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.



Storytelling—A Crucial Element to the Success of a Brand

Brands can use the emotional response of their audiences to storytelling to achieve their vision and goals.story-telling-collage

Long gone are the days when brands could just rely on broadcasting their messages to reach and motivate their key audiences. We have entered a consumer-centric age in which a new media environment is on 24/7 and digitally accessible from anywhere. This empowers audiences with more control over the information they receive and the brands they decide to endorse.

In this new paradigm, companies must learn the art of storytelling in order to effectively reach, engage and convert their audiences into brand evangelists. Storytelling is what captures an audience’s attention, as it prompts individuals to connect to their emotional and spiritual energies to establish whether they agree or dissent with the story being told.

The use of storytelling to promote the sale of products, services or brands is not a new concept. It is instead the ongoing evolution of technology that has empowered companies with new and highly effective ways in which to engage and interact with their audiences. On a broader level, storytelling can also help a company define organizational values, establish a company culture and, ultimately, educate others giving them the opportunity to better understand its mission, philosophy and core values.

The need for brands to shift from message broadcast to storytelling has become a crucial element for success. A brand is not an abstract philosophical concept that resides outside of a company. It is rather an enduring account of multiple emotional experiences that audiences experience when they think or come in contact with a product or images that evoke that brand. When a company tells an inspiring, motivating and engaging story, social media platforms become the most powerful conduits to share the story virally around the world and drive attention to the brand.

Growing the client base, promoting sales and conquering increasing market share continue to be some of the key goals of the traditional brand building process. However, today that process has undergone significant change. While in the past brand building focused chiefly on feeding customers facts about a product/service, today audiences report that storytelling is what captures their attention and gets them also to fancy a particular product or service over another.

But what is this fascination with storytelling? Some argue that it could be a consequence of the exponential growth of social media, as an optimal conduit to promote and disseminate stories. Others simply state that stories help us to understand who we really are, establishing an emotional connection to the main character or topic of the story–ultimately, connections lead to loyalty. However, a post on the Harvard Business Review Blog Network by Paul J. Zak –a professor at Claremont Graduate University and President of Ofactor, Inc.—reveals how recent scientific work is putting a much stronger emphasis on how stories change individuals’ attitudes, beliefs and behaviors.

In his post Prof. Zak explains, “As social creatures, we depend on others for our survival and happiness. A decade ago, my lab discovered that a neurochemical called oxytocin is a key “it’s safe to approach others” signal in the brain. Oxytocin is produced when we are trusted or shown a kindness, and it motivates cooperation with others. It does this by enhancing the sense of empathy, our ability to experience others’ emotions. Empathy is important for social creatures because it allows us to understand how others are likely to react to a situation, including those with whom we work.”

Further studies conducted by Prof. Zak and his team revealed that character-driven stories do consistently cause oxytocin synthesis. In addition, the amount of oxytocin released by the brain was identified as a strong predictor of the degree of willingness of people to help others; i.e., donating money to a charity associated with the story being told. Subsequent studies also revealed that to motivate a story attention must be generated by developing tension during the narrative. Stories that can trigger that tension will most likely prompt an audience to share the emotions of the characters in it, and after it ends, be prone to continue mimicking the feelings and behaviors of such characters.

A compelling example of the discoveries made by Prof. Zak and his team are provided by the Dove’s Real Beauty Sketches video, which registered within a couple of months nearly 150 million total views. In this short video an FBI-trained sketch artist draws women first based on their own self-perception and then on that of a stranger. The stranger’s descriptions resulted consistently closer to what the subjects actually looked like. This helped Dove underscore the point that women have a propensity to be exceedingly critical of their appearances and failing to recognize their true beauty. The emotional feelings stirred by this video sparked incredible brand awareness, without a single mention of Dove and its products throughout the video.

Undoubtedly, good stories inspire and motivate us all. They ignite an emotional connection to the plot and/or character(s) that sparks passion. Storytelling is crucial to the success of a brand due to its powerful connection-loyalty and trust-building attributes. Ultimately, we are beasts of emotion more than logic. We love to tell and hear stories. Consequently, for a brand the journey to effectively engage and motivate its audience must begin with “Once upon a time.”

Joltin’ Joe & The Power of Teamwork and Collaboration

A recent family experience reinforced to me how a group of people, working together, can efficiently come up with solutions that are far superior to what any one individual can accomplish.

It was a typical weekday evening, and my daughter was working on a school project. Her assignment was to develop an informative and entertaining multi-media presentation. She chose to use Prezi as her presentation software, because it’s a fresh and interesting storytelling tool. She wanted to add music to her presentation. From the other room she shouted, “Dad, I’m doing a presentation, and I need a good baseball song; can you give me a few?” I ran through the classic Take me out to the Ballgame, Centerfield, by John Fogerty, and Glory Days by Bruce Springsteen options, but she wasn’t moved. When I asked her for more specifics about the presentation, she shared that the topic was the life of Joe DiMaggio. I immediately shared, “What about Mrs. Robinson by Simon & Garfunkel.” As an indication of our generation gap, she replied, “Who are they, they sound like lawyers? And what does Mrs. Robinson have to do with baseball?” Once she listened to the song and realized that Joe DiMaggio’s name is mentioned, she ran with the idea.


A short while later, she came into the other room frustrated that she couldn’t properly sync the song with the content she had developed. She shared that the timing of the song wasn’t right, and she didn’t know what to do. Her younger brother quickly chimed in, “why don’t you just drop it into Garage Band and crop it so that it works for you?” “That’s a great idea,” she replied. She was back in business.

Her final challenge was a strong finish. She showed us the presentation, and she wasn’t thrilled with the ending. My wife suggested that she sync the lyrics, “Where have you gone Joe DiMaggio … Joltin’ Joe has left and gone away,” to the final portion of the presentation about Joe’s death. She went back to work, made the adjustments, and she loved the final product.

So what does a Tuesday night family experience have to do with your Wealth Advisory team? Potentially, quite a bit. My daughter never would have achieved her end result without the benefit of Teamwork & Collaboration. Effective collaboration helps teams make better decisions. It helps them come up with better solutions. It makes them more creative. It challenges assumptions, and expands possibilities. In fact, Collaboration is one of the keys to the Holy Grail of teams – synergy. Why then, do teams often fall short of realizing the potentially business-transforming benefits of Collaboration?

The answer is that Collaboration doesn’t occur automatically; it needs the right environment and culture. First, the team needs to have a high level of Trust. According to Patrick Lencioni, the best-selling author of the Five Dysfunctions of Teams, “there is no more powerful attribute than the ability to be genuinely honest about one’s weaknesses, mistakes and needs for help. Nothing inspires trust in another human being like vulnerability – there is just something immensely attractive and inspiring about humility and graciousness.” In this case, my daughter was comfortable asking for help, and this led to a far superior outcome. The relationship between Trust and vulnerability goes both ways – a high Trust level allows team members to be comfortable with vulnerability, and the willingness to be vulnerable, particularly in a Team Leader, enhances Trust on a team.

There are two other important team elements that allowed Collaboration to flourish in this situation. First, no one on this “team” cared who got the credit for the ideas. In this case, my daughter got all of the credit – in this case a good grade – and my wife, son and I were happy to help. Similarly, no team members had an agenda. If my son were worried about his sister looking better than him academically, he may not have been as forthcoming with his assistance.

Is your team realizing the potential benefits of Collaboration? Here’s a checklist you can us to assess your team:

  1. Everyone participates in our team meetings, and shares their perspectives and ideas
  2. If a team member has a strategy to develop or a problem to solve, they seek input from others to develop optimal outcomes
  3. Team members put the team ahead of their personal agendas
  4. It’s ok on our team to admit that we need help and to acknowledge that we don’t always have all the right answers
  5. Our Team Leader sets the strategic direction for the team, but we all have input on the best ways to accomplish our goals

Remember, one of the great things about being on a team is that you’re not alone. You all get to benefit from each other’s skills, insights, perspectives and creativity. Good luck on your ongoing journey to realize all of the potential benefits of an optimized team.