2018 and beyond: Business planning, and questioning

As an adviser, you know 2017 has been dosed with Department of Labor hoopla, while it’s been simultaneously tamed by a bull market. Just imagine what next year might bring. Have you devised a plan for it yet?

Advisers frequently say they need to focus on the business, not just work in the business. That means that at this time of year advisers should be preparing their business plans for 2018 and beyond. Are you doing that right now? Oftentimes, phone calls and meetings take precedence over business planning. While advisers are technically planners, sometimes it’s easier to react than to be proactive.

QUESTION THYSELF

Advisers must think strategically to grow and thrive. Ask yourself these questions:

If you are an ensemble firm, how will you grow? How will you help advisers develop their skills? Will you develop marketing strategies to attract new clients? How will you recruit new advisers to the firm and train them?

If you are a solo firm, how will you thrive? Will you define a niche and specialize in it? Or will you generalize your practice and welcome all clients to drive volume?

Based on the way you answer the above questions, some goals may begin to emerge. Now ask yourself how you might achieve these goals. Will you:

Prune clients? Streamline services for each client’s needs? Increase or decrease fees? Shift to a 100% advisory business? Enhance the quality and sophistication of your financial plans?

Buy new or replacement technology to increase efficiency? Use social media? Outsource investment management? Quickly maximize compliance requirements?

Bring a family member into the business? Hire or fire employees or advisers in your business? Merge or split with partners?

Become an RIA, IAR, or something else? Simplify the business or become more sophisticated? Grow or shrink with a lifestyle practice? Decrease costs or invest in the business? Plan your retirement?

DIRECTION, NOT PERFECTION

You don’t need perfect clarity to devise a strategy or define a goal. What often impedes progress is the desire for perfection. Your answers to these questions may evolve over the years, some questions may require extra deliberation, and some answers may yield yet more questions. Don’t let any of these things stop you. The important thing is to get into an annual habit of creating a plan, defining your goals, and tracking your progress.

By establishing this planning process—and adhering to it—you will learn from your successes and failures. Inevitably, you will improve the way you plan. Business planning is only as good as its implementation and the consistent monitoring of it. Ongoing evaluation should continue throughout the year.

Some aspects of the planning process are more difficult than others are. For example, a vision statement takes time to crystallize. Finding the proper, powerful words to capture the essence of your organization shouldn’t impede you from writing a plan.

GETTING STARTED

An easy way to start is to look back at the prior year and evaluate it. If you had no written goals, it may be more difficult to identify successes, but you can assess your strengths and weaknesses. From there, you can identify the challenges—and the opportunities—facing your firm. Finally, based on the information you’ve gathered, you can begin to predict obstacles and devise a plan to navigate toward your goals.

Get moving forward by reflecting backward. Create your vision, or at least a first version of the vision, strategize about the next five years of the firm, and set measurable goals for the year ahead. Make business planning a yearlong process by reviewing your plan regularly, at least quarterly. Remember, it’s not really a business plan until it’s in writing. The monitoring process will carry you throughout the year—until it’s time to reassess and devise a new plan for 2019.

Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network.