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Managing Capacity & Control in Your Practice

One of the best pieces of advice we received from a business mentor was, “An important decision you’ll need to make, if you want to grow, is to release and let go. You’ll eventually need to manage your capacity and control of your business by working with the right clients.”

This mindset tends to trip-up far too many financial advisors, but it’s essential that you climb and conquer this mountain if you truly want to create your dream practice that is constantly growing. Intially, most financial advisors start their practices armed with an incredible sales talent that solves problems, provides value, and fills a need. That is, the essence of a successful practice. But something happens between the time you get your business cards and when your growth becomes impeded. Recognize that every financial advisory practice starts small. As sales grow, so do the demands for your time and attention. The stumbling block for many FAs occurs when they hold on too long to the notion that they service ANY and ALL clients. Do you find this true for you?

Capacity constraints exist when the number of client relationships you’ve successfully acquired and served over the years becomes unmanageable. You work harder, but simply can’t get everything done. This individual capacity limit is known as the Capacity Wall. Every advisor individual or team will eventually hit their wall as they reach the sheer limits of what each person can manage even utilizing technologies, efficiencies and support staff. At a basic level, you’ll need to do an exercise to translate your overall goals into weekly meeting goals for yourself and/or each team member. This will help you understand if the plan is feasible.

Control constraints exist when your client-service model is non-existent or has been violated over and over again. As a result, your clients run your business. The benefits of going through the Managing Capacity and Control are:

1. Gaining more control over the future of your practice

2. Increasing time to service top clients

3. Identifying clients you need to cultivate, delegate or divest.

We are encouraging advisors to stop and take time to analyze their own practice’s constraints. It’s one of the first discussion points we have with an FA client looking to grow their business.

Systematize Your Advisory Business or Your Clients Will

All advisory businesses have systems. They make the wheels of your practice turn. Some systems are formal, however, too many are informal. Informal systems can prevent your practice from running smoothly when it comes to day-to-day operations, closing sales, gaining prospects and ultimately selling your business when you are ready to retire. Avoid unnecessary business struggles by creating and maintaining formal systems that will grow and distinguish your advisory practice.

Running an FA business requires more than it did 20 years ago. In many practices the client is “running” the advisor, resulting in the day spent in a hectic-stop everything-emergency-mode. Consequently, systems go completely ignored and chaos prevails. KAR Consulting believes one of the best ways to stop operating this way is to start systematizing. Financial advisors must find an organized way to deal with the different aspects of their business. When the processes of your business are proven and organized, you also have a lower chance of making costly errors that are expensive and can hinder a practice’s overall performance.

A system is nothing more than a series of processes that will enable you to grow your business.

  1. Processes are comprised of one or more activities.
  2. Develop and structure day-to-day tasks so they are able to function themselves, or done by another person.
  3. Efficient systems create a better experience for your clients.
  4. Successful systems build trust and attract prospects.
  5. Top producing practices have all their systems integrated and working in sync.
  6. Your systems need to create an experience for prospects/ clients that inspire them for more.
  7. Support staff are well informed and easily adapt at implementing the processes you have identifies/created.

Systematize your practice or your clients will do it for you. You set the vision. You lead the team.  And you determine how to achieve it.

Transitioning to Advisory is a Process. Not an Event.

Transitioning to an advisory model may seem overwhelming, but dedicating the time and making a step-by-step effort will result in steady progress. Financial advisors need to carefully evaluate their practice, identifying which clients are good candidates for a new type of engagement. While every client is unique, the process by which an FA engages clients does not have to be reinvented every time.

We advise FAs to seek out a program that is designed specifically to manage and guide them in the implementation of their advisory development process. This program should include:

  1. A Comprehensive Business Analysis: An advisor must receive a thorough assessment of their practice to understand the current state of the business from a qualitative and quantitative perspective, including its gaps and the strategy needed to help you meet the FAs goals.
  2. Business Remodeling and Re-Positioning of the Investment Offering: The crux of the success of any program lies in the FAs ability to articulate their new value proposition, to refine the client engagement and to restructure their team. The advisor must also develop strong messaging in communicating their new benefit offerings when faced with objections and pricing concerns from clients.
  3. A Price Model:  Given the commitment and importance most advisors have placed on building an advisory business, it’s surprising that there is significant unrealized revenue potential in many advisors’ businesses. It is realistic to build a business and pricing model that charges more than 1%. What can be difficult is raising the price once it’s set. The key to any pricing model is building the value into it and we will dive into WHAT value is important.
  4. A Marketing Plan: Financial advisors often struggle with their marketing and branding of themselves. With the trend on social medial  engagement, most advisors are paralyzed with HOW to use it. The process will take the time, attention and effort to “drill down” and determine a practice’s core strengths and align the marketing of the practice around those attributes.
  5. Execution and Implementation: All profitable businesses develop business plans to help them lay out goals, to identify resources needed to achieve them, and to provide an accountability mechanism to achieve goals. This is the last component of steps an FA must accomplish to optimize their business model and the transition.

Confidence to Move Forward and Make Changes

Transitioning from brokerage to a true advice-driven business model can be daunting for advisors because there are so many unknowns. Without a solid understanding of what is required and how to start, most advisors are frozen by uncertainty and their perceptions of the challenges posed by such a transition. The key to a successful transition is to have a solid plan. This requires a blend of both strategy—to guide the transformation of the practice— and tactics—to provide the road-map for the functional elements of the transition.



5 Steps to Developing Your Unique Value Promise


Your unique value promise (UVP) is nothing more than a short statement that clearly communicates the benefits your client and prospects get by using your service, process or advice. It pulls together all the complexity of your pitch into something that people can easily differentiate from the competition. Your UVP needs to be very specific. Simply describing the features or capabilities of your offer is not enough. Clients want to understand the benefits they will receive. Your unique value promise must focus on what your client really wants, needs and values, including how you will solve their problems or to improve on existing solutions.

Your UVP must answer in a compelling manner:

“Why should I buy this from you?” AND “Why should I do what you’re advising?”

Example: Telling people to buy a tire because of the specific treads is a FEATURE of the tire. Telling them to buy the tire for the safety of their family is the BENEFIT to them. The big task is helping clients connect with how the specific value you’re offering will benefit them, prompting them to think; “Yes, that’s right for me…”

All successful FA businesses have created a distinct value promise. Unfortunately, many advisors attempt to use another practice’s UVP and superimpose it into their practice and expect it to work. It won’t. Your value promise MUST BE UNIQUE to your business.

STEP 1: Know your ideal client.

Your ideal client is one you truly enjoy and appreciate working with. They’re the ones who are a perfect fit for what you offer. They are your advocates. Ideal clients generate an effortless energy, a shared vision or goal. Taking on less-than-ideal-clients might be necessary for financial reasons, but they usually turn into a greater challenge in the long haul.

STEP 2: Who is your target market?

Like many FA businesses, you likely have a lot of competition standing between you and a prospect. Narrowing your focus to one specific demographic gives potential clients a reason to notice you. If you’re not differentiating yourself in the marketplace, prospects look at price as the motivator of choice and then look for the cheapest. This can remain a challenging career theme for most advisors until they make the time to define a target market. Having a target market gets you focused and talking to right group of folks.

STEP 3: Know the needs of your target client and how you solve those needs.

Do your research to uncover the needs and concerns of your target market. Be sure you understand and can articulate exactly how you can help solve those needs and concerns. Resist the urge to focus on features. Clients and prospects don’t care about the financial plan (feature), they want to know what the financial plan will do for them (benefit). They want to know how you can solve their problems. What’s in it for the client? Once they understand the benefit to them, their resistance will drop and they’ll be open to giving you the necessary face-to-face meeting to further resolve their needs and concerns.

STEP 4: Know your product, service, process or advice.

Some advisors become too focused on a product, service, process or advice and the reasons a prospect or client should buy them, while neglecting the true client concern. For example, a large FA team used their marketing materials to focus on the endless features of their offering, that they felt were better than the those of the competition, without the mention of the benefit to the client. This marketing direction alienated their target market.

STEP 5: Be the expert.

One way to hone in on a specific sector is to become an established resource or expert in a topic of choice. If you’re perceived as an expert in your field, people will pay the price tag on whatever you offer. You can build up credibility by offering complementary information through your website or social media. Complementary information could include tips, industry information, or niche data that will help clients think of you as a reliable expert in that area. Your credibility increases with giving away information. It creates the perception: “If this is the value I’m getting for free, what will I get if I pay for it”?

Creating a unique value promise is part of having a successful business strategy. Satisfied clients are the source of a sustainable value creation. Developing a value promise is based on a review and analysis of your ideal client, your target market, your target market’s key concern and needs, and how your offerings will help solve those problems. Ultimately, your UVP will address the benefits, risks and value that your business can deliver to your clients, prospects and other third party professionals.

Dimensions to a Great Client Experience

When clients perceive multiple and equal substitutes for the provision of a service, there is downward pressure on price. By differentiating your client experience, you can protect your margins, increase client loyalty, and gain more word-of-mouth promotion of your financial advisory business.


When most or all of these elements are present, odds are greatly increased that you’ll deliver a great client experience

  1. Value. Value is a foundation for the overall experience. The client must answer the question: “Are we better off?” Do your clients fully appreciate the value you are currently offering? What could you do to enhance their perception of value-added in your relationship? Are you regularly tracking and communicating your impact? Would greater communication and transparency enhance your client’s sense of value?
  2. Education. Do your clients feel they have learned on a personal level that you have improved their financial goals? What are you doing to educate your clients? What can you do to build your client’s sense of security with your FA business?
  3. Engagement. Do your clients feel like active, involved participants in their financial investment process? Or do they feel like something is being “done” to them? What opportunities could you create to draw your clients in and make them greater participants?
  4. Emotional Resonance. Are you engaging your clients’ emotions—their hearts—through the experiences you create? Are your conversations always focused on the analytical and rational, or do you also touch on the emotional side and ask questions about feelings—about fears, hopes, excitement, and aspirations? Could you infuse your presentations with more stories, graphics, and videos?
  5. Entertainment. Have you captured the client’s attention and created enjoyment and fun? This is not trivial: People learn more, are more engaged, and are more open to new ideas when they are having fun. Is working with you, your team, and your support staff enjoyable?

When most or all of these elements are present, the odds are greatly increased that you’ll deliver a great client experience. The results can be powerful!