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Practice Makeover: Season 1

Practice Makeover: Episode 2

February 20, 2014 @ 7:27 pm

Runtime: 11:30

In episode two of InvestmentNews’ “Practice Makeover”, expert adviser coaches brainstorm and form an action plan for makeover recipient Trent Bradshaw to help solve his firm’s numerous time management problems.

The Renovation Room

Industry experts and executives offer strategies, tips and ideas on how practices can improve their business.

Ray Sclafani

Ray Sclafani

Founder and CEO of ClientWise LLC

Robert Sofia’s conversation with Thomas and Robert Fross provides some powerful insight into what they correctly refer to as an investment in human capital. This comparison should resonate with advisers who pour hours into investment planning for their clients. As a team leader, the analysis and assessment of who they invest in to include on their team should require just as much effort. Once advisers have invested in building their teams, they must have active faith in the investment decisions they’ve made. As Thomas Fross so accurately points out, they made the mistake of introducing an adviser on their team as a “junior advisor” early on, which resulted in not “building him up enough in the eye of the client.” Thomas’ point about getting the client as excited as he was about the involvement of a second, rather than a lesser, adviser would have demonstrated much more faith in his decision to invest in that team member. Many of the firms we work with will call the experienced financial adviser a “Senior Lead Advisor” and the less experienced advisor a “Lead Advisor”, and refer to their service professionals as “Service Advisors” and their support staff as “Client Relationship Managers”. These titles express a level of talent and experience in keeping with how the team and its members want to be viewed.

Frank Maselli

Frank Maselli

Founder of The Financial Lifeguard Academy and The Maselli Group

There are several layers to Trent's case. He certainly needs better trained support people to whom he can feel comfortable delegating. 370 clients and $100 million in AUM isn't an overwhelming problem. With proper systems and processes, three skilled people should be able to handle that load. But it's clear that he is taking too much on himself.

Trent's apparent need for control and micromanagement could be a lack of confidence in his people, or it could be a symptom of a deeper issue. Sometimes it's easier to focus on the daily minutia of client account management rather than do the hard work needed to grow and solidify your business.

If he's serious about raising $50 million in new AUM or migrating his practice to higher-net-worth clients, he needs to streamline his existing business model and build a comprehensive prospecting and referral plan. For example, when he was asked, "Where's the money in your town?" his answer was "There's money everywhere." That's adviser-speak for "I have no coherent marketing strategy. I just take whatever falls into my lap."

Step 1 is to do a team evaluation to identify everyone's deepest strengths and most successful behaviors. This will also tell him specifically what kind of person he might need for additional staff.

Step 2 is to segment the client base and begin to differentiate the service level he provides to his A, B & C clients.

Step 3 is to step back and take a serious look at why they're both doing so much work…and maybe begin to transition his wife out of the practice.

Often when spouses work together, it becomes difficult to leave the job at the office. You're always talking and thinking about the business. Together they may want to set clearer boundaries between focused work time and family downtime. The lines may be too blurred for anyone to ever relax and put life in proper perspective.

April J. Rudin

April J. Rudin

President of the Rudin Group

Advisers often make the mistake of choosing other advisers who have changed careers as their coaches or consultants. This is totally insular and doesn’t allow for change or growth.

When the Fross Brothers claimed that “they made many of the same mistakes,” it demonstrated once again to me that the industry needs to seek outside advice on how to run a small business. That is what Trent needs help with. I am guessing that he has no business plan nor marketing plan.
While the Fross Brothers may be successful advisors and business consultants for some, their solutions to Trent’s problems and others may be limited to their own experience. I find that when financial advisers speak with other advisers, they reinforce existing myths like “if I want it done right, I must do it myself.” This mindset cannot allow a small business to grow. Trent needs to learn what he is best at and “stay in his lane” so I suggest that Trent have the personality profile completed so that he can be placed first into his organizational structure. Perhaps he is detail-oriented and should be functioning as the chief investment officer. It sounds like that to me. He might best served being the inside operations guy, and hiring someone to do business development and outside relationships with centers of influence, etc. Most advisers are more comfortable with inside quant tasks than outside relationships and business development.

While I definitely agree with their suggestion of segmenting the clients, Trent needs to see how profitable each segment is and have the proper staffing in place before he attends any social events, charity events, etc. He cannot onboard any new clients until he decides how, and who to service from his existing bases. I thought Trent was trying to improve his quality of life and spend time with his family?

As I said before, Trent needs to “fire” clients—and the only way he will know who is by segmenting and then cutting off the unprofitable accounts or hiring someone who is junior to manage smaller accounts if they are even profitable to keep. Hiring someone junior to manage small accounts makes sense. Hiring someone to do outside business development might make sense too. But without knowing what Trent’s strengths are, who his target (and most profitable) clients are, he should not make any hiring decisions.

He needs to think of staff as part of his business model and essential for future growth. It should not be a “hard step for advisers” nor should he think of it as an investment or, worse, as a cost and look for ROI. Instead, Trent should be thrilled that his growing business requires more hands and different skills sets. He needs an organizational chart and job descriptions. He needs to meet with his own CPA to determine his budgets for hiring, events, etc. This should be the cornerstone of his 2014 plan.

Mark Matson

Mark Matson

CEO of Matson Money

Quality of life should be a huge concern for Mr. Bradshaw. There comes a time in every planning practice where growth is stymied by time. Not only do personal relationships suffer, but client relationships suffer as well. Segmenting clients would be a huge mistake. The solution is coaching and escaping a traditional one-on-one planning model. Not only is it rewarding to inspire others through coaching but once the investor has experienced a new capability to experience life and money as abundant, then they become leaders and share that with other people in their community. Segmenting clients definitely does not truly empower them to share that experience with others. You grow your business through coaching in groups which creates leverage and improves quality of life.

Kelly LaPalio

Kelly LaPalio

Vice President of National Accounts, FocusPoint Solutions

As an adviser and business owner who is seeking better work/life balance, Trent can no longer maintain the workload he’s established for himself. At the same time, the Fross brothers have discovered that Trent has had employee retention issues. I am in full agreement with their recommendation that he begin laying out the long list of tasks he now handles that could and should be delegated to another trustworthy party. If Trent establishes automated processes for most of his firm’s day-to-day tasks and minutiae, it’s possible that his two-person staff could successfully assume these responsibilities. But the key is that Trent must feel comfortable that things are being done properly, consistently, and to his satisfaction—with very little hands-on involvement. Also, with respect to servicing larger or smaller clients or accounts, we’ve seen firsthand that, with the right systems in place, it is possible to offer a consistent, high level of service on all accounts, regardless of size.

If you’re going to do something more than once, develop and document a system for it. We support many advisors who run highly efficient practices with minimal staff, and still have time to spend on the things they are best at and enjoy most. After committing to make some big changes, they spend much more time working on their businesses now than they did working in them before. It’s really motivating and rewarding to see the progress advisers are able to make when they’re driven and remain focused on their big-picture goals.


Your Practice Partner

Valuable information and assets provided by OppenheimerFunds, this season's sponsor of Practice Makeover.

Your Practice Partner

Practice Management tips and commentary on the first season of Practice Makeover, brought to you by OppenheimerFunds.

Don't just throw bodies at the problem

To manage those practices both administratively and operationally required one staff person for every 1-1.5 million in production.

Put Pressure On Systems, not People

We too often throw bodies at the problem without fixing the underlying issues. Instead if hiring superheroes to run a chaotic business, create a systemic practice where everyone can thrive.

How to grow your practice in today's complex marketplace

There are two fundamental business models for organizing your business: A sales business model, or a professional practice. Paul Blease, Director of CEO Advisor Institute at OppenheimerFunds walks through the major differences and issues.

Don't allow yourself to become digitized, marginalized or off-shored

Don't allow yourself to become digitized, marginalized or off-shored.

Control Access

Controlling access allows you to plan, prepare and execute on meaningful consultation with your best clients while creating capacity to manage and grow your business.


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About Practice Makeover

Over the last 15 years, InvestmentNews has heard - and told - the stories of thousands of advisers. Now we are going one step further: InvestmentNews is now working with some of the industry's top coaches to identify advisory firms that are in need of a "Practice Makeover". Our mission with this exclusive show is to help advisers take their practices to the next level - while providing our audience with practice takeaways that they can apply to their own businesses.

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