ship man­age­ment processes are too intangible
  • My clients do not under­stand what I do so how can they talk to friends and col­leagues about me
  • I don’t con­duct edu­ca­tional work­shops or events that encour­age clients to invite friends and colleagues
  • I don’t have a good web­site or mar­ket­ing mate­r­ial to help con­vert leads into clients
• I don’t do a good enough job of fol­low­ing up on leads
• I don’t have per­sonal or team capac­ity to attract more clients

Now we have some­thing to work with.  Some of the items in the list above can be bro­ken down fur­ther.  The goal is to break items down until you have small prob­lems for which you can cre­ate solu­tions.  It is much eas­ier to fix a series of small prob­lems than to try to tackle a big one.

A great way to iden­tify these frus­tra­tions is through client com­plaints.  When a client com­plains about some­thing, he is doing you a favour.  He is giv­ing you the oppor­tu­nity to resolve a prob­lem that is caus­ing him frus­tra­tion.  Solve the prob­lem and you increase sat­is­fac­tion.  Fail to resolve it and you cre­ate a detrac­tor – some­body who sends out neg­a­tive mes­sages about you to friends and colleagues.

Here is our process for deal­ing with Prin­ci­pal Frustrations:

1. Quan­tify the poten­tial cost of Prin­ci­pal Frustrations
2. Pri­or­i­tize your Prin­ci­pal Frustrations
3. Choose a  single Principal Frustration
4. Iden­tify action steps to resolve the problem
5. Track progress of solu­tions for each frustration

1. Quan­tify the poten­tial cost of your Prin­ci­pal Frustrations

Before you start try­ing to solve your prob­lems, you should pri­or­i­tize your frus­tra­tions, based on a prob­lem value.  Prob­lem value is a cal­cu­la­tion of the total cost that you may incur as a result of the frus­tra­tion.  Let’s use the loss of a client due to a ser­vic­ing issue as an example.

In this exam­ple, you lost a client who has $500,000 in a 1% fee-based account.  At first glance, you may assume that this frus­tra­tion cost you $5,000 but your loss is much greater than that.  If you had bet­ter ser­viced this client, she may have worked with you for another seven years and she is grow­ing her account by 10% per year, includ­ing invest­ment return.  At that rate, her account will be just under $1 mil­lion and would have gen­er­ated over $57,000 in fees over the seven-year period.

This is only the start of your costs.  If you don’t fix this prob­lem, you may lose addi­tional clients.  If you lost five clients due to poor client ser­vic­ing, this prob­lem could cost you over a quar­ter of a mil­lion dollars.

2. Pri­or­i­tize Your Prin­ci­pal Frustrations

Based on the above analy­sis, develop a pri­or­i­tized list of your frus­tra­tions, based on prob­lem values.

3. Choose a Sin­gle Prin­ci­pal Frustration

Based on your analy­sis in step one, you should choose one of your high pri­or­ity frus­tra­tions.  Ide­ally, you will start at the top and work your way down the list.   As you iden­tify addi­tional frus­tra­tions, add them to your list, based on prob­lem values.

Note:  You will accom­plish more if work on a sin­gle frus­tra­tion rather than try­ing to resolve mul­ti­ple frustrations.

Let’s con­tinue with the exam­ple of los­ing a client due to client ser­vic­ing issues.  Try to drill down to find out what the root of the prob­lem is.  Is it that you are not con­tact­ing clients fre­quently enough?  Are you not return­ing calls promptly?  Do your meet­ings lack direc­tion?  Are your quar­terly reports too detailed or not detailed enough?    As high­lighted in the exam­ple above, by focus­ing on the smaller issues, you can solve the major prob­lem more quickly.

By doing so, you may expand your list of frus­tra­tions.  Pick the most impor­tant one and add the oth­ers to your list for future review.

4. Iden­tify action steps to resolve the problem

Some prob­lems may be sim­ple to resolve, whereas oth­ers are more com­plex.  The goal is to find a solu­tion that per­ma­nently elim­i­nates the prob­lem.   If it is a sim­ple prob­lem that can be resolved in one step, then go ahead and solve it.  If it is more com­plex, you may need to look at a vari­ety of options.  Cre­ate a plan to solve the prob­lem, includ­ing the nec­es­sary resources.  Then assign respon­si­bil­ity to an indi­vid­ual in your team and deter­mine a due date.

5. Track progress for each frustration

The steps above are log­i­cal steps in a typ­i­cal project man­age­ment approach.  Make sure to follow-up with the indi­vid­u­als in your team who have been assigned respon­si­bil­ity for res­o­lu­tion of frus­tra­tions.  As the owner of your busi­ness, you are ulti­mately respon­si­ble.  If you fail to keep your team mem­bers account­able for cre­at­ing solu­tions, you will find it increas­ing dif­fi­cult to get things done.

When we work with clients, we start by ana­lyz­ing Prin­ci­ple Frus­tra­tions.  We do this for two reasons:

• It helps us to get a bet­ter idea of key issues that need to be resolved and helps us struc­ture a program
• Until some Prin­ci­pal Frus­tra­tions have been dealt with, many advi­sors do not have the abil­ity to be present in meet­ings, work on assign­ments and be more proac­tive in deal­ing with issues to build a great business

As I stated ear­lier in this arti­cle, three to five per­cent of issues or clients cause you 90% of grief.  If you can clear up the­ses issues, you will feel free.  Only then can you be ready to take proac­tive steps to build­ing a great busi­ness and achieve sus­tain­able growth.

Spe­cial Offer

We are so con­vinced that our Prin­ci­pal Frus­tra­tions Process is so pow­er­ful in help­ing advi­sors to solve prob­lems and get back on track to build­ing a great busi­ness that we offer a series of free 15-minute ses­sions.  We con­duct these ses­sions on Thurs­days and Fri­days between 9:00 a.m. and 3:00 p.m. Eastern.

To book a ses­sion, sim­ply choose a date and e-mail us three times that work for you and we will e-mail you back a con­fir­ma­tion.  Please include the tele­phone num­ber at which you can be con­tacted for your session.

All dis­cus­sions are one-on-one and con­fi­den­tial.  There is absolutely no cost or obligation.

To book your ses­sion, e-mail us at info@synchronicity.ca or call us at 905−502−0100.

Bob Simp­son

Direct Line:  905−502−0100

Toll Free:      866−646−6002

E-mail:  bob.simpson@synchronicity.ca

Text Mes­sage:  905−502−0100

Web­site:  www​.syn​chronic​ity​.ca

Join our Dis­cus­sion Group on LinkedIn:  www​.linkedin​.com/​g​r​o​u​p​s​/​A​d​v​i​s​o​r​-​C​o​l​l​a​b​o​r​a​t​i​o​n​-​4​2​4​8​7​2​5​/​a​b​out

Bio:  www​.syn​chronic​ity​.ca/​a​b​out

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Tags: 100 Million, Achieving Your Goals, Bad Habits, Bob Simpson, Business Problems, Client Portfolios, Compliance Issues, Constant Attention, Current State, Frustrations, Grief, Growth Business, Performance Consultants, Rule Of Thumb, Setting Goals, Spending Time With Your Family, Sustainable Growth, Synchronicity, Taking Steps, Technological Solutions
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Using Milestones To Achieve Sustainable Growth

Thursday, August 9th, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

We have begun a new series of arti­cles over the past month.  The focus of these arti­cles is to help advi­sors to achieve Sus­tain­able Growth Milestones.

We use mile­stones to help advi­sors to set and real­ize their goals.  They can help you focus your atten­tion on con­stant improve­ment of your prac­tice rather than get­ting involved in ran­dom, feel-good activ­i­ties that pro­vide lit­tle more than a tem­po­rary boost in performance.

In plan­ning your busi­ness, you need to have a clear vision of what you want your busi­ness to look like when it is com­plete.  For exam­ple, if your goal is to build a busi­ness with $100 mil­lion or $250 mil­lion in assets under man­age­ment, you need to be able to see what it will look like when you achieve this goal:

• What is your rev­enue model?
• How many fam­i­lies are you work­ing with?
• What is the min­i­mum and aver­age assets under man­age­ment per client?
• What plat­form are you using to facil­i­tate your business?
• Are you work­ing in an employee model or an inde­pen­dent model?
• Are you a gen­er­al­ist or a specialist?
• What is the makeup of your team?
• How are you man­ag­ing investments?
• Where are your offices and how are they designed?
• How do you man­age client relationships?
• What is the makeup of your per­sonal, busi­ness and client networks?
• What are your busi­ness devel­op­ment processes?
• How do you allo­cate your time – client-facing, admin­is­tra­tive, busi­ness management?

The prob­lem with tra­di­tional plan­ning is that longer-term goals are dif­fi­cult to visu­al­ize with a high degree of clar­ity.  There are sim­ply too many things that may alter your path on the way to your goals.

Let’s say that your time­frame for achiev­ing your $100 or $250 mil­lion goal is ten years.  I am con­fi­dent to say that most advi­sors have very lit­tle idea about what the world of finan­cial ser­vices will look like in ten years.  Tech­no­log­i­cal inno­va­tion may com­pletely change your indus­try.  On the other hand, three years is pre­dictable and much more manageable.

By estab­lish­ing a series of three-year mile­stones on your path to your ten-year goals, you can reset your plan every three years and estab­lish new strate­gies and tac­tics that are appro­pri­ate for the con­di­tions at the time.

Your goal should be sus­tain­able growth.  Many advi­sors are able to grow suc­cess­ful busi­nesses but are not able to sus­tain growth as the busi­ness matures.  The inabil­ity to main­tain above indus­try aver­age growth rates can cost mil­lions of dol­lars in pre-tax income, assum­ing the sale of the busi­ness at the end of a ten-year period.

To read arti­cles posted on Syn​chronic​ity​.ca in this new series, please click on the links below:

Build­ing a $100 Mil­lion Busi­ness – Set­ting Your Goals

Build­ing a $250 Mil­lion Busi­ness – Set­ting Goals

Build­ing a Great Busi­ness – Where are You Now?

Watch our web­site as we will be post­ing new arti­cles on a reg­u­lar basis in this new series.

I enjoy hear­ing from peo­ple who read my arti­cles by phone, e-mail or text mes­sage.  I respond to all inquiries the same day.  If you have a prob­lem and would like to dis­cuss it with some­body, I would wel­come your call;  I enjoy help­ing peo­ple solve prob­lems and build more suc­cess­ful businesses.

Bob Simp­son

Direct Line:  905−502−0100

Toll Free:      866−646−6002

E-mail:  bob.simpson@synchronicity.ca

Text Mes­sage:  905−502−0100

Web­site:  www​.syn​chronic​ity​.ca

Join our Dis­cus­sion Group on LinkedIn:  www​.linkedin​.com/​g​r​o​u​p​s​/​A​d​v​i​s​o​r​-​C​o​l​l​a​b​o​r​a​t​i​o​n​-​4​2​4​8​7​2​5​/​a​b​out

Bio:  www​.syn​chronic​ity​.ca/​a​b​out

Copy­right © Syn­chronic­ity Per­for­mance Consulting

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: 100 Million, Administrative Business, Assets Under Management, Bob Simpson, Clear Vision, Client Networks, Client Relationships, Generalist, Growth Milestones, Independent Model, Managing Investments, Performance Consulting, Personal Business, Revenue Model, Sustainable Growth, Synchronicity, Technological Innovation, Term Goals, Time Client, Timeframe
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Building a Great Business – Where are You Now?

Tuesday, July 31st, 2012

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consulting

I recently pub­lished two articles:

Build­ing a $100 Mil­lion Busi­ness – Set­ting Goals

Build­ing a $250 Mil­lion Busi­ness – Set­ting Goals

This arti­cle dis­cusses the next steps for busi­ness that are in pur­suit of the $100 mil­lion goal or those that have already achieved that goal and have set their sights on a higher goal.

There is a great book writ­ten by Dr. Spencer John­son, author of two top-selling books “One Minute Man­ager” and “Who Moved My Cheese?” called “The Present – The Gift That Makes You Hap­pier and More Suc­cess­ful at Work and in Life, Today!”

In this book, Dr. John­son dis­cusses that to be truly happy, you need to live in the present.  But before you can be happy in the present, you need to learn from the past and have plans for the future.

Note:  If I were an advi­sor today, I would give a copy of this book to every client.  It can be read in a cou­ple of hours and rein­forces all the key con­cepts of planning.

In my first two arti­cles in this series, I dis­cussed how to set goals that will pass the SMART test by using the Sus­tain­able Growth Curve.

Through this process, you set two major goals:  num­ber of clients and aver­age assets under man­age­ment per client for a series of three-year benchmarks.

This is an impor­tant first step.  The sec­ond step is take a step back and objec­tively ana­lyze the cur­rent posi­tion of your busi­ness and how you arrived at your cur­rent posi­tion.  The impor­tant word is objec­tively.  You need to dis­cover the truth.

In some cases, your busi­ness is on track and mak­ing great progress.  You might need to make some minor adjust­ments to sus­tain your growth.  In other cases, you are out of con­trol.  If you con­tinue on your cur­rent path, you are going to be totally mis­er­able or out of the busi­ness within one to three years.  You need to totally retool your business.

In this step, you need to do two things:

1. Com­plete an objec­tive analy­sis of your cur­rent business
2. Ana­lyze the devel­op­ment of your busi­ness since incep­tion and iden­tify what you did that had a pos­i­tive impact on your busi­ness and what has had a neg­a­tive impact.

Objec­tive Analysis

In your analy­sis of your busi­ness, there are a num­ber of things that you should review:

• What is the com­pound growth rate of your busi­ness over 1-year, 3-years, 5-years and 10-years (if applicable)?
• Your client base:  How many clients do you work with, how many fit into clas­si­fi­ca­tions such as super ideal, ideal, mar­gin­ally ideal and less than ideal?
• How have you attracted these clients?  By iden­ti­fy­ing the method of client attrac­tion, you can get a clear view of your level of busi­ness devel­op­ment competency.
• Where do you gen­er­ate 80% of your rev­enue?  It is impor­tant to dif­fer­en­ti­ate prof­itable busi­ness from unprof­itable business.
• Is your busi­ness run­ning at capac­ity or do you have room for growth?
• Are your cur­rent team mem­bers the right peo­ple to take your busi­ness for­ward or do you need to replace one or more team members.

This list can get you started.  You may wish to add addi­tional ques­tions to your review process.

Look Back On The Devel­op­ment of Your Business

Although the past is not nec­es­sar­ily a great pre­dic­tor of the future, it can help you gauge whether your goals are rea­son­able.  If, for exam­ple, you have grown your busi­ness at a 7% com­pound growth over the past five years and you want to grow at 20%, you will need to make changes.  Sim­i­larly, if you have attracted the major­ity of your ideal clients through the pur­chase of another advisor’s busi­ness and few through other meth­ods that indi­cates that your busi­ness devel­op­ment skills or processes may need to be devel­oped.  If you have not gen­er­ated many new clients through client refer­rals that is a sign that you need to upgrade your client rela­tion­ship processes.

The goal of these two steps is to dis­cover what is true about your busi­ness today.  Don’t look at your busi­ness with rose-colored glasses.  If you are unable to be com­pletely objec­tive, you should find a man­ager, friend or hire a coach to work with you on this review.

This objec­tive analy­sis of your past and cur­rent con­di­tion will lay the foun­da­tion for the plan for achieve­ment of your goals.

I enjoy hear­ing from peo­ple who read my arti­cles by phone, e-mail or text mes­sage.  I respond to all inquiries the same day.  If you have a prob­lem and would like to dis­cuss it with some­body, I would wel­come your call.  I enjoy help­ing peo­ple solve prob­lems and build more suc­cess­ful businesses.

Bob Simp­son

Direct Line:  905−502−0100

Toll Free:      866−646−6002

E-mail:  bob.simpson@synchronicity.ca

Text Mes­sage:  905−502−0100

Web­site:  www​.syn​chronic​ity​.ca

Join our Dis­cus­sion Group on LinkedIn:  www​.linkedin​.com/​g​r​o​u​p​s​/​A​d​v​i​s​o​r​-​C​o​l​l​a​b​o​r​a​t​i​o​n​-​4​2​4​8​7​2​5​/​a​b​out

Bio:  www​.syn​chronic​ity​.ca/​a​b​out

Copy­right © Syn­chronic­ity Per­for­mance Consulting

    Lat­est Advi­so­r­An­a­lyst Prac­tice Growth Sto­ries

Tags: 100 Million, Assets Under Management, Benchmarks, Bob Simpson, Current Position, Dr Johnson, Growth Curve, Key Concepts, Life Today, Minor Adjustments, Obje, Performance Consulting, Setting Goals, Smart Test, Spencer Johnson, Sustainable Growth, Synchronicity, Top Selling Books, Truth, Who Moved My Cheese
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Practice Essentials: Investment Management Focus Days

Monday, July 30th, 2012

by Bob Simp­son, Syn­chroncity Per­for­mance Consulting

One of the goals that you should pur­sue is to opti­mize the time you spend in client-facing activ­i­ties.  We define client-facing activ­i­ties as time spent man­ag­ing exist­ing (ideal) client rela­tion­ships or in busi­ness devel­op­ment activ­i­ties to attract new (ideal) clients to your business.

Some indus­try stud­ies report that advi­sors who spend in excess of 60% of their time in client-facing activ­i­ties earn three to five times the income of those who do not.  This study also reported that only about 9% of advi­sors spend in excess of 60% of their time in client-facing activity.

If you study the industry’s most suc­cess­ful advi­sors, you will find they have good processes and teams to allow them to focus on man­ag­ing their client rela­tion­ships and build­ing their per­sonal, busi­ness and client networks.

One of my fond mem­o­ries of being an advi­sor was when I was out of my office and was stopped by three advi­sors in the branch who wanted to talk.  My assis­tant Sheri got up from her desk, approached the group, grabbed me by my sleeve and pulled me back to my office.  I asked her what that was about and she told me “I get a per­cent­age of your rev­enue.  When you are talk­ing with other advi­sors, you are not talk­ing with clients and you are not mak­ing any money.  Get back to work!”

Invest­ment man­age­ment is one of the core sta­bi­liz­ers of your busi­ness, you need to man­age the process so you make good deci­sions and rec­om­men­da­tions.  At the same time you need to be effi­cient so that you do not take away time from client rela­tion­ship man­age­ment and busi­ness development.

Here is a process that I think you should con­sider:  Invest­ment Man­age­ment Focus Days.

I have writ­ten in pre­vi­ous arti­cles about the inabil­ity of humans to multi-task.  The brain is sim­ply not wired to do more than one thing at a time.  So, by allo­cat­ing time specif­i­cally for invest­ment research and report­ing, you will get more done in less time.

Even more impor­tantly, the process of devel­op­ing port­fo­lios and client reports will help you orga­nize your thoughts and help you pro­duce bet­ter client results.

If you are a reg­u­lar reader, you may have seen my arti­cle enti­tled “A Sim­ple Method to Improve Your Clients’ Invest­ment Per­for­mance”.  In this arti­cle, I dis­cussed a process called Purpose-Based Asset Man­age­ment.  You can read the arti­cle for a full expla­na­tion, but the con­cept is help­ing clients to iden­tify a series of “buck­ets” rep­re­sent­ing future uses of money, iden­ti­fy­ing how much money will be required in each “bucket” and esti­mat­ing a time­frame for each “bucket”.  Then port­fo­lios, invest­ment pol­icy and report­ing processes will be devel­oped for short, medium and long-term port­fo­lios, cor­re­spond­ing to the “buckets”.

On your first Invest­ment Man­age­ment Focus Day, you should develop a series of port­fo­lios for a vari­ety of time­frames and risk tol­er­ances.  You may want to develop port­fo­lios for tax­able and non-taxable accounts.  Your goal should be to develop port­fo­lios that are appro­pri­ate for 80% of the cases that you encounter.

You will be pre­sented from time-to-time with cases for which there is not a fit within your port­fo­lios.  In these cases, you should review each new port­fo­lio to assess whether it should become one of your model portfolios.

Once your port­fo­lios have been devel­oped, you should back test them to judge volatil­ity and per­for­mance against bench­marks.  Then, you should pack­age the port­fo­lios so they are in a client-ready for­mat.  I would sug­gest that you cre­ate elec­tronic (pdf) ver­sions so you can e-mail them.

The next step is to write a quar­terly invest­ment report in which you dis­cuss such things as:

• Per­for­mance for the past quarter
• Out­look for the next year

Keep it sim­ple.  I have been involved in the finan­cial ser­vices indus­try for over thirty years and still don’t under­stand some of the reports that are sent out to clients.  Write your own.  It helps you to orga­nize your thoughts.  You may strug­gle with the first cou­ple but once you get in a groove, it gets a lot easier.

To com­plete all this work ini­tially, you will prob­a­bly need more than one day, but it will take much less time to update your port­fo­lios that to build them the first time.

On the other hand, this process will save you hours of time.  Rather than devel­op­ing port­fo­lios from scratch, you can sim­ply pull your port­fo­lio reports from a shelf (or print them from your com­puter).  You may even cre­ate a pre­sen­ta­tion binder (hard copy or elec­tronic) to dis­cuss with clients.  Clients love being given choices, espe­cially when they are easy to understand.

Make sure to stay focused – your ulti­mate goal is to spend a sin­gle day per quar­ter on invest­ment port­fo­lio and report­ing so you can spend more than 60% of your time in client-facing activ­i­ties.  Pre-book these days a year in advance.  Arrange with whole­salers or other indi­vid­u­als with whom you would like to col­lab­o­rate to meet on your Invest­ment Man­age­ment Focus Days.

I real­ize that if you man­age your own port­fo­lios that it is vir­tu­ally impos­si­ble to do all the nec­es­sary work in one day per quar­ter.  It is dif­fi­cult to man­age invest­ments rather than work­ing with invest­ment man­agers and break through the 60% client-facing thresh­old.  Model port­fo­lios will def­i­nitely help your cause.

We are prepar­ing to launch a new ser­vice to help you man­age your invest­ment processes.  Should you decide to imple­ment a pro­gram, like the one above, we will help you nav­i­gate through set-up and your invest­ment processes and port­fo­lios.  Then, we can, at your option, meet with you on your quar­terly Invest­ment Man­age­ment Focus Days to dis­cuss your port­fo­lios and reporting.

You can par­tic­i­pate in our new pro­gram, Invest­ment Processes and Port­fo­lios, based on your needs, pref­er­ences and pri­or­i­ties.  A vari­ety of options are avail­able from pay-by-the-minute to pre-booked ses­sions of as lit­tle as 15-minutes.

We hold you account­able, chal­lenge you on your port­fo­lios and strate­gies and proof your report­ing.  You iden­tify your needs and we help you.

To dis­cuss how this pro­gram can help you build or man­age your invest­ment man­age­ment pro­gram,  please con­tact Bob Simp­son at 905−502−0100 or bob.simpson@synchronicity.ca.

Bob Simp­son

Direct Line:  905−502−0100

Toll Free:      866−646−6002

E-mail:  bob.simpson@synchronicity.ca

Text Mes­sage:  905−502−0100

Web­site:  www​.syn​chronic​ity​.ca

Join our Dis­cus­sion Group on LinkedIn:  www​.linkedin​.com/​g​r​o​u​p​s​/​A​d​v​i​s​o​r​-​C​o​l​l​a​b​o​r​a​t​i​o​n​-​4​2​4​8​7​2​5​/​a​b​out

Bio:  www​.syn​chronic​ity​.ca/​a​b​out

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Tags: Bob Simpson, Brain, Business Development Activities, Client Networks, Client Relationship Management, Client Relationships, Decisions, Desk, Focus Days, Fond Memories, Investment Management, Investment Research, Management Development, Management Focus, Money, Personal Business, Practice Essentials, Practice Management, Sheri, Stabilizers
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