The ClientWise Blog

New Success in Succession™ Program Addresses Glaring Gap

Posted by Ray Sclafani on Nov 19, 2019 10:00:00 AM

We’ve all seen the sobering statistics. The average age of financial advisors in 2019 is about 55, with roughly one in five age 65 or older. And yet:

  • Nearly three quarters (73%) have no clear written succession plan;
  • Even those within five years of retiring, more than half (60%) don’t have a plan; and
  • Far too many (47%) next generation advisors don’t know if or how they fit into the future firm.

Keep in mind that these are self-reported percentages, so the reality of the situation may be far worse. The lack of a clear path to transition remains perhaps the largest potential breach of fiduciary duty in our industry today – with the continuity of care and financial well-being of countless clients hanging in the balance. For most advisors (both firm

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, Succession Planning

Motivation Beyond Money

Posted by Ray Sclafani on Jun 21, 2019 10:13:10 AM

Finding Your Personal Satisfaction Drivers

In our work over the years with hundreds of advisory teams, nearly every phenomenally successful team leader has shared ONE common attribute – a clearly defined objective as to what he or she wants from their career beyond mere monetary rewards.

Don’t get me wrong; we all want to be well compensated for our entrepreneurism, our labor and our diligent advocacy on behalf of our clients. But there must be a sense of some larger purpose in order to continually push us to go a little bit above and beyond.

"Sustainable growth and success are far more likely when what you seek to achieve is clear, important and personal to you as a human being."

Building an enterprise based on something larger than just profit will dramatically color the approach you take to building your team, the way in which you interact with clients, the strategy and tactics you employ to grow the business, and ultimately, the personal satisfaction you derive from your work.

Define your satisfaction drivers

Carve out some time where there are no distractions, and thoughtfully answer the following questions. Once you’re done, set them aside for a week and then revisit your answers to ensure they truly reflect who you are as a person.

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management

Empty Chairs - The looming NextGen advisor crisis

Posted by Ray Sclafani on Jun 3, 2019 4:38:13 PM

The statistics paint a pretty bleak picture. The average financial advisor today is age 51, with nearly half (43%) over the age of 55 and therefore inside of a decade from retirement age. Conversely, the number of new junior advisors entering the workforce isn’t even close to keeping pace with the number of senior advisors exiting. According to Ernst & Young’s recently released The Next Generation of Financial Advisors report, each year there are two financial advisors qualifying for Social Security benefits for every new advisor entering the market.

Advisory firms have become incredibly top-heavy organizations. According to Michael Kitces, three out of every four U.S. practices currently have more lead advisors and partners than support and service advisors to work with them.

Sustainability impact

Exactly what does this mean for the long-term sustainability of your enterprise? Without a talented team of young advisors to eventually take over the reins, not only are you risking your firm’s future, you’re seriously jeopardizing your ability to monetize your life’s work. More importantly, you’re neglecting your fiduciary duty to your current clients.

With each client you’ve onboarded, you promised them (either explicitly or implicitly) that you’ll be there through all of their life’s transitions – helping to put their kids through college, preparing them for retirement and dealing with crises like illnesses or the death of a spouse/parent whenever they arise. However, if you don’t have a plan to ensure continuity of client care beyond your working life, that promise is rather meaningless.

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management

When’s The Right Time to Sell Your Business?

Posted by Ray Sclafani on Sep 27, 2016 11:50:00 AM

A mere 3% of today’s advisors have a written continuity plan to protect their business (and more importantly their clients’ best interests) in the event of their death or disability. Fewer than one in three (31%) advisors age 60 or older have a formal written succession plan in place. For a profession that prides itself on planning and preparing clients for the future, most of you are doing a pretty horrible job when it comes to planning your own.

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, Succession Planning

Finding the Right Buyer for Your Business

Posted by Ray Sclafani on Sep 20, 2016 3:45:00 PM

We’ve all seen the statistics that there are roughly 30-50 buyers lined up for every advisory practice that comes onto the market. It certainly seems to bode well for those advisors either beginning to contemplate an exit strategy or well down the road towards identifying a potential buyer. It’s critical to understand that very often the “right” acquirer for your business is NOT the apparent highest bidder on paper. 

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management

Benchmarking the Beach House

Posted by Ray Sclafani on Sep 7, 2016 11:29:23 AM


As an industry, we’ve made great strides over the years towards aligning compensation with client interests – steadily migrating from transaction-based to fee-based models. With the implementation date for the DOL Fiduciary Rule looming on the horizon, that pendulum will continue to swing even further. However, are asset-based fees truly the BEST approach to compensation?

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, Client Engagement, DOL ruling, DOL Fiduciary Ruling

Is Your Kid the Right Succession Plan for Your Business?

Posted by Ray Sclafani on Jun 15, 2016 4:17:02 PM

Perhaps no generation is as misunderstood as millennials – the people who represent the future of our financial services business. We tend to haphazardly paint their ranks with an incredibly broad brush as self-centered narcissists, lacking all manners in social skills as a result of growing up behind a computer screen.

Spend any considerable amount of time with these 20-somethings, however, and you quickly begin to realize how socially-aware, compassionate and relationship-oriented so many of them are. They simply have a different approach to communicating and engaging than previous generations.

But what if that millennial is your own kid, and possibly the future leader of your firm?

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, Team Development, Succession Planning

Top 10 Secrets of the Best Financial Advisors in the Business

Posted by Ray Sclafani on Jun 2, 2016 12:39:32 PM

What is that “secret sauce” that enables Advisor A to take a $10MM AUM solo practice and build it into a $1+ billion multi-advisor business, while Advisor B with the same intellect and credentials struggles to surpass the $25MM mark? It’s a question that, given my unique opportunity to work with hundreds of advisors across a diverse array of practice types, I get asked at least a handful of times nearly every day.

 

 

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, Team Development, coaching for financial advisors

How to Avoid Benchmarking Your Way to Mediocrity

Posted by Ray Sclafani on May 11, 2016 4:05:09 PM

Ours is an industry seemingly obsessed with benchmarking – whether it’s the performance of our investment portfolios or the performance of our businesses; we want to know what everyone else is doing. Those things that the majority of firms are doing, we quickly christen as “best practices” and hold them up as models for others to emulate. 

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Topics: Business and Operations Management, metrics, how advisors should benchmark their practices

Short-Term Comp = Long-Term Headaches

Posted by Ray Sclafani on May 5, 2016 3:17:44 PM

In just the past few weeks alone, I’ve come across no fewer than a half-dozen situations where highly successful advisors suddenly find themselves hamstrung by compensation decisions they made years or even decades earlier. As rapid practice growth (both organic and via acquisition) continues to accelerate, it’s a challenge that I expect will likely touch more and more firm principals in the foreseeable future.

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, compensation

Wealth Advisors: What is Your Business Really Worth?

Posted by Ray Sclafani on May 3, 2016 2:06:11 PM

Every advisor – whether thinking about selling their firm or not – wants to know the value of their business. It’s simply human nature to be curious about how much your years of sweat equity are really worth. As one of your largest assets, it’s essential for planning purposes to have a clear idea of your practice’s value. So, how much is your wealth management business actually worth?             

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, selling your wealth management business

How to Master Your Business Financials

Posted by Ray Sclafani on Mar 9, 2016 3:20:33 PM

Revenue is vanity, cash flow is sanity, but cash is king.” It’s an age-old business maxim that too few independent advisors ever fully embrace. As firm owners, many of you have endured personal and financial sacrifices for years in order to establish and grow your practices. It’s only natural to want to enjoy the fruits of your labor when you finally turn a corner and annual profitability continues to rise. The inclination to equate the firm’s net income to your personal income can be strong. In fact, it’s not at all uncommon for advisor owners to be extracting close to 100% of their annual net income out of the business. Unfortunately, that can be a tremendous mistake!

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management

How Much is that Advisor in the Window?

Posted by Ray Sclafani on Feb 21, 2016 9:00:00 AM

Perhaps more than any other industry, the financial advisory business is keenly attuned to benchmarks. You carefully watch major indices, craft investment portfolios to mirror or exceed certain benchmarks, and comb through the latest economic reports for signals. It’s only natural, therefore, when it comes to compensation most advisors would look to benchmarks in hopes of comparing their firm to what their peers are doing.

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, compensation

Pt 1. Elevate Your Financial Advisor Business Plan

Posted by Ray Sclafani on Dec 10, 2015 3:58:40 PM

You spend your days counseling clients as to the critical importance of careful and proper planning. Yet a great many of you either don’t have a business plan, or haven’t revised and updated it since you first started practicing. So ask yourselves a few questions: Does your firm today look identical to how it looked on Day One? Do you have the exact same service offering, same team members and same assets under management? More importantly, do you expect and desire the firm to evolve over the next five years?

Commit to making a fresh start to 2016 by dusting off your old business plan, meaningfully revising it, and actually using it for its intended purpose – a roadmap for your business. If you never actually wrote a business plan for your practice, it’s not too late to start. And it can be a tremendous opportunity to actively engage your team members in helping to shape your future firm. 

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, Business Development

Laying to Rest the Ghost that Haunts your Team

Posted by Ray Sclafani on Oct 30, 2015 4:34:36 PM

Many people mistakenly look at the world and think that what they see is reality. In fact, what they see is merely their perception of reality. Unfortunately, these perceptions often evolve into restrictive limiting beliefs, coloring our views about how the world works and preventing us from reaching our full potential.

Like a virus, these limiting beliefs can quickly spread throughout your team and become collective beliefs. In his book “What got you here won’t get you there,” Marshall Goldsmith makes a strong case that there are a handful of workplace habits (e.g., negativity, clinging to the past, failing to adapt or embrace change) that tend to keep successful people and teams from making the next big leap forward.

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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management