A numbers-based approach to bringing in more client assets

Upon ringing in the New Year, successful advisers set their sights on new goals, many of which focus on bringing in new assets. What’s your goal? Are you trying to bring in $10 million, $20 million, or even $30 million in new assets?
As much fun as it is to sit and daydream about how your life would be different with all those new assets under management, it requires work to get there. And you’ll never achieve your goal without a clear actionable plan that shows you exactly what you need to do each and every week of the year.
This is not as scary as it sounds. Once you reverse-engineer your goal, you’re going to immediately feel empowered. And your goal will feel reachable, attainable and achievable.
(Related read: What to do if your 2015 goals start slipping away)
For the purposes of this exercise, we’re going to assume your goal is to bring in $20 million in new assets by the end of 2015. How are you going to do that? First, you’re going to crunch some numbers to find the answers to two critical questions.
Critical Question #1: What is your average case size?
Start by pulling a list of all of your new cases over the most recent six-month period. To make sure your calculation is accurate, skip the previous six weeks so you only measure appointments that have had the opportunity to go through the complete sales cycle.
Example: If it’s Jan. 1, you’d look back to Nov. 15, then look at the six-month period from May 15 through Nov. 15.
Another important note: If you brought in two new accounts, one for a husband and one for a wife, that is only one sale total — or one “buying unit.” The two accounts added together represents the case size.
Next, divide the total assets you brought in during that six-month period by the number of “buying units” it represents. This will give you the average case size per family.
Critical Question #2: What is your closing ratio?
To calculate this number, you want to identify how many first appointments you’ve had during that same six-month period you used above.
After you’ve completed this step, cross-check your list of first appointments with the list of new accounts. This will tell you your closing ratio (number of new accounts divided by the number of first appointments times 100 equals closing ratio).
You now have two critical numbers: your average case size and your closing ratio. We can now use these two numbers to reverse-engineer exactly what you need to do to reach your new asset goal.
Let’s say, for example, that your average case size is $250,000 and you have a 20% closing ratio.
How many new clients do you need to hit your $20 million goal? It’s simple math now. Just divide $20 million by $250,000. The answer? You need 80 new clients during the next 12 months to bring in $20 million in new assets.
It’s good that we know this, but we still need to be more specific. Now you need to determine how many people you need to see to close 80 new clients. Simply take the number of new clients divided by your closing ratio. In this case, you’d need to see 400 qualified prospects during the year to hit your goal (80/0.20 = 400).
Are we there yet?
Almost. We still need to get just a little bit more specific. We need to break this down into a manageable weekly target for you to focus on.
How many weeks do you work per year? Let’s assume you take two weeks of vacation a year and work 50 of them. So if you work 50 weeks a year, you need to see eight new people a week (400 prospects/50 weeks = 8 prospects a week) to hit your goal of bringing in $20 million in new assets in the next 12 months.
What does this really mean in terms of hitting your goal for the year?
Simply this: If you have a week where you only have four first appointments, you need to make it up by setting 12 first appointments the following week. Otherwise, you won’t be on track to hit your goal.
Goals don’t happen by themselves. They only happen if you’re committed to achieving them and you do the work necessary to achieve them. And in this case, hitting your goal for the year is all about how many first appointments you have each week.
If your goal is just “$20 million in new assets this year,” it will be tough to get there. The number is too big and too far out.
But by reverse-engineering your goal into a specific weekly target, you now have clarity about the things you need to be doing every single week to make your goal a reality.
Shawn Sparks is vice president of marketing at Advisors Excel, and shares weekly success tips for advisers at 52 Sparks.