How to build a million-dollar practice

The importance of a client acquisition and effective delegation cannot be overstated, no matter how successful an advisor’s business becomes.

One of the key characteristics of successful business people is that they have a strong focus on client acquisition, said Art Schooley, president and coach at The Personal Coach, a Waterloo-based firm that offers customized business coaching for financial advisors.

“People in our business have forgotten about what got them to the party,” he said speaking at the recent 2011 Toronto Fall Summit organized by the Independent Financial Brokers of Canada (IFB). “They built successful businesses, but stopped acquiring new clients. That’s not a good situation because we all know clients are going to leave, die off, move; [all of which] puts you in a dying business.”

Advisors also need to adapt to changing client needs and business environment to succeed, said Kim Poulin, coach at The Personal Coach. “[Clients] are more knowledgeable, less trusting in this day and age,” she said. “The economy is changing all the time, you don’t know when you wake up in the morning if the stock market is going to be up or down; world events are having much more impact on our clients and, therefore, on our lives.”

Financial services have changed a great deal over the years. “The real question is how advisors and their team have changed to take advantage of the current situation,” said Poulin.

The advice business is a team game. Advisors who don’t fully involve their team in day-to-day business are trying to put together a puzzle without seeing the big picture, she said.

“One of the key things [about business growth] is building and expanding your team where each person has a unique ability that is separate from yours and that allows you to focus on your own.”

Do what you do best and delegate the rest, said Schooley who says advisors are either finders or grinders.

“Those people involved in a lot of grinding don’t tend to move their business forward and lose a lot of energy; finders are on top of their game, liking their business and are clearly doing well.”

Schooley uses an 80-20 equation to gauge advisors’ earning potential. Advisors can’t be “spending 80% of their time doing a $20 an hour job” and must ensure they are devoting “20% of their time doing $200 an hour jobs.”

The time the advisor spends on the $20 an hour job, the more it affects their income, he added. His mantra is simple: an advisor should only do what only they can do and make sure the rest of the team understands that.

Advisors who are spending less than 60% of their time in front of their clients and prospects are not likely to go far, he said.

“Things that drain your energy as advisor, get rid of them, delegate them” so long as they don’t include “providing advice to your clients.”

Finally, having a financial strategy can be very rewarding for an advisor’s business. “All those people who’ve been successful in their businesses have solid financial strategies; they know their ratios and they typically split out their revenue stream between what’s coming in from existing clients and what’s coming in from new clients,” said Schooley. “When you have that kind of data—they call them the dashboard numbers—it really helps you to manage your business.”