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There’s never been a better time to be in the financial advisory business. And if you’re new to the industry, the opportunity is limitless—if you’re adequately prepared. But if you aren’t, the journey can be a long, slow, uphill slog with a minimal chance of success.
Too harsh? Not at all. It’s a fair warning to anyone who gets into this business with little or no understanding of what it is about and what it takes to succeed.
Historically, the advisory business has attracted young people enamored by numbers, analysis, and their application in the investment world. And most are motivated by the desire to help people achieve financial security. Here’s the deal, though—you can’t help people if they don’t trust you. You can’t build a practice if you can’t convince people to follow your advice. You can’t stay in business if you don’t prospect, and prospects won’t gravitate toward you if you don’t stand out.
#1. This is a people business, period.
First and foremost, it is critical to understand that this is a people business. If you relish spreadsheets but not people, you will have a difficult time in this business. If you’re focused on how much money you can make rather than on building enduring relationships, you’ll spend your time replacing your clients instead of growing your practice.
#2. The profit is in the relationship
Advisors focused on how much they generate in fees or commissions with clients are destined to grow their practice incrementally, if at all. While it’s true that fees and commissions are how advisors get compensated, there’s no real profit from investment sales. Instead, the profit is in the relationships you build with clients. You solidify the relationship and increase the lifetime value of clients by putting them first in all you do and striving to give them a one-of-a-kind advisory experience.
#3. Priority one is to develop your soft skills
The most successful advisors love working with people and are energized by their interactions with them. They have a natural ability to communicate with clients or work long and hard to develop the necessary skills.
Soft skills such as active listening, demonstrating empathy and a natural curiosity, asking open-ended questions, explaining without jargon, telling relatable stories, and taking the time to communicate your value to your clients don’t come naturally for most people. But they are essential for capturing a prospect’s attention, building rapport that leads to trust, and convincing them to follow you and your advice.
All of this requires superior soft skills, which require hours and hours of practice. Advisors who focus first on mastering their soft skills are much more likely to succeed than those who don’t.
#4. Narrow your prospecting focus
Prospecting must be a focused, continuous activity regardless of what stage of your business. Granted, it will evolve over time—from beating the bushes for anyone who can pass the mirror test to identifying and targeting your market to referral marketing.
But the more quickly you can narrow your marketing focus to a well-targeted market consisting of the type of people you want to do business with (your ideal client), the happier and more productive you will be. And, if you hone your expertise or specialty to better serve the niche you develop, your clients will be happier, opening the spigot for a constant stream of referrals.
Your primary goal is to fill your pipeline. As you work to narrow your market, you may need to use several different prospecting strategies (e.g., cold calls, direct mail, etc.).
#5. Stand out from the crowd
If you haven’t already noticed, hundreds, maybe thousands, of other advisors in your area are doing whatever they can to get in front of the people you are marketing to. Just because you are new to the business doesn’t mean you shouldn’t be doing whatever you can to stand out from the crowd. It’s vital to differentiate yourself so prospective clients will notice you and stop searching for an advisor when they meet you.
These are essential steps you can start taking from day one to build your brand and get people to notice you:
- Focus on providing exceptional service your clients will talk about.
- Develop a specialty or area of expertise in a niche market.
- Volunteer to speak at community events or host educational workshops.
- Become a thought leader. Publish blog posts and create infographics that can be shared on social media platforms.
- Create a distinctive value proposition that clearly states the value your clients will receive from your services that they couldn’t get from other advisors.
Next to working on your soft skills and prospecting, building your brand is your most important activity. If you don’t differentiate yourself, you will likely be invisible to your market.
When starting and growing an advisory practice, new advisors must be able to keep several plates spinning at once to make measurable progress. If you focus on these five plates in your first few years, your business will flourish.