PRACTICE MANAGEMENT
Use SWOT analysis to help determine the future of your practice.
Create and follow a roadmap to help identify the most important areas to build your business.
As a financial professional, you talk regularly with clients about the importance of long-term planning. But don’t overlook your own long-term goals for your practice. As you think about the future, you may aspire to long-term asset growth without a clear plan on how to achieve it. Or you may look for ways to boost efficiency but overlook opportunities to enhance growth potential.
The good news is that strategic planning doesn’t need to be time consuming. Dedicating one hour a week to plotting your future may ensure you’re growing your business in a smart and sustainable way.
As you begin your long-term strategic planning process, set aside a few hours to explore what you’d like for your practice. Why did you become a financial professional? What did you hope to achieve? If you could change anything about your day-to-day work life, what would it be? Based on this exploration, draw up a mission statement, vision statement and a list of core values.
Think about your vision for your practice over the next three, five and 10 years—or longer, depending on where you are in your career.
Once you envision a future for your practice, do a quick assessment of your current situation. Many financial professionals use the classic strengths, weaknesses, opportunities and threats, or SWOT analysis, to evaluate their business across four metrics.
S Strengths
W Weaknesses
O Opportunities
T Threats
S Strengths
W Weaknesses
O Opportunities
T Threats
Unfortunately, too many financial professionals stop here. To be effective, this analysis should serve as a starting place, like getting your car checked before a cross-country road trip. To ensure a safe, timely journey, you’ll also need to map out different routes to your destination, locations to stop and rest, and identify important landmarks and milestones for assessing progress.
Once you’ve determined your vision for the future and assessed your strengths, weaknesses, opportunities and threats, you’re ready to build and execute your roadmap for the future:
Create a contingency plan. Even if you’re years from retirement, it’s important to consider what would happen to your practice in an emergency. Outline some preliminary plans for your retirement, such as looking for a successor or potential buyer. (See: Contingency planning to help serve your clients in case of a crisis)
Define your unique value proposition. A value proposition statement tells people exactly who you are and what you offer. This statement goes beyond, “We provide exceptional wealth planning service,” to specify what kinds of clients you want to serve, and what unique benefits you would like to offer. Many financial professionals have found it effective to include an emotional component linking what they do to their personal mission. This value proposition not only serves as a key component of your messaging, it also helps you weigh other business decisions. For example, if your unique value is providing financial advice to up-and-coming tech professionals, you might think twice about taking on post-retirement clients who may not be a fit for your business.
Create a strategy for growth. Now it’s time to brainstorm concrete goals to pursue your vision, capitalize on opportunities and address challenges. For example, you might target strategies to expand your client base, strengthen your credentials or build contacts in a desired market niche. You may also explore new technologies or outsourcing options to boost efficiency. Pick two or three focused goals and make plans to revisit others in a year.
Make goals measurable. According to many motivational experts, the best way to achieve long-term results is by setting specific, measurable and time-bound goals. For example, if you want to attract new clients, you might set a goal of contacting 10 new prospects a week. Enter these goals in your planner and keep a tally of your progress.
Assess and reward progress. To be useful, your strategic plan should be a living document revisited regularly and adapted to changing circumstances. Review your goals and performance metrics at least quarterly, assessing progress, adjusting tactics and revising priorities as needed. Consider ways to reward yourself and your team when you meet interim goals.
Seek input from key stakeholders. The more you include your staff in setting goals and celebrating progress, the more ownership they’ll feel in the process. Clients can also be an important source of insight. Many financial professionals have found client satisfaction surveys and client advisory boards useful. You can invite highly valued clients to serve as special advisors, and then take them out for a lunch on a periodic basis where you can ask for their feedback on your business and long-term plans.
Think strategically about your clients. Pick three or four attributes—such as AUM, revenues or referrals—that you consider important in a client. On a scale of one to five, score each client on these separate attributes and calculate an average score per client. Then, sort your clients by these scores and reflect on different categories. Are you giving your highest-scoring clients the time and attention they deserve? What additional steps could improve their experience? Alternatively, could you reduce the time spent on lower-scoring clients through automated investing programs or by allocating them to an associate?
Think strategically about technology. Investing in technology without a plan can be a costly error. Before a new technology investment, ask yourself what you hope to gain and establish a way to measure results over time. Also, consider the full costs of the investment—including hidden costs such as the down time for training and migration. Integration—the ability of various systems to share data without manual entry—is also a key consideration that may require additional investments of time and capital. Many financial professionals have turned to subscription-based cloud services. These solutions allow you to test various options while reducing the up-front costs and business risks of large-scale technology investments. (See: Up your game as a financial professional with technology)
Creating and following a roadmap for your future can help you identify the most important areas to build your business while focusing on the areas that offer the greatest satisfaction and success. (See: 7 effective strategies to grow your wealth planning office)
