How to Become Your Own CEO

Evaluation of your business plan can steer your practice the right way.

By Ray Sclafani


As the salaries of America’s most sought-after CEOs continue to skyrocket, it’s easy to marvel at the extravagance of executive compensation. But the market seems to reflect the fact that proven leadership skills are rare and highly valuable. Whether you’re steering a Fortune 500 company or your own wealth-advisory practice, leadership is a crucial element to your organization’s success. As a result, many advisors today are taking control of their destinies by becoming the CEOs of their own enterprises. 

A CEO State of Mind

Take a look at “John,” an advisor working in Orange County, Calif. “When I started my business 20 years ago, I never imagined that I’d someday be managing more than $100 million in assets for my clients,” John says. “Following this tremendous asset growth, I needed to step back and evaluate every aspect of how I managed my practice.”

John initially viewed himself as a sole proprietor. These days, he sees himself as the chief executive of a dynamic company. As a financial advisor, John frequently measures the financial health of companies in which his clients are invested. When evaluating company fundamentals, he considers revenue, profitability, management, client base and competitive advantages in the marketplace. Those efforts ultimately led him to make a discovery about his business.

“One day I realized that I needed to bring those same fundamental research skills to my own practice,” says John. “For example, while my practice was profitable, a closer look at our balance sheets revealed that our assets under management would likely decline over the next 10 years when many of our clients retire and begin taking money out of their accounts.”

To ensure the continued health of his practice, John created a formal business plan for attracting and retaining new clients. “To diversify our client base, we expanded our referral network and opened our doors to a select group of new clients who had the potential to substantially grow their assets over time.”

Leadership Starts Early

When Larry Page and Sergey Brin became the co-founding CEOs of Google, they both were under the age of 30. Financial advisors today have a similar opportunity to exert leadership over their own destinies at an early age. For instance, “Peter,” an advisor working in Miami, became a leading producer for his firm while still in his 30s. After only a few years in the business, he decided to set an ambitious goal: limiting his new accounts to those with more than $5 million in assets.

“I realized that to achieve my goal, I would need to act more like a CEO and improve my business operations,” says Peter. The first step he took was to establish a clear strategy for his practice. The next move was to build a team that could help him achieve his goals for growth.

Peter admits that building a team wasn’t easy. At first, he was somewhat intimidated by the hiring process, and he was reluctant to delegate tasks to other people. But over time, he became more comfortable with hiring and training individuals. He also was able to motivate his group and hold team members accountable for their responsibilities.

As part of his business strategy, Peter has helped some of his smaller accounts find new advisors while he has focused on his most important clients. Today, he’s careful to maintain a balance between portfolio management and directing his own business operations. While managing money for clients remains his first love, he now views managing his business as equally important.

Taking Charge

The good news for financial advisors is this: You don’t need board approval to become a CEO. You can take steps at any point in your career to ensure that you’re acting as the chief executive of your own practice. Here are some action steps to consider:

  • Have a clear strategy. A CEO creates a mission statement for an organization and holds his team accountable for meeting goals.
  • Develop your team. Surround yourself with talented team members and learn to delegate.
  • Focus on business systems. Make sure that your technology and business platforms will help you compete in today’s marketplace.
  • Perform a gap analysis. Are you missing any key tools for serving all of your clients’ financial needs? If so, how will you fill the gap?
  • Develop a transition plan. Examine how much time you spend working in your business versus how much time you spend working on your business.
  • Consider hiring a business coach. Many of America’s most successful executives work with professional coaches to help them stay focused on delivering top performance while optimizing their time and resources.

Strong leadership is at the core of a thriving practice. And in this competitive marketplace, putting your practice on autopilot isn’t an option. Just as corporate boards now expect more from their CEOs, clients these days expect more from their financial advisors. Clients want to work with investment professionals who can both simplify their lives and address the full spectrum of their financial needs. To do that, you must have a strong team in place and keep an eye on the bottom line. That’s not such a tall order, and it’ll pay off. When you become the CEO of your own practice, the sky’s the limit for success.

Ray Sclafani is President of ClientWise LLC, an organization founded to support the financial advisory practice of the future. Delivering unique practice management strategies focused on client acquisition and retention, ClientWise provides coaching and training for leading financial advisors. For more information, e-mail info@clientwise.com or call 1-800-732-0876.

Originally published in OnWallStreet, August 2007.