Advisers’ biggest mistake: Not running the business like a business

When clients used to call adviser Christopher Van Slyke’s office with questions about their portfolios, it would take him almost an entire day to find the paperwork before he could even answer their questions.

Mr. Van Slyke, a partner at Trovena LLC, which manages $400 million in assets, concedes that he was running his business by the seat of his pants.

“I had this lucrative nightmare of a business,” he recalled. “I started making really good money, but I was waking up in a cold sweat at night.”

Eventually, Mr. Van Slyke came to the realization that he had created an “idiosyncratic, unsystematic, unsalable” business.

“I had to re-engineer the company,” he said.

So the Trovena partner made some big changes. First, he purchased a customer relationship management system. The software allowed him to facilitate the tracking of clients’ accounts and notes, and gave him reminders about setting up meetings with clients.

It made a huge difference. When he first started his business, Mr. Van Slyke relied on his memory to keep track of how much money clients had and in which accounts. “I had to send staff into the archives and figure out how much money clients had in their accounts and see what their estate plan looked like,” he said. “It was very frustrating.”

With the new software program, Mr. Van Slyke was also able to analyze his clients better.
He soon discovered that he was spending too much time with all of his clients, including those with fewer assets. He realized he needed to segment clients.

So he split the company in two. Trovena targets clients’ whose net worth is $5 million or more. Those clients get specific help with tax planning, asset protection, estate planning and charitable giving. The other company, Oncubic LLC, which has $100 million in assets, is aimed at clients with less in assets.

By separating the two groups of clients, Mr. Van Slyke said he’s now spending more time with his clients who have higher net worth and who need more-customized services.

“Our solution was systemizing the business,” he said. “If you don’t want to get rid of one type of client, then you have to create two brands.”

Shop Talk is a regular column detailing how financial advisers run their businesses. The column focuses on unusual or innovative ways to attract more clients. Suggestions or tips for Shop Talk? E-mail Lisa Shidler at [email protected] or visit the Shop Talk page at InvestmentNews/shoptalk.