What do Financial Advisors Want?

Wednesday, January 25th, 2012

Every Finan­cial Advi­sor {FA} wants to answer three questions:

1. What role do I play in my prac­tice?
2. How big do I want to become?
3. What is the req­ui­site {required} orga­ni­za­tion {RO} to enable me to answer ques­tions 1 and 2?

Most FAs get paid for results. Their com­pen­sa­tion is tied to the sale of prod­ucts such as invest­ments, insur­ance, mort­gages, sav­ings, loans etc or the sale of advice. Peo­ple tend to think of the FA role as a sales func­tion. Yet, the tasks an FA is required to per­form are much more com­plex than sim­ply sell­ing. Today, the vast major­ity of FAs are entre­pre­neurs who have cho­sen to work in finan­cial ser­vices. They are build­ing a busi­ness. There are two prin­ci­ples that deter­mine how big and sus­tain­able that busi­ness will become:

1. Opti­miza­tion
2. Leverage.

Opti­miza­tion is defined as the abil­ity to work at the high­est level of your capa­bil­ity. Lever­age is the abil­ity to employ peo­ple, cap­i­tal and tech­nol­ogy to enhance your effec­tive­ness. Let me give you an exam­ple. I coach an advi­sor who came to the US in the early 80s. As a new immi­grant, he had dif­fi­culty find­ing work. After a year, he became a life insur­ance agent col­lect­ing pre­mi­ums on a debit. His goal was to earn $100.00 a day. He sold life insur­ance to lower income fam­i­lies liv­ing in a poor area of his city. Today, he has a team of eight peo­ple, includ­ing a CPA and attor­ney. He has 1,000 clients, of which the top 100 have aver­age net investable assets of $10,000,000.00+. Today, his goal is to earn $10,000.00 a day. He has increased the value of his time from $10.00 an hour to $1,250.00 an hour. In addi­tion, he is build­ing a busi­ness where other peo­ple con­tribute to the growth in rev­enue and prof­itabil­ity. Twenty years ago, his goal was to earn a six fig­ure income. Today, it is to build an eight fig­ure busi­ness. To achieve his goal, he has mas­tered the art and sci­ence of build­ing a business.

FAs who only want to sell and make as much money as pos­si­ble need to become part of an orga­ni­za­tion that facil­i­tates the expres­sion of the unique abil­ity to sell. FAs who want to build their own busi­ness have to mas­ter the art and sci­ence of build­ing a busi­ness or find part­ners who bring com­ple­men­tary capa­bil­i­ties and moti­va­tion to build the busi­ness together.

Norm Trainor is the Founder and CEO of The Covenant Group, a com­pany that spe­cial­izes in edu­cat­ing and coach­ing finan­cial advi­sors and entre­pre­neurs and pro­vid­ing them with busi­ness tools to enhance their per­for­mance. He can be reached at norm@covenantgroup.com or 1−877−903−3878 X333.

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Tags: 80s, Art And Science, Capability, Cpa, Financial Advisors, Financial Services, Immigrant, Income Families, Insurance Mortgages, Investable Assets, Investments, Leverage, Life Insurance Agent, Loans, Norm Trainor, Optimization, Organi, Premiums, Profitability, Six Figure Income, Twenty Years
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Delegating Functions, Not Just Tasks

Wednesday, August 3rd, 2011

As a finan­cial advi­sor, your abil­ity to grow is largely depen­dent on the amount of time you’re able to spend devel­op­ing rela­tion­ships. The key is to del­e­gate most of the tasks related to an advi­sory prac­tice to oth­ers, so that you are able to devote your time to attract­ing and retain­ing clients.

There are three man­age­ment strate­gies when del­e­gat­ing tasks that allow you max­i­mum your time with clients and poten­tial clients:

1. Opti­miza­tion ver­sus maximization
2. Del­e­gate Functions
3. Assign Tasks by address­ing Con­text, Pur­pose, Quan­tity, Qual­ity, Time and Resources (CP – QQT/R)

In this arti­cle, we will look at the sec­ond of these strate­gies, Del­e­gate Func­tions, in more detail.

When try­ing to man­age their work­load, many finan­cial advi­sors del­e­gate tasks directly to employ­ees or sub-advisors. For exam­ple they may del­e­gate the writ­ing of let­ters or fil­ing to an admin­is­tra­tive assis­tant, or send junior advi­sors out on indi­vid­ual calls. Every day, they will assign dif­fer­ent tasks to their employees.

If you del­e­gate tasks, you will still find your­self fol­low­ing up on the progress of the task—and it will still require you to take time away from your own core respon­si­bil­i­ties. Instead, as a busi­ness grows, finan­cial advi­sors must learn to del­e­gate functions.

A func­tion within a busi­ness is a group of tasks. Some peo­ple think of it as a bucket con­tain­ing com­mon tasks. In many com­pa­nies a func­tion is typ­i­cally thought of as a depart­ment, for exam­ple, mar­ket­ing, account­ing, IT, or sales.

As your busi­ness grows and you hire more staff, it will be pos­si­ble iden­tify the func­tions within your busi­ness and make peo­ple respon­si­ble for those functions.

Instead of assign­ing tasks to some­one who does your mar­ket­ing, you may find it more effi­cient to assign the mar­ket­ing func­tion to them. The func­tion may con­sist of 4 to 8 key respon­si­bil­i­ties such as:

• Cre­at­ing and imple­ment­ing 6–8 robust mar­ket­ing strategies
• Keep­ing the bud­get below 10% of revenue
• Man­ag­ing the Pipeline and com­mu­ni­cat­ing with clients and your network
• Devel­op­ing strate­gic part­ner relationships

The more func­tions that are assigned the clearer everyone’s role will be, the more effi­ciently they will be able work, and the more own­er­ship they will take for get­ting things done. It will also free you up to con­cen­trate on the most impor­tant aspects of your own role.

As the finan­cial ser­vices indus­try places more and more respon­si­bil­ity on the advi­sor, suc­cess depends increas­ingly on the advisor’s abil­ity to build a business.

Del­e­gat­ing func­tions enables you to focus on what you do best and most enjoy. You will reap greater rewards and expe­ri­ence more satisfaction.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

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Tags: Administrative Assistant, Amount Of Time, Budget, Common Tasks, Commu, Core Responsibilities, Delegate Functions, Delegate Tasks, Financial Advisors, Junior Advisors, Management Strategies, Marketing Function, Marketing Strategies, Norm Trainor, Optimization, Pipeline, Quality Time, Relationships
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How to Delegate Tasks

Tuesday, April 26th, 2011

As a finan­cial advi­sor, your abil­ity to grow is largely depen­dent on the amount of time you are able to spend devel­op­ing rela­tion­ships. The key is to del­e­gate most of the tasks related to an advi­sory prac­tice to oth­ers, so that you are able to devote your time to attract­ing and retain­ing clients.

There are three man­age­ment strate­gies when del­e­gat­ing tasks that allow you max­i­mum your time with clients and poten­tial clients:

1.         Opti­miza­tion ver­sus maximization

2.         Del­e­gate Functions

3.         Assign Tasks by address­ing Con­text, Pur­pose, Quan­tity, Qual­ity, Time and Resources (CP — QQT & R)

In this arti­cle, we will look at the third of these strate­gies: Assign Tasks by address­ing Con­text, Pur­pose, Quan­tity, Qual­ity time and Resources {CP – QQT & R}l.

On any given day, as a finan­cial advi­sor, you can per­form tasks that are worth $20–30/hour, up to $500–1,000/hour. The key to effec­tive­ness is to focus on your high­est value tasks. Del­e­gat­ing lower value tasks cre­ates oper­a­tional lever­age when the finan­cial advi­sor is freed up to focus on client build­ing tasks that enhance con­tri­bu­tion to rev­enue and the value of the business.

When del­e­gat­ing, it is impor­tant that you assign tasks with clear duties and objec­tives, and tasks that your peo­ple are capa­ble of com­plet­ing. For instance, ask­ing your admin­is­tra­tive assis­tant to close a big sale is prob­a­bly not going to get you the results you are look­ing for.

Effec­tive del­e­ga­tion involves a six step process:

Con­text

By def­i­n­i­tion, con­text addresses how every­thing ties together. When you assign a task, you start by describ­ing how it relates to other tasks and fits into your over­all objectives

Pur­pose

You describe why this task is impor­tant and what you want to accomplish.

Quan­tity

The focus of quan­tity is how much, of what and by when.

How many clients are you assign­ing to that per­son? Be clear about your expec­ta­tions as to who and what you are del­e­gat­ing. Remem­ber to con­sider if the per­son has the orga­ni­za­tional capa­bil­i­ties to han­dle the task.

How large an account is it? Review what you want done and how you want it done. Deter­mine if per­son has the exper­tise to pro­vide the level of ser­vice required.

How many dol­lars? Be sure that the per­son to whom you are del­e­gat­ing under­stands what kind of finan­cial impact this will have on your busi­ness. Con­sider if the per­son is com­fort­able deal­ing with large sums.

Qual­ity

While quan­ti­ta­tive stan­dards are objec­tive, qual­i­ta­tive mea­sures are more subjective.

Qual­ity stan­dards—Review and make sure the per­son under­stands what needs to be done and to what stan­dards. Every­one has their own inter­pre­ta­tion of a “good” or “thor­ough” job. Make sure you com­mu­ni­cate what exactly it is that you expect.

Com­pa­ra­bles—To avoid con­fu­sion or mis­in­ter­pre­ta­tion, it is a good idea to give the per­son exam­ples of other work that reflects your expec­ta­tions.  This will act as a guide­line for any new work being done.

Out­comes—Make sure the per­son knows what your expec­ta­tions are. That way, they will have a greater chance of car­ry­ing out the task suc­cess­fully if they know what the desired end result is.

Time

The time you intend it to be done by—If you want a task com­pleted on time, set time­lines! Make sure your per­son knows how long they have to fin­ish the task so they can orga­nize their own time accordingly.

Mon­i­tor­ing time—If you want to peri­od­i­cally check in on the progress of the task, set it out in a time sched­ule. If you want cer­tain mile­stones achieved by cer­tain interim dead­lines, com­mu­ni­cate the time expectation.

Resources

When del­e­gat­ing tasks, make sure you setup peo­ple for suc­cess, not fail­ure, by mak­ing sure they have the resources to com­plete the task:

Bud­get—Do they have enough money to cover any costs that may crop up?

Time—Have you set rea­son­able dead­lines for the com­ple­tion of the task, espe­cially in con­sid­er­a­tion of their other responsibilities?

Equip­ment—Do they have access to the right tech­nol­ogy or office equipment?

The help of oth­ers—Do they have access to other per­son­nel that they can go to for opin­ions or to ask questions?

Sum­mary

Effec­tive del­e­ga­tion of tasks enables your peo­ple to demon­strate their com­pe­tence and work inde­pen­dently. In turn, it allows you to focus on your high­est value tasks.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

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Tags: Addresses, Administrative Assistant, Amount Of Time, Amp, Delegate Functions, Effective Delegation, Focus, Leverage, Management Strategies, Norm Trainor, Optimization, People, Quality Time, Relationships, Six Step, Ties
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The Second Principle of Entrepreneurship — Leverage

Thursday, December 30th, 2010

The first prin­ci­ple of entre­pre­neur­ship is Opti­miza­tion i.e. always work­ing at the high­est level of your capa­bil­i­ties. For some entre­pre­neurs, the obsta­cle to opti­miz­ing is a mind­set – a mind­set that has them play­ing what I call the Finite Game. It is a belief that they have to do every­thing them­selves and that they can­not depend upon oth­ers. Many entre­pre­neurs with this mind­set oper­ate as a busi­ness of one. Run­ning a busi­ness involves many tasks. Some of these tasks are worth $15 an hour, whereas a few are worth hun­dreds or thou­sands of dol­lars per hour. As an exam­ple, the value of a finan­cial advisor’s time work­ing with clients can be worth hun­dreds of dol­lars per hour, while time spent doing admin­is­tra­tive and cler­i­cal activ­i­ties is worth $15 to $25 per hour. As a busi­ness of one, it is very dif­fi­cult to optimize.

Recently, a suc­cess­ful finan­cial advi­sor and friend of mine began work­ing with me. He is 60 and wants to retire in five years. He is earn­ing about $200,000 per year and works by him­self. His prob­lem is that in order to main­tain his lifestyle and pre­pare for retire­ment, he needs to grow his rev­enue to $500,000. To increase his rev­enue by 250%, he needs to play The Infi­nite Game. The key to play­ing The Infi­nite Game is to employ the sec­ond prin­ci­ple of entre­pren­reur­ship – Lever­age. The Oxford dic­tio­nary defines lever­age as “1. action or power of a lever. 2. the power to accom­plish a pur­pose.” Archimedes said, “Give me a lever long enough and I will move the world.”

To play The Infi­nite Game, you adopt a mind­set of abun­dance. It is no longer about get­ting a big­ger piece of the pie. The goal is to cre­ate a big­ger pie. The way to do this is to work with and through other peo­ple and uti­lize resources. When my client and friend began to employ lever­age by har­ness­ing the time, energy, cre­ativ­ity and intel­li­gence of oth­ers, he changed his work and his life. The start­ing point was to con­tact a local com­mu­nity col­lege and hire an intern to work with him for a four month co-op term. She was able to han­dle all of the lower value tasks and sched­ule his appoint­ments. This allowed him to invest more time work­ing with clients and prospec­tive clients. The next step was to uti­lize out­side resources to increase the depth and breadth of his prod­uct and ser­vice offerings.

For­tu­nately, he deals pri­mar­ily with afflu­ent and ultra-affluent clients, many of whom are pre-retirees and retirees. A recent study high­lights the fact that three out of four peo­ple change advi­sors within the first year after they retire. Armed with this knowl­edge, he has become much more con­scious of the need to assist exist­ing clients in the tran­si­tion to retire­ment and to obtain intro­duc­tions, rec­om­men­da­tions and refer­rals to peo­ple who are about to retire or have recently retired. Until recently, he spe­cial­ized in pro­vid­ing invest­ment advice. Now, he incor­po­rates life, finan­cial and estate plan­ning into his work with clients. He uti­lizes insur­ance, finan­cial and estate plan­ning resources to pro­duce much more rev­enue per client. In addi­tion, his clients and cen­tres of influ­ence are more will­ing to intro­duce him because they value his ser­vice to a greater extent. He has made him­self referable.

By chang­ing the game, he has dou­bled his gross income in the last year and of equal impor­tance, his net income has also dou­bled. In addi­tion, he no longer feels alone. He has spread the weight of car­ry­ing his busi­ness by shar­ing the load with oth­ers. He feels revi­tal­ized and much less at risk. Yet, all it took was a change in mind­set and two sim­ple steps of hir­ing an intern and reach­ing out to work with col­lat­eral professionals.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

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Tags: Abundance, Archimedes, Belief That, Clerical Activities, Creativity, Finite Game, First Principle, Infinite Game, Leverage, Local Community College, Mindset, Norm Trainor, Obstacle, Optimization, Oxford Dictionary, Piece Of The Pie, Running A Business, Thousands Of Dollars, Time Energy, Working With Clients, Worth Hundreds
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The First Principle of Entrepreneurship

Wednesday, December 15th, 2010

Entre­pre­neurs want to make a dif­fer­ence in the world. How­ever, there is a fun­da­men­tal dis­tinc­tion in the way in which entre­pre­neurs oper­ate. That dis­tinc­tion is grounded in the dif­fer­ence between profit and not-for-profit enter­prises. With a not-for-profit, the objec­tive is to max­i­mize the ben­e­fit to all con­stituents. If we started a char­ity to find a cure for can­cer, we would be work­ing to max­i­mize the ben­e­fit to all of those peo­ple affected by cancer.

The largest not-for-profit asso­ci­a­tion is the gov­ern­ment. Its pur­pose is to max­i­mize the ben­e­fit to all of the gov­erned. Some­times, when the poli­cies of the gov­ern­ment serve the gen­eral inter­est, but not our indi­vid­ual inter­ests, we get upset.

In busi­ness, how­ever, the objec­tive is to opti­mize. Not all clients or cus­tomers are equal. Profit is the key dri­ver that sus­tains the enter­prise. Max­i­miz­ing the ben­e­fit to every­one is a sure way to under­mine profitability.

Wal-Mart’s dif­fer­en­ti­a­tion is the low­est price. Every­thing they do is designed to drive down costs and deliver the low­est price to con­sumers. Neiman Mar­cus caters to the afflu­ent and ultra-affluent. Their moniker “Need­less Markup” empha­sizes the fact that low­est price is not part of their value proposition.

Both Wal-Mart and Neiman Mar­cus opti­mize in serv­ing their cus­tomers, but their value propo­si­tions are quite distinct.

The Oxford dic­tio­nary defines opti­miza­tion as ”make the best or most effec­tive use of”. Entre­pre­neurs are always look­ing for the best or most effec­tive use of a prod­uct or ser­vice to cre­ate value. In busi­ness, rewards are given to those who opti­mize i.e. find the best or most effec­tive use.

The start­ing point for opti­miza­tion is for entre­pre­neurs to always work at the high­est level of their capa­bil­i­ties. In fact, the great­est oppor­tu­nity lies in mak­ing the best or most effec­tive use of their unique abil­i­ties or talents.

Peo­ple often choose to become finan­cial advi­sors because they have a unique abil­ity to build rela­tion­ships with their clients built on trust. Yet, too often, as their prac­tice grows, they end up spend­ing less time build­ing rela­tion­ships with clients and high-quality prospec­tive clients. The com­plex­i­ties of run­ning a busi­ness get in the way of express­ing their unique abil­ity. To opti­mize, they must learn to mas­ter the var­i­ous aspects of build­ing a busi­ness, while express­ing their unique ability.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

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Tags: Business Rewards, Charity, Constituents, Cure For Cancer, Differentiation, Financial Advisors, First Principle, Fundamental Distinction, Moniker, Needless Markup, Neiman Marcus, Norm Trainor, Objective, Optimization, Oxford Dictionary, Profit Association, Profitability, Talents, Value Proposition, Value Propositions, Wal Mart
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