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I am passionate about our great business. How about you? Regardless of markets, economics, politics, regulations, or world events you are in a profession where you control your destiny. People always need advice about money. This is a great business for at least 3 reasons:
1. You can create your Ideal Life income.
This means earning enough money (after business expenses and taxes) to pay for your family’s desired personal lifestyle. This includes material things like the house you live in, the cars you drive, the fun you have, and the vacations you take. As well as other meaningful things like the quality of your family’s education, your spirituality, your fitness and health, and charitable involvement. Your Ideal Life income means getting your own financial house in perfect order. This means your financial affairs are organized to such a degree that you are a role model for your clients: your taxes are paid in full and on time, you have plenty of cash reserves, your debt is under control, you have the right amount of every type of insurance that’s relevant for you and your family, and your estate planning and legal document ducks are in a row. It also means funding your own future goals like financial independence and everything that requires money and planning to achieve. Can you imagine what it would be like to earn your Ideal Life income? This is a great business!
2. This is also a great business because you have time freedom.
You can work as many or as few hours per day, week, or year as you choose. You can take as much vacation as you like. If you organize your business right, you can fully unplug and take real vacations. A real vacation is when you are totally disconnected from work: no business emails, no office contact, no phone or Skype calls with clients or prospects, and no market watching. You’re not reading non-fiction books or magazines that trigger thoughts about business. You probably don’t even watch the news on a real vacation. Can you imagine a vacation where you are truly, 100% focused on having fun and being with the people you care about most without a single thought about work or money? Now, that’s a real vacation! How many of those would you like to have every year? How many days like that would you like to have every week? It’s possible in this business. Because this is a great business!
3. Perhaps the pièce de résistance of our business is that we help people.
It may not be the Red Cross, but it’s emotionally rewarding to help people make smart choices about their money so they achieve their most important goals and fulfill their most deeply held values. This is a great business!
How do you capitalize on all this great business has to offer? Can you really create your Ideal Life and build an Ideal Business? Absolutely! It won’t happen by accident, but you can make it happen.
Related: Why the Financial Services Industry Is a Tailwind Business
The Ideal Life.
The first step to creating your Ideal Life is to define it. Start by answering the following 6 questions:
You might even schedule a family retreat using these 6 questions as the basis for an all-day or weekend conversation to put into writing a full, robust vision of your Ideal Life.
Once you have done that, do some math to determine how much money will be required to fund your Ideal Life.
The Ideal Business.
Your Ideal Business must generate, after business expenses and taxes, the money to fund your Ideal Life. Your Ideal Business will have a finite number of Ideal Clients who pay a predictable amount of recurring revenue to be part of your Ideal Client Community.
The reason you have to have a finite number of clients is because time is finite. I call this the rule of 168. It comes from multiplying 7, the number of days in the week, times 24, the number of hours in the day. 7 x 24 = 168 hours in the week. For how long has this been true? More importantly, for how long into the future do you think this will continue to be true? For planning purposes, go with 168. Because every client consumes some amount of time to deliver your client value promise, your Ideal Business has to have a finite number of clients or your work hours will be unpredictable, maybe even seemingly endless. Since time is finite, and every Ideal Client consumes some time, then your number of Ideal Clients must be finite.
What’s the right number of Ideal Clients? After decades of helping FAs create this kind of business and life, we believe the right number is 50. Maybe a few more or a few less, but 50 is an excellent number to work with. At that number you can provide an extremely high level of value, the kind of value that makes it relatively easy to “rescue” financially successful clients from typical wealth mangers and financial “professionals.” (Your future Ideal Clients are currently doing business with other advisors.)
What’s the right fee? $20,000 - $50,000+ per year. Again, after decades of helping FAs create this kind of life and business, we have found that most people can deliver on their client value promise and have enough profit to fund their Ideal Life with a business that generates $1M - $2.5M of predictable, recurring revenue. The Ideal Life endeavor is not a zero-sum game. Everyone who achieves an Ideal Life wins! And everybody who’s willing to do the work can have an Ideal Life. Did I mention that this is a GREAT business?
What’s the client value promise that’s worth $20,000 - $50,000+ per year for the advisor who wants to build an Ideal Business and create their Ideal Life?
The only thing I will say here about the client value promise is that your business and life will be much more ideal with a non-investment centric or market sensitive client value promise. It’s hard to consider your business or life ideal while being jerked up and down and back and forth by external forces, like markets, economic events, world chaos, politics, and regulations. Trying to add value by market timing, securities selection, or picking the next great investment manager is far too unpredictable to build an Ideal Business. Besides, investment management is only one element of all that is required to be a truly comprehensive financial professional helping people achieve their goals.
Instead, the Ideal Business is built on an advice-based relationship that is valued by the client, and happily paid for, in all economic cycles and market conditions. The focus is on goal achievement and values fulfillment rather than investment performance.
Related: Helping People: The Best Part of Our Business
The Ideal Clients.
Your Ideal Client Profile is a combination of money and personality. Money is relatively easy. How much money does each client need to contribute so that your business generates the target amount of revenue necessary to operate the business, pay your taxes, and create your Ideal Life income?
Personality means that you are doing business with people you enjoy working with. When you look at your appointment calendar, there are names of clients who make you smile. What are the common personality characteristics of the clients who trigger your smile? You probably like working with people who are goal-oriented, show up to meetings on time and prepared, value and implement your advice, and pay your fee without debate. Perhaps you also like working with clients who refer you to their friends, family, and colleagues. You may also prefer to work with financial delegators. A financial delegator is basically someone who truly wants advice and follows it. They tend to be interesting people doing interesting things with their lives that matter more to them than trying to keep up with finance or economic news. Financial delegators tend to prefer advice over financial education. They want the most expedient path possible to implementing your advice so they can achieve their goals and get back to doing the other things are more important to them.
Yes, you can have a business that serves only Ideal Clients. Why? Because this is a GREAT business!
It can be done faster, but generally it takes 4 years. The next 4 years will pass as predictably as there are 168 hours in the week. What kind of business will you have built 4 years from now? What kind of life will you have created? Why not make them both ideal? It’s your choice.
Raise your sights. Do the work. Build an Ideal Business with Ideal Clients. Create your Ideal Life.