Positive market performance can hide ineffective new-business strategies
The United States has seen a great bull market. But when everything is going well, businesses often become dependent on growth coming from market performance rather than from true organic expansion.
Read Mike Byrnes’ insights in the Financial Planning article titled, “As RIAs grow, here’s how advisor compensation is changing.”
In that piece, he shares several key lessons that are expanded below:
- Tailwinds do not last forever so plan ahead
- Many advisors are not doing well bringing in new business, net of market performance expanding account sizes.
- Firms need to a concrete plan for winning more new clients and gaining existing clients’ assets that competitors currently manage or that clients are self-directing.
- Compensation needs to be tied to organic growth
- An advisor needs to have individual goals that roll up under the firm’s overall business plan.
- Some of those goals should be growth related and they should be tied to salaries and bonusses. There is a reason “service advisors” are not paid as well.
- Growth requires a team effort
- A compensation plan should be mapped out for all associates, not just salespeople.
- From marketing to administration, everyone can help generate new leads. If they do, they should be rewarded for doing so.
- An outside-the-office strategy is needed
- Advisors should spend more of their time “outside the walls” to better deepen client relationships, build strategic alliances and meet new people.
- Firms should encourage external activities in the community that are focused on developing new leads.
- Delegation and efficiency are key
- Advisors must stop doing tasks that administrative staff can handle, freeing up time for revenue-generating activities.
- Technology, especially with advancement from AI, will make it easier than ever to operate efficiently and focus on growth.
- A focus on growth needs to be consistent
- Long-term goals only work if people keep making progress toward them in the short term.
- To help advisor not lose sight of the prize, regular meetings should take place with leadership, consultants and/or an accountability partner.
Need help with your organic growth? Hire Byrnes Consulting to increase success.
