Positioning Your Practice for the Future

By Brad Corbin

One way to adapt to the changing world of 403(b) is to take control of it by careful business planning and disciplined implementation.

If you were born between 1946 and 1964 and you entered the financial services industry between 1980 and 1990, you likely match the profile of today’s typical independent financial advisor. When we were young, our generation was at the forefront of heralding change in our society. We struggled to be different, to resist the status quo. We wanted the world to be a better place and we weren’t afraid of changing in the process. Isn’t it funny how our attitude about change has shifted since those youthful and carefree days?

For years we’ve been able to make an excellent living in a unique niche market helping a very deserving clientele. Teachers are an excellent example of the backbone of working Middle America. They get up each day, go to school to help shape and mold young minds for future entrepreneurs. Their lives are somewhat routine and based on doing the same successful things over and over to produce the desired outcome.

Sound familiar? We as independent financial advisors also found a rhythm in our professional lives. We used the same methods to find new clients, the same techniques to set appointments with them, the same basic sales presentation, and same systems to serve them once the sale had been made. We were living in a perfect world that was safe and predictable. So what happened? One morning you woke up and noticed that the world had changed. You were no longer allowed to see your clients at school. The products you had sold for years weren’t included in the new plan at your school. Your annual income had dropped, or would soon, due to commission reductions or flat elimination from the market.

Where do you go from here? How can you reinvent yourself ? How can you position your practice to meet the challenges of this new future?

The following is a simple four-step approach to creating a new direction for your practice.

Set Your Goals

There’s nothing more powerful than a written goal. Writing it down will transform a dream into a goal. Think of your goals as nothing more than a dream with a deadline.

The first step is to determine exactly what you want your business to look like. Let’s assume for this example that you’re no longer able to sell in your primary market as in the past. You now have to find alternative ways of generating income for your business.

Draw a mental picture of your business as you want it to be. See yourself working with clients, staff, new products and services, or even new markets. Now with that picture in your mind, make a list of goals that will lead to that image. Your list may include:

  • Maintain (or increase) my current income level with my existing client base.
  • Develop a new client base with my current product/service offering.
  • Diversify my income stream to include non 403(b) revenues.
  • Expand my product/service offering to include life insurance, long-term care (LTC) or fee based advisory programs.
  • Make the transition from transaction-based compensation to recurring asset-based revenue.
  • Increase the overall value of my practice.
The good news is you have an existing client base that you’ve developed over the years. Your clients trust you and look to you for assistance in retirement planning. Now you have to spend a little time thinking of new ways to help them as they approach retirement. In the past you worked with your clients to accumulate funds for retirement. You may now want to reposition yourself as a retirement income specialist. Show them how you will work with them to provide for their retirement income needs.

These ideas must be translated into goals for your practice. Keep in mind these goals are written on paper, not carved in marble. We change and so do our clients. You should review your goals constantly and adjust them to keep them fresh and relevant.

Make Your Plan

You cannot do a goal! To achieve a goal you must take many steps that, when completed, add up to the accomplishment of the desired outcome. The next step is to develop a detailed plan that will formulate your goals into achievable and measurable steps.

So let me ask you a question: Do you currently have a written business plan? It doesn’t have to be an encyclopedic volume with charts and graphs. It can be a simple two or three–page document that covers these basic areas:

Vision and mission – This may sound academic and unnecessary for your practice, but the questions addressed by vision and mission statements are critical to your success in growing your business. Your vision is simply a statement that expresses where you want your business to be in the future. Your mission statement addresses how you’re going to get there. It can be thought of as a statement of “how we do things around here.”

For example, your vision statement may be: “To be my client’s trusted advisor.”

This simple statement clearly states what you want your practice to be. It looks at the end game and positively states the image you desire to achieve. You want your clients to see you as the person they trust and will seek out when they have financial questions or needs.

Your mission statement could be: “Each client’s needs are unique and must be met on their terms.”

This statement indicates that the way we do things around here  is not cookie cutter but tailored to each individual client’s situation.

Keep in mind that your vision and mission statements are exactly that, yours. They’re important because they force us to take a stand and state how you want to operate in the future. They’re an expression of what we want and how we’re going to get it.

Strategic objectives This is nothing more than a list of your key business goals. You should have between three and six strategic objectives that you’ll focus on each year. Examples might be:

  • To generate $X in gross commissions this year.
  • To increase my asset-based residual commissions by X percent this year.
  • To grow my assets under management to $X this year.
  • To add X new clients this year (or to fire X clients this year).
  • To close X new long-term care sales this year.

Your strategic objectives should be SMART— Specific, Measurable, Attainable, Realistic, and Time referenced.

  • Action plans – Each strategic objective should have a list of specific activities and tactics with an implementation timeline to achieve that objective.
  • Accountabilities and deadlines – Each action plan should also note who is responsible and when each item is to be completed.
As you think about writing a business plan that will reposition your practice to meet the challenges of the new business environment, consider these questions:

What value do I have to offer my current clients that I’ve not offered in the past? You’ve spent the past 20 years working with your clients and helping them save for retirement. Now they’re approaching a new phase in their lives, converting assets into retirement income. You can help in this process by becoming a retirement income specialist.

Perhaps they have a great defined benefit plan and won’t need their supplemental retirement plans for living expenses. In this case, you can help them with ways to reposition those assets into a product such as life insurance that will allow them to have access to cash for emergencies and pass the balance on to their heirs tax free should they not need it.

How about long term care needs? You should have this conversation with all your clients. It helps build a stronger relationship with your client when you’re seen as a financial advisor rather than a single-product sales rep. It will also create additional sales opportunities.

What new client base can I develop with my existing products and services? Often your products and skills are very transferable to a different client base. Try to find a different set of clients who have a need to work with someone like you. If you’ve focused on public school teachers and staff, for example, you may consider federal or state employees as potential clients. Their pension plans and supplemental retirement programs are similar to those offered teachers and your products and services should line up nicely with their needs.

How can I take my practice from transaction based compensation to recurring asset-based income? There are many ways to change how you’re compensated for the service you provide your clients. You can use advisory products that are fee based or select trail options wherever available. Recurring revenue will not only provide you with a more predictable personal income stream, it will also increase the value of your business.

Get Resources

Now that you have your goals clearly identified and an action plan on how you’ll achieve them, you must align your plan with the proper resources to help you get there. Resources that are readily available to you are:

  • Partners. This includes product vendors, your broker dealer or registered investment advisor (RIA), and trade associationssuch as NTSAA/ASPPA. Each of these partners offers resources, training, technology and support you can leverage in executing your business plan.
  • Personnel. Your business plan should leverage the talents of your staff, freeing up time to do what is most productive and profitable. Don’t get trapped into doing mundane functions that can be delegated to others in your organization.
  • Technology. Use technologies such as eMarketing, prefilled or fillable forms, online business processing and banking. Use your website to drive more sales, serve your clients, and advertise your services. The tools of yesterday, such as cold calling, print advertising, and direct mail, have nearly become obsolete.
  • Products and services. Keep up with the many new products and services being introduced each year. Examine each new product for innovative ways to help your clients.

Just Do It

The most elegant business plan in the world is useless if it’s not executed. It won’t build your business sitting on the bookcase in your office. It’s a dynamic document that needs to be implemented, reviewed regularly, and adapted to keep up with a changing business environment. Nike’s slogan, “Just do it,” says it like it is. It doesn’t take a lot of thought, just a little action.

There’s another wise saying that states: “The thousand mile journey begins with the first step.”

So what are you waiting for? You’ve set your goals, you’ve made your plan and you’ve aligned the resources you need to achieve that plan. So now, JUST DO IT!


Brad Corbin is managing director for GWN Securities Inc. in Palm Beach Gardens, Fla.

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