The A, B, C’s of a Sustainable Practice


Michael Brady, CIMA®, RIA Managing Director

In the effort to build a sustainable practice, many advisors spend a good deal of time and money creating strategies to attract new clients.  However, in the race to acquire new clients, some overlook the potential for organic growth.

Organic growth refers to increased asset management fees, fees for new service offerings, or client acquisition based on referrals. One strategy known to help accelerate organic growth involves segmenting your existing client base to understand better the needs of your clients and tailor services and offerings around each segment.

You don’t have to use a complicated rating system, simply classify all of your clients as either “A,” “B,” or “C” according to guidelines such as these.

Dispersion of Clients
Once segmented, you can more easily see where you are and where you should be spending your time. If you are like most advisors, around 20% of your clients make up 80% of your business. Advisors with whom this 80/20 rule apply often find that the demands of serving the “B” and “C” clients makes it challenging to ramp up service levels to “A’s.”

Segmentation Strategies
Once your client base is segmented, you can dive deeper into the needs of your “A” clients and more easily identify common behaviors and priorities.  For example, you may find your “A” clients are all in similar professions and may respond well to a certain delivery style, or have similar needs which could rise to new service-offerings or strategic partnerships with other service providers. You may also find coverage gaps, or clients who don’t have a “go to” person at your firm (other than you) to contact for service. If no such resource exists, you now have a roadmap for hiring criteria.

When you look at your “A” group as a whole unit, you can also begin to design networking events, client appreciation outings and outreach efforts tailored to their collective interests.

In addition to devising strategies designed to prompt your “A” clients to become engines for growth, you must also create goals for the “B’s” and “C’s.” Ultimately, you will have to decide how to staff for and provide service to the “C” clients in such a way that is consistent with your brand and does not create a drain on your resources. You will also want to develop programs to cultivate the “B’s” so they eventually become “A” clients.

Ultimately, the segmentation exercise will help you identify the best-fit financial and service solutions for clients at every point along your client continuum. The end-result is better served clients, and a more efficient and sustainable practice.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, a Registered Investment Advisor.

Becoming an Obvious Expert Beverly D. Flaxington for Brinker Capital

One of the best ways for financial advisors to generate new business is to become “known”. Known as the expert, as the advisor with insights, and as the person who has something important to say. Many investors like to work with someone they perceive as knowledgeable and well-rounded.
How best to become an obvious expert? The first important piece is to be seen and heard. This can be done through using a PR (public relations) strategy and through social media. PR includes things like being interviewed on radio and television, being written about in newspapers and periodicals, and issuing press releases or other news stories. Social media includes things like LinkedIn, Twitter and Facebook, and means engaging in online discussion and information boards to talk about your expertise.
Some advisors shy away from the media because they don’t know what to say. As a first step, think about what interesting angles you can address relative to important topics in the news. Don’t limit your thinking to just the stock and bond market movements; think about trends for retirees and/or divorcees, multi-generational issues, or any other newsworthy trend that can connect back to your process or philosophy with regard to investing or planning.
Consider some of the following to establish your credibility as the obvious expert:
(1) Radio and television interviews are “free” advertising. Read and watch different journalists and reporters. Find out what they often report on. Write an email or a note to respond to some information they’ve given and your angle on their story. Make friends with your local media. Reporters and journalists are looking for new, fresh angles all the time.
(2) If you want to put more effort into it, consider doing your own blog talk radio show. You can pay a nominal fee to get set up on one of the major networks such as Live365 or blogtalkradio. With your own show you are responsible for coming up with content for each program, but you can always leverage other relationships such as COIs (Centers of Influence) like realtors, attorneys or accountants. Having your own show means you would be the interviewer instead of the interviewee. However, it allows you to get your thoughts and ideas across to an audience each week or month, depending on the show schedule.
(3) Create audio or video recordings of any interviews you have, or just record yourself telling case stories about how you work with clients. Circulate the audio or video to the press and also post it on your website.
(4) Issue a press release about something interesting happening at your firm. This could be the launch of a new website, a new angle on your service offerings, or a new hire to your firm. Anything happening at your firm can be newsworthy. Send press releases out over many of the free services available, such as this or this
(5) Engage in social media. As you pursue relationships with the younger generation (i.e. anyone under 40 years of age), they will immediately search you out on Google or some other engine to find whatever they can about you. It’s imperative to have a presence of some kind. Have an updated LinkedIn account, follow people on Twitter or create an account, if your compliance department allows it. Have a blog if you can, or at minimum post to other’s blogs when you have a response or idea to share.
Put a focus on becoming known, being seen and staying out in the public eye.

There are many opportunities to do so. Consider the ones that are right for your practice.

Understanding Behavioral Style in Developing New Business – Part 2 by Bev Flaxington

In Part 1 of this two-part blog on behavioral selling, we discussed how behavior style impacts communication and why it is crucial for the successful advisor, business development representative or client services person to understand this science. Now, in Part 2, we give some sales examples.

If an advisor learns how to identify her or his own behavioral style, and learns all the nuances around it, he or she can learn the styles of buyers and influencers. Then, he or she can adapt their behavioral style to increase the probability of true connection with prospects and for developing long-term relationships – even with people very different from themselves. For business development people, this leads to an increased ability to close more business with new and existing prospects and clients. For client service folks, this means the ability to manage a long-term relationship even when there’s no real “click” of personalities.

In Part 1 we described the four styles – D for Dominance, I for Influencing, S for Steadiness and C for Compliance. Everyone has a “core” style, e.g. one dominant style out of these four; having determined that your prospect or client prominently displays the characteristics of one, your objective is to communicate with him or her accordingly. Here are some characteristics of each and how you’d approach them.

“D” – Interested in new & unique services or products; very “results” focused; makes quick decisions
“I” – Interested in showy and flashy products; focused on the “experience” (is it, or does it allow for, fun!); makes quick decisions
“S” – Interested in traditional products; very trusting and is looking for trust; is slow in decision making
“C” – Interested in proven, time-tested products; needs and seeks information; is very slow in decision making

As an example of communicating based on this knowledge, we’ll take the “I”. We’ll call this client Mr. Jones. He, like other core “I”s, is effusive and upbeat – an extrovert. They have a high need to verbalize ideas and their key emotion is optimism. Their expectations of others are high and their conflict response is to run away. Their stress reliever is interaction and socializing with people. Descriptors for them include inspiring, persuasive and trusting.

To further help you determine what core style you’re dealing with, there are four communication factors that are giveaways for each of the four styles. These factors are 1) Tone of Voice, 2) Pace of Speech and Action, 3) Words Used and 4) Body Language. In our example, how can you tell you’re interacting with a core “I”? Key on the communication factors for instant clues:
• Tone of Voice – it will be energized, enthusiastic, friendly and colorful
• Pace of Speech and Action – s/he will exhibit fast speech and fast action, and be fast toward people
• Words Used – fun, excitement, immediate, now, today, new and unique
• Body Language – you’ll feel the fast pace, the fast movement and orientation toward people.

Now that you’ve identified Mr. Jones as a high “I”, you must calibrate your own natural style for communicating with him. So if you are, say, a high “C” – as many advisors are – you need to make sure that you pick up your pace a bit, smile and nod your head to show that you’re fully engaged with the high “I,” keep the focus on them and ask questions, respond to their small talk and give them as much time as possible to verbalize. For a core “C” (or “S”) advisor, this can be exhausting – but you can relax after the meeting, which will be more successful if you adapt!

By taking the time to listen, observe and ask good questions, advisors can discern the behavior style of prospects and clients – and open whole new relational opportunities in the process. Next time, we’ll discuss some of the questions you can ask to help you determine style.

In Search of Someone

Stan Warchol, Brinker Capital 

As the director of Brinker Capital’s client services department, I made it my personal mission to smoke someone out.

“Someone” is that elusive figure that makes mistakes. It’s that anonymous person that gives clients inaccurate, incomplete and sometimes out-and-out false information.

Here is how “someone” invades an organization.

A client at the other end of the phone says he spoke to “someone” and was told that he didn’t need to submit one of the required forms. “Someone” assured another advisor that her request could be processed immediately, when in fact her forms weren’t in good order. “Someone” confirmed for a different client that “it” was done yesterday, when in fact “it” hadn’t been done at all.

No matter how good an organization, “someone” can bring it to its knees.

The only way to make sure “someone” doesn’t invade your firm is to demand accountability from everyone. No matter how brief the interaction, anyone who talks to clients should document the call. They should give their name and contact information so the person knows whom to call with future inquiries. No one should have the luxury of anonymity, particularly when their role is to answer clients’ questions and help you succeed.

With an easily accessible record of all of clients’ interactions, “someone” will be forced to find shelter in the firm down the street.