Practice management strategies to prepare you for the future

This quote is often used to describe Charles Darwin’s work: “In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment.” In the current world of financial advisors, there is a storm of change. The three major changes Charles Darwin would observe are regulatory, technology and business models. Advisors will need to adapt their practices and show the future-ready way, which is about acquiring, servicing and managing capacity in their practice. No longer can advisors accumulate hundreds of clients and have successful relationships with hundreds of wealthy families.

Acquire, service and manage capacity are three keys to a successful practice of ideal clients and three key ways to adapt to change. This is the difference between average and elite advisors in the future. I truly believe that the successful advisors of the past will not be the successful advisors of the future.

So how do you prepare your practice to be future-ready?

Let’s start with your acquisition processes. Having a proven process to acquire more ideal clients is critical for the future of every advisor. Finding more ideal prospects and opportunities and acquiring them faster through key practice management processes while making deeper emotional connections is what advisors need to work on every week. Advisors are discovering that strategies of the past are not as effective, and they need a new way of thinking for the future.

Seventy-five percent of advisors do not have a clear definition of ideal clients. But the ones who do grow their practice by 17% or more annually by clearly segmenting whom they are spending time with.

How many advisors segment their business on an annual basis and raise the minimum revenue for ideal clients while providing more value to their best clients?

Do you feel you are working past your true capacity? Is it time management that is the problem, or is it capacity?

And what is your clear definition of an ideal client? There is one critical measure: the revenue you get from an ideal client for the value you deliver. It may be upfront revenue in terms of insurance or ongoing revenue for wealth management and advice.

What is your number for the ideal revenue per year that you would like to generate in the future from an ideal client? Is it $10,000, $20,000, $30,000, $50,000 or more? This will help you identify who you are looking for as an ideal client. How many of those ideal clients could you manage in a calendar year, 50? 75? 100? This is the first critical step in finding your capacity because everyone in this room has a capacity number. Your job is to find it, manage it and develop it. If you don’t know your capacity number, how will you ever know how to manage your time?

Managing capacity is the No. 1 challenge for financial professionals. Why do some advisors thrive in uncertainty while others struggle with over-capacity issues year after year? In the future-ready way, you need to know your capacity number so you can block time and, more importantly, free up time while focusing on your ideal clients and prospects, to generate your ideal revenue.

Grant W. Hicks, CIM, is a practice management expert and president of Advisor Practice Management, a financial coaching and consulting firm. Hear more in this episode of MDRT Presents: