Scaling Your Financial Advisory Firm

Scaling Your Financial Advisory Firm

If you’re a Star Trek fan, you know that when Star Fleet cadet James T. Kirk took the Kobayashi Maru test, which simulates a supposedly unwinnable mission, he came up with a unique solution — one that provides a lesson for our industry.

“I didn’t cheat,” Kirk explains after beating the simulation. “I changed the parameters of the test.”

Today’s financial advisory firms face our own seeming no-win scenario. We are being asked to deliver a richer experience to our existing clients while simultaneously growing our practice.

And we’re required to complete those missions in the same 2,080 annual work hours that are already jam-packed with client and administrative tasks.

True, we could hire more people to meet these goals. But when small advisory firms try to grow by adding capacity, their expenses can soar, pushing profit margins down even as revenues grow. Added client capacity means more staff, more office space, and, well, pretty much more of everything.

So, cadet, what’s your answer? How do you meet this challenge without violating the time/space continuum or adding costly bodies to your team? I suggest changing the parameters of the challenge, just like the future captain of the Enterprise

Here are three suggestions for flipping the future from no-win to win-win for both your firm and its clients.

Relay Realistic Expectations – A well-informed client is a well-behaved client. If your clients know what communications to expect from their advisor, they are less likely to impulsively (or compulsively) contact their advisor every time the market hiccups or roars. 

Creating a robust communications plan — a monthly email, quarterly video conference, and annual in-person meeting, for example — and clearly conveying that plan to clients can save the firm untold staff-hours that would otherwise be spent fielding client calls and emails. What’s more, when expectations are made clear, advisors don’t have to spend time wondering whether/when/how they should be reaching out to their clients. All this found time can be used to super-serve existing clients and build relationships with prospects.

Standardize the Process – An advisory firm’s routine activities can be insanely time consuming. We spend hours and hours on such mundane-but-vital tasks as onboarding new employees, building portfolios, or preparing for client meetings. Standardizing these procedures boosts efficiency, reduces stress and, again, frees up advisors to engage in the human interaction required to retain and attract clients.

Integrate Your Tech – Just as the young Jim Kirk tweaked the training computer to create a winnable scenario, we can leverage our tech to give us a better chance to meet the challenges we face. 

Integrating your firm’s various digital tools can result in massive time savings. By weaving together your CRM, calendar, portfolio management system and custodian platform, we can start to eliminate some of the menial tasks that currently fall between the various systems and must be handled by advisors or other staff members. The result?  Yep, even more time to make and deepen connections.

Tailor this this three-pronged strategy to your firm’s situation and you’ll have added days to your work year. That’s time better spent doing what matters most in our business — building and deepening human relationships.

You may never be an icon starship captain. But if you can change the parameters of the test we face, you will be the leader in our industry — maybe even a legend.