I’ve recently had the opportunity to visit with investment advisors overseas – in France, Australia and New Zealand. Those meetings have helped to confirm for me what I’ve seen for some time in the United States – there is a specific set of attributes that winning investment advisors share.
- They have teams that create value.
Sometimes we think of the investment advisor as the solitary source of counsel and wisdom for clients. But that’s simply not true – any winning advisor needs a strong team. How is such a team built? With three key features:
- Clear business goals and expectations
- Strong processes
- Multi-generational points of view
I call out multi-generational for two reasons. One, because the investment advisor profession as a whole is going a bit grey while serving a large population of baby boomers who are themselves entering retirement. Two, we have new generations of investors coming up, such as the recession-scarred millennials. Reaching both audiences is extremely important to the future longevity of investment firms. My colleague, Sam Ushio, elaborates on building a strong team in this recent post on the Helping Advisors Blog.
2. They are vigilant in providing measurement as a way to show progress.
Consistent measurement is central to understanding what is working and is not. Identifying a metric that measures a firm’s success and what success means to that team, and sticking to it, is crucial. No metric is perfect, but it is important to have consistency in measuring progress.
But advisors should be generous with those that are committed and contribute to team goals. Generosity can be financial, but can also include other benefits – scheduling flexibility or subsidized education, for example. The advisor and his or her clients will be rewarded with team loyalty, providing more consistent service and value for the long haul.
3. They’re experts on the local economy.
It is one thing to be connected to your community. But it’s another to have an intimate understanding of how wealth moves in your local economy. A winning advisor understands not only the owners of local wealth, but also the service providers and stakeholders associated with the flow of this wealth.
For example, if one of the largest businesses in your community is a commercial construction company, there are multiple businesses associated with the firm’s success:
- The architecture firm that creates their building plans
- The bank that loans money for construction
- The commercial real estate agency that sells building space
- And more…
To act on this information, successful advisors need to be a genuine part of their communities and build legitimate relationships with its centers of influence.
4. They’re greedy with clients’ time.
What I mean by this is that a winning advisor knows the importance of really following through with clients. They avoid low-impact or low-value activities. This can be easy to say. To really make it happen, advisors need to invest time finding ways to systematize or outsource background tasks that suck up a lot of time.
This can allow advisors to add value in the places it really counts: time understanding a client’s goals and needs. Then find ways to articulate this value to clients to make sure they know what special value they receive. They also need to build trust that helps deliver better outcomes, as Sandy Cavanaugh recently wrote.
As I’ll write in a future post, a lot is changing in the world of advisors. But some things stay the same, such as these four building blocks that can help to build a successful practice.
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