Wake-up call

(January 2005) As a financial advisor, you work hard every day to grow your business, take care of your employees and do well by your clients. But is all that work paying off? Are you satisfied with your income? Are you happy with your level of success?

Unfortunately, if you’re like many advisors, the answer is probably no. Last year, my firm conducted an indepth study of financial advisors across Canada. We talked about a broad range of topics, from the services they offer to how they market to prospects and their beliefs about the future of the business.

One of the things we uncovered was a distinct undercurrent of dissatisfaction among many advisors. As the chart shows, nearly half rate themselves as not very satisfied with their current level of success. And only a bit more than 12% call themselves very satisfied with the success they’ve achieved.

579 financial advisors surveyed. Source: CEG Worldwide.

Why the dissatisfaction? One reason is many have not reached the income levels they’d hoped for. Our research found only one of five advisors (just under 20%) is earning more than $200,000 in net income each year. Slightly less than half are earning between $100,000 and $200,000. And despite all the work and risk that goes with being an advisor, slightly more than one-third still earn less than $100,000 per year.

It doesn’t have to be this way. Despite increased competition, a challenging market and a complex regulatory environment, I believe these are the best of times for financial advisors. There are now more opportunities and better strategies to attract and serve wealthy clients. The advisors who are taking advantage of these opportunities are building highly satisfying—and highly profitable—businesses.

But these opportunities won’t simply walk in the front door. Many advisors have become content with the belief that if they stay in business and grow their client list, they will see their incomes rise and achieve the success they want. And that’s a mistake.

In fact, our research shows this conventional wisdom actually is an excellent formula for not making a particularly good living. Longevity alone didn’t help the 33% of advisors we surveyed who had been in business for more than 10 years but were still earning less than $100,000 per year.

So if time and experience don’t guarantee success, what does?

We found the industry’s elite advisors take a different approach. They question old assumptions and adopt new strategies in response to shifting conditions. Fortunately, these highly successful advisors leave plenty of clues—which our research unearths—about what drives their success. Taken together, these clues provide a roadmap that all advisors can follow to grow their businesses, increase their incomes and better serve their clients.

All of the hard work in the world won’t make a difference, unless you’re working in the specific ways that will lead to substantial success. In future columns, I’ll explore precisely those strategies. We’ll look at the best practices of the most successful advisors in Canada and around the world. By implementing these best practices in your own firms, you’ll achieve the success you so richly deserve.

John J. Bowen Jr. is founder and CEO of CEG Worldwide, a U.S.-based global training, research and consulting firm.

27/01/05