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Unlock Your Firm's Value in 4 Steps

By ClientWise | July 29, 2014

There has been a lot of discussion surrounding enterprise value as a means to evaluate financial advisory firms, including our most recent blog article on the topic: “To Plan for Succession or to Determine Enterprise Value?“. However, several financial advisory publications take the position of assessing whether or not creating enterprise value is a viable goal for financial advisory firms that rely on a fee-based model. They argue that fee-based firms hinder their potential to create enterprise value because, absent the sale of financial products each year, these organizations are largely unprofitable from a sustainability standpoint. 


My take is that this perspective is too limiting. Enterprise value is about much more than a strictly economic assessment of one’s business, it’s about taking into account the wisdom and value that you as the founder bring to your business, and how this is naturally replicated by you and your team members as your firm grows.


Now what I refer to as “value” here is not directly interchangeable with “enterprise value” as referenced above, though it is a large component of what factors into enterprise value. The value that I’m referencing consists of: The relationships you’ve created both with clients and centers of influence, the technical approach you use, your marketing and client acquisition approach, all of your operation and client service models, your firm culture, and the core values you bring to the table as an entrepreneur and as the owner of your business. 


The wisdom that you bring to your business is engrained into its fabric whether you are aware of it or not. Below I outline the steps to unlock this wisdom and consciously make it a part of the value you bring to clients and a part of the foundation that constitutes your enterprise value.


  1. Identify: There are a number of ways to identify the values that make you unique as a financial advisory firm. The first, and most obvious, is to take a look at the reasons you started your firm. What is the problem you saw within the industry for which your services provided a solution? Second, look at your competition to gain an understanding of how you are differentiated in the marketplace. Third, ask your clients and centers of influence what, in their experience, sets you apart from other advisors or advisory teams they have worked with. Finally, open it up for discussion with your team by conducting a brainstorming session. Solicit their ideas before bringing the others to the table to see how their thinking varies from these outside perspectives. Once these ideas are flushed out, introduce the others you’ve gathered and work with your team to rank them in order of importance. 
  2. Unlock: Once you’ve identified the parts of your business that make it unique to your vision and assessed their importance, be consciously aware of them throughout your day-to-day process. Try to unlock their relevance throughout all aspects of your business. If your focus on a certain client niche sets you apart, for example, bring this to the fore in your marketing and in your client service models. If your core values as a firm reflect environmental consciousness, live this in your business by practicing the values you preach. Try to pull as many of these threads throughout all aspects of your practice. It will deepen their roots in your firm culture, present a consistent foundation to your clients, and provide a solid vision for your team to work toward. 

  3. Replicate: In the process of understanding these values, and unlocking their relevance in other areas of your firm, realize how and when they are successfully exemplified in your business. Take note of the processes that accomplish this. Then assess where you can repeat these processes or, better yet, improve upon them. The key here is to involve your team members, as they will be an integral part in how you replicate (and later grow) the values and wisdom upon which you started your business. Eventually, your team will start to co-author these values, and what started as the wisdom of one person will eventually become the collective knowledge of your firm. It will become even further woven into the fabric of your business and as much a selling point for your practice as its financial make-up.

  4. Scale:  The final step in this process is learning how to scale these values so that the ways and opportunities in which they become productive for your business are endless. Ideally, a process that applies to one individual client with a small amount of wealth should also apply to a corporate or more complex client (assuming these are both demographics you serve) and everything in between. For example, the processes you use while onboarding your clients should highlight your values as a firm, capitalize on your industry knowledge in as much as you are able to sell your services to your clients during this process, engage your team in a meaningful and impactful way, AND be consistent across the board from client to client, with obvious individualized adjustments along the way.  This should apply to the other processes you’ve created in your business that also bring out your value, as highlighted in the steps above. How do you scale your marketing, your client acquisition, and operations in similar ways to serve different demographics of clients and still highlight your value?


The bottom line is, don’t be discouraged by your economic picture. While it is an important consideration, there are a lot of things that factor into your potential for enterprise value, and the first and foremost for your current success is to capitalize on the knowledge you bring to the table as a business owner.


Coaching Questions from this Blog: 

  1. Apart from the economic value represented by your firm what constitutes its value?

  2. How is this value unique to your firm and truly a part of the fabric of the business?

  3. In what ways is this value pulled throughout all aspects of how you do business?

  4. How are you actively working to replicate and scale this value as your firm grows, and the needs of your clients shift with the changing economic environment?


The 6 Step Client Acquisition Process

Topics: Business Development Marketing & Communication

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