As a financial professional, you may talk regularly with clients about the importance of long-term planning. But don’t overlook your own long-term goals. 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 new opportunities to enhance your growth potential.
The good news is that strategic planning doesn’t need to be time-consuming. Even dedicating one hour a week to plotting your future could help ensure that you’re growing your business in a smart and sustainable way.
As you begin your long-term strategic planning process, you might set aside a few hours to explore what you’d like for your practice. Why did you become a financial professional in the first place, and 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 you might draw up a mission statement or a list of core values.
Also, think about your vision for your practice over the next three, five or 10 years – or longer, depending on where you are in your career.
Once you create a vision for the future, do a quick assessment of your current situation. Many advisors use the classic SWOT analysis that considers their business across four metrics.
Unfortunately, too many financial professionals stop here – with a nicely bound strengths analysis that gathers dust in a drawer. To be effective, this analysis should be a starting place, like getting your car checked before a cross-country trip. To ensure a safe, timely journey, you’ll also need to map out different routes to your destination 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 by following a few fundamental steps:
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. A contingency plan is important to any strategic exploration. You might also outline some preliminary plans for your retirement, such as looking for a successor or potential buyer.
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 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 some emotional component linking what they do to their personal mission. This value proposition not only serves as a key component of your messaging, it can also help 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 good fit for your business.
Create a strategy for growth. Now it’s time to brainstorm some concrete goals to help you pursue your vision, capitalize on opportunities and address any challenges. For example, you might target strategies to expand your client base, strengthen your credentials or build contacts in a desired market niche. You might also want to explore new technology or outsourcing options to boost efficiency and free up your time. Pick two or three goals to focus on and make plans to revisit others in a year. (See: Taking advantage of technology to up your game as a financial professional)
Set measurable goals. 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 that you revisit regularly and adapt to changing circumstances. Review your goals and metrics at least quarterly, assessing progress, adjusting tactics and revising priorities as needed. Consider ways to reward yourself and your staff when you meet interim goals.
Seek input from key stakeholders. The more you can include your staff in both setting goals and celebrating progress, the more ownership they’ll feel in the process. Clients can also be an important source of insights. Many advisors have found client satisfaction surveys and client advisory boards especially useful. You can invite some highly valued clients to serve as special advisors, and then take them out for a lunch on a periodic basis when you can ask for their feedback on your business and long-term plans.
Think strategically about your clients. Client segmentation is a tool many financial professionals use to think more strategically about their client base. You can start by picking 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 metrics, and then calculate an average score per client. You can 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 you take to improve their experience? Alternatively, could you reduce the time you spend on lower-scoring clients through automated investing programs or by allocating them to an associate? You can also use this measure when considering whether it makes sense to sign a new client. (See: Grow and streamline your practice through managed accounts)
Think strategically about technology. Technology is a top strategic priority for many financial professionals looking to improve efficiency and scale their business. But investing in technology without a plan can be a costly error. Before committing to any new investment, ask yourself what you hope to gain, and establish a way to measure desired results over time. Also, consider the full costs of this 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: Taking advantage of technology to up your game as a financial professional)
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 you the greatest satisfaction and success. (See: 7 ways to grow your financial professional practice)
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