Mary Mock shares her thoughts on how financial professionals can utilize practice analysis reviews to elevate their practices.
Evaluate Before Evolving By Mary Mock
Mary Mock is Senior Vice President and Head of Distribution for Touchstone Investments. In this role she is responsible for developing and executing on Touchstone’s overall sales strategies and directing all external sales activities.
As the wealth management industry has transformed over the past several decades, so have the roles, responsibilities and expectations of financial advisors. Gone are the days when financial professionals could grow their practices by simply buying and selling high-performing investments for clients. In today’s era, clients often expect their advisor to wear many hats, including financial planner, business consultant and sometimes, life coach, helping to curb emotional investing during stressful times. This evolution has not only changed the way a financial advisor works with their client but also how they manage their practice.
It is important for a financial professional to consider adapting their practice to meet the changing expectations of both current and future clients, especially as demographics shift in the coming years. According to Cerulli data, an estimated $84.4 trillion is set to pass from the Baby Boomer and Silent Generations to younger investors over the next two decades during the “Great Wealth Transfer.” At the same time, over a third of financial advisors are planning to retire in the next ten years – potentially leaving those who need advisory services with fewer options.
These concurrent trends present a significant opportunity for financial advisors to attract, retain and serve more clients as well as grow their businesses accordingly, but it also requires them to intentionally evolve their practices to handle a potential influx of new clients and still deliver services as efficiently as possible. To build a practice that thrives in the changing environment, financial advisors can consider focusing on identifying key areas for improvement and optimization – and leveraging Practice Analysis Reviews can be a powerful way to do it.
Aligning Evolution To Intended Outcomes
Similarly to when a financial professional starts to build a comprehensive financial plan for each client –a long-term strategy cannot be done in a silo. It is important when pursuing Practice Analysis Reviews, for a financial professional to consider taking inventory of the current state of their practice and determining areas of opportunity in order to develop an effective plan. This process will allow for a tailored, goal-oriented roadmap.
At times, financial professionals have a clear idea of how they’d like to improve their practice but need assistance with execution. In other cases, an objective third party can provide a holistic analysis of the practice, helping to identify opportunities for improvement or growth. Touchstone’s practice management consulting draws from more than 125,000 hours of experience across 17 broker-dealers. We leverage data and insights from this experience to develop targeted programs that support financial professionals in five key areas of practice development, including:
- Structure: improving the way a financial advisor and their support teams work together
- Growth: understanding current state for generating growth and forward-looking growth projections
- Service: making the team better or more competitive at serving clients
- Efficiency: ensuring the practice is operating as efficiently as possible
- Diligence: managing and evaluating investments more strategically
For the committed advisor focused on evolving their business, making progress in any one of these areas is certainly possible alone—but execution often proves challenging without the guidance of a coach and a strategic, personalized plan. In our experience as practice management consultants, the most successful financial professionals achieve meaningful results when we help them define measurable goals, establish realistic timelines and create manageable, step-by-step action plans. In many cases, we’re able to improve multiple areas at once, leading to greater efficiency and better positioning the advisor to meet the changing needs of their clients.
Uncovering New Optimizations With Objectivity
“Capacity” has been a popular buzzword in wealth management over the past few years, as financial advisors are constantly looking for ways to get time back in their day to serve their clients more completely. But between the business of their day-to-day job responsibilities and the challenges we all sometimes face when it comes to being objective about our own shortcomings, it can be helpful to tap a third-party expert to conduct a practice analysis to outline clarity on specific areas of improvement.
In the past couple of years, we have seen several opportunities for optimization that made immediate differences in the advisor’s practice. This did require initial focus and prioritization beyond the traditional “to-dos” of the daily routine but in addition to identifying capacity for growth, we found both straightforward and creative ways that paid off whether it was helping put cash to work, improving team synergies, conducting pricing and fee schedule analysis or working to improve the client experience overall.
Focusing on improving team synergies can create significant capacity for financial professionals in the long run. We have helped teams with changing the way they work, and they found that instead of functioning as individual practitioners developing an environment for a unified team approach can boost productivity, create leverage and aid in retaining both team members and clients. Taking this proactive approach not only positioned the business for growth and helped deliver promise and value to clients, but it also prepared the practice for future transitions.
For example, we recently partnered with a financial advisor who had developed several strategic initiatives the year prior but struggled to implement them due to limited capacity. They were exploring the idea of adding a new team member and refining role definitions within the practice to create more focus. However, existing team members were firmly aligned around the belief that the business first needed to realign its service model before taking further steps.
Before the advisor simply added headcount to the team, we suggested a strategic planning offsite with a focus on establishing a setting that encourages everyone from the team to speak freely – where the sales assistant should be as vocal as the financial professional – and by removing daily distractions – phones ringing, instant messaging, email, etc. The offsite was incredibly well received. We helped the advisor redefine two senior leadership roles, add one full time employee and completely refocus its service model. We have continued to see that the practice has fostered healthy, renewed team communication, clear roles and responsibilities and follow a detailed action plan for the advisor to accomplish their goals.
Getting Started And Selecting An Accountability Partner
Just like no two practices are the same, there isn’t a one size fits all approach to Practice Analysis Reviews. It is important for financial professionals to consider programs that include accountability partners that can develop and coach through actionable plans, not to mention offer documented results and successes from past engagements.
In the same way you evaluate a personal trainer or a dietician, it’s not about finding someone who rattles off industry jargon or someone who suggests a quick-fix, expensive one-time solution. Financial professionals can ask about costs and program structures or even samples of action plans to see if the approach resonates with them. It’s also important to find a coach who is not a “yes man” – rather, they should be ingrained in the advisory landscape and willing to provide clear and honest feedback, while also being able to ask the tough questions. The best partnerships encourage transparency and problem-solving.
At Touchstone Investments, we do not charge for our Practice Management Consulting Program because we prefer to be a true partner within a practice with a focus on developing a deeper relationship where we are truly helping a team grow. Through our decades of experience, we’ve seen how partnering for success is crucial. The most successful advisors are those who invest in continuous collaboration with a coach who helps them improve over time. This ongoing partnership enables lasting change, empowering advisors to run more efficient, profitable businesses that can continue to evolve as the wealth management industry does.
