Author: Scott Wilson, Business Development Associate

In today’s competitive marketplace, growing a successful financial practice can be challenging. But with the right business development strategies in place, advisors can achieve significant growth and success. Implementing some foundational business growth strategies can help advisors boost efficiencies, improve the client experience, and set up their business for greater success in the future. Let’s look at some common strategies to get started.

Detailed Analysis of Your Business

To position their practice to grow, advisors need to begin with a goal in mind and a plan for how to achieve it. Two questions to ask to get this process started are:

• What does your ideal practice look like?
• What’s stopping you?

Answering these basic questions is a critical first step to getting focused on a business development plan. One way for an advisor to achieve their vision for an ideal practice is to complete an analysis of their business, which provides a fundamental understanding of the client base, as well as the services offered.

Going through this exercise can help advisors gain information on where they are the most profitable, while also helping identify areas that are pain points for the business.

Many advisors use a variety of tools to keep track of client information, interactions, and investment and planning strategies, including CRM tools like Redtail, financial planning tools like MoneyGuidePro, and investment planning tools like Envestnet. A review of the client data in these tools can help with an analysis of the business and client base, along with the types of services regularly being offered and implemented with clients. Some questions advisors may want to ask as they look at this information include:

• Which type of clients are most profitable? What type of clients should I be focusing on?
• Is there a type of client that best aligns with my planning approach and philosophy?
• How many clients can I serve without compromising an excellent client experience?
• Do I have a defined standard of care for clients? Do I provide different levels of care based on the size or type of relationship I have with the client?
• Who are the centers of influence that have the most impact on my business? How many of these relationships can I reasonably manage?
• What is my plan for clients who are no longer a good fit for my business?

Differentiate the Business from the Competition

The competition is tough for financial advisory businesses, so it’s important for advisors to find a way to set their practice apart. One way to do this is to develop a niche – for example, focusing on servicing doctors, corporate executives, or women. The data from a business analysis may uncover that the advisor is already serving a niche.

When an advisor narrows their focus, they become an expert in a particular area, and it is easier to define the ideal client and build a service offering to appeal to what matters most to them. Specializing in an area will allow an advisor to face less competition, create greater client loyalty, and increase profitability and referrals.

Build Strong Partnerships

Another way for advisors to accelerate growth is by establishing strong partnerships with centers of influence (COIs).  Advisors most often seek out attorneys or CPAs in their area who specialize in servicing similar types of clients. Some of these partnerships may develop naturally when the advisor and COI have mutual clients and have worked together on client issues. When seeking out COIs to partner with, advisors should choose those with a strong network who are known as experts in their field. It’s also important to be willing to reciprocate referrals so being comfortable with the attorney’s or CPA’s capabilities and reputation is also critical. An established COI network can help an advisor gain more referrals and grow their business, while also freeing up time for more productive activities.

Develop an Engagement Strategy with Clients

While clients have unique traits, advisors can still create standardized practices and processes for engaging with them. A structured engagement strategy increases efficiency in the business and allows clients to know what to expect from the advisor. Examples of areas where you can establish standardized engagement processes include prospecting, client onboarding, and ongoing communications with the client base. Advisors may also have different tiers of service and engagement with clients based on the total assets invested with them or other criteria. Using a CRM tool can also automate certain engagement practices, making it easier to manage and track activities.

Create a Social Media and Marketing Plan

A well-defined marketing plan can help advisors communicate the value of their brand to prospective and current clients and grow the business. Important steps for creating a plan include defining goals, identifying the target market, developing a brand based on what makes you different, determining channels, and then measuring results and adjusting as needed.

Most advisors will build an advisor website as the centerpiece of their marketing strategy. But a website alone will not grow the business. It needs to be supplemented with a targeted digital strategy to drive the right prospects to the advisor’s site.

Tactics may include email marketing which can include a regular email newsletter, as well as contact when market and economic conditions warrant. Many firms partner with marketing services that provide FINRA-approved content.

Advisors also should consider developing a digital and social media marketing strategy to attract new business. Social media platforms like LinkedIn, Facebook, Twitter, and Instagram allow advisors to target messages to their ideal prospects. Posting unique, relevant content to social media platforms, in the form of blog posts, invitations to webinars, videos, and podcasts can also help drive traffic to a website. This tactic can be one of the most effective ways for advisors to expand their reach and find new clients.

Streamline Processes

As an advisor’s practice grows, it’s easy to get bogged down in day-to-day administrative and compliance tasks. Finding ways to automate and streamline processes in the business will allow for more time in front of clients and prospects. As mentioned earlier, a CRM tool – like Redtail – helps automate prospecting and relationship management, allowing advisors to schedule client meetings, document meeting notes and client recommendations, and automate messages and touchpoints. Financial planning tools – like MoneyGuidePro – allow advisors to easily help clients define and prioritize goals, and then build a financial plan. And investment planning tools – like Envestnet – can be used to generate proposals for managing a client’s portfolios. These are some of the most helpful tools for an advisor's practice, but there are other programs and opportunities to improve other processes and practices as well.

Prepare for Succession Planning

It’s never too early to begin planning for retirement. Experts recommend advisors begin planning at least five years out for retirement, but planning can begin earlier to ensure sufficient time to implement the plan and to be prepared in the event something unexpected happens.

As noted above, streamlining processes and implementing technology can make it easier for someone to come in and take over servicing clients easily if needed. Some advisors establish an agreement with another advisor who can step in if they become incapacitated or die. A written agreement also helps ensure the family can realize the full value of the practice if the advisor can no longer serve clients.

Other advisors may bring in a family member or junior advisor with the intent of passing the business on to them eventually. And some advisors, who may be considering the sale of their business, will want to get a business valuation and begin looking at potential buyers. Either way, laying a foundation for succession planning helps make staff, family, and clients feel assured that they will be taken care of in any situation.

Use Available Expertise and Resources

The path to growing an advisory business doesn’t need to be a solo adventure. Most firms help with planning business development strategies and offer advice and resources for implementing tools and marketing strategies.

To learn more about business development strategies and resources available through the Momentum Independent Network, contact Scott Wilson at scott.wilson@hilltopsecurities.com.

To learn more about Momentum Independent Network, contact Wealth Management at WealthManagementInfo@hilltopsecurities.com or 833-4HILLTOP.

The paper/commentary was prepared by Momentum Independent Network (MIN). Momentum Independent Network, Inc. Is a registered broker-dealer and registered investment advisor that does not provide tax or legal advice. MIN and Hilltop Securities are wholly owned subsidiaries of Hilltop Holdings, Inc. (NYSE: HTH) located at 717 N. Harwood St., Suite 3400, Dallas, TX 75201, (214) 859-1800, 833-4HILLTOP. Member FINRA/SIPC