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Jim
started his career in financial planning in his early
20s. When I met him he was only 35 years old but had built
a solid business, was making a professional income, and
was considered successful by his peers. But he wanted
more. During our initial discussion, he said something
that grabbed me. It was, “I love helping my clients,
but I hate my business.”
By
following the ladder of success that his firm laid out,
Jim was financially successful, but he was burned out
and was not enjoying his work. The thrill was gone. Jim
had over 500 clients and was, in his words, “running
around like a chicken with his head cut off.” He
knew he had to rethink and then remodel his business or
he would completely lose interest.
He
was ready for a full scale transformation of his business.
I helped him envision the ideal outcome and evaluate the
best way to make them happen. Most of all I gave him permission
to change and a track to run on to build a super profitable
business and a wonderful life.
Jim
was interested in our coaching program from the beginning.
He says, “One of the key things that intrigued me
with the Effort-Less Advisor Coaching Program was the
title. The idea of becoming an Effort-less Advisor really
appealed to me. I didn’t want to make financial planning
any more difficult than it needs to be.” Jim did
his homework and felt we were the best fit for the transition
he wanted to make.
“When
I started the program I had about 500 clients. I literally
transformed my business over the last 18 months. I now
have only 185 great clients.”
The
Catalyst for Change
Here
is the story of how Jim became an Effort-less Advisor.
Jim
describes himself as, “one of those people who is
never satisfied. When I’m working, I’m trying
to improve and do better with what I already have. I always
want to get better and better and better. As soon as I
complete the top five things on my top ten list, I add
five more.” Jim is a consummate student of personal
and business development. He counts Dan Sullivan, Nick
Murray, Bill Bachrach, Steven Saenz and myself as major
influencers on his thinking.
Jim
has always believed that customer service is the key to
building a great financial advisory business. In his words,
“We focus a lot on client service. When someone calls
up and is upset, frustrated or needs something, that’s
when client service can make or break the success of that
relationship. It either gets stronger or starts to unravel.”
Jim
had a client-service coordinator who was supposed to be
doing many of the job functions that Jim ended up having
to do. He felt this was an important area that gave him
an opportunity to reinforce his relationships and could
not be ignored in his practice. In today’s difficult
environment Jim realized that he had to have a very streamlined,
efficient business model, where investment professionals
can justify their compensation, based on tangible value
to the clients. There is no margin for fat.
Making
the Leap
Jim
used the Effort-Less Advisor Coaching Program to focus
his thinking and actions. By going through our five step
process, he systematically identified and made decisions
on his most important business and marketing issues.
One
of the first things Jim did was help his client-service
coordinator get a new position with another advisor. Then
he brought in an experienced colleague into his practice.
She doesn’t like to market or sell but she enjoys
financial planning. Jim brought her in to compliment his
skills and round out the team. She does financial analysis
and plans and helps manage the practice. This allows Jim
to focus on his relationships with clients, centers of
influence and prospects.
“I
give Gina the forms and we discuss the situation. I tell
her what I want to do, then she puts it all in the computer
and prints really great presentations. I’ve got a
senior para-planner, Luisa, who’s been with me for
six years. She does all of my trades, and processes paperwork,
handles problems directly with the home office, and then
makes me look good when I get in front of the client.
I know that everything is running smoothly.”
Jim
then restructured his business. With the processes in
the Effort-Less Advisor Coaching Program, he determined
exactly who he wanted to serve, refined his business model
to add more value for his ideal clients, reorganized his
staff, converted many of his best clients to fees, sold
off his least profitable 300 clients and moved his office.
Jim
segmented his client base into A, B, C and D clients.
He analyzed his income distribution. He decided that only
about 150 clients fit his ideal or minimal acceptable
profile. He wanted to keep an additional 35 because their
were, family, friends or special situations. He made a
conscious choice of which clients to keep and which ones
he had outgrown. Jim sold over 300 clients to another
advisor who was still growing his practice.
In
a typical advisors’ practice, the bottom 60% of their
client base only generate about 4-5% of their income.
But it commonly represents up to 80% of their service
work. Jim realized fewer clients created a better business
model.
“I
put together a spreadsheet of what these clients had generated
in GDC over the last two years. I sold it for that amount,
in cash. I helped make the transition. And within six
months, the other advisor and I don’t even talk about
the clients anymore. But I am still coaching him on his
business.” So he not only got rid of a tremendous
service and compliance burden, he actually made money.
“As
far as I know, he hasn’t lost any clients. And I
haven’t heard any complaints or issues from my old
clients. So I have to believe it’s a win, win, win
decision.
My
optimum is to have 150 clients, and then another 50 of
what I call friends and family. I like to work with people
that are typically 55 and older. My absolute minimum is
$100,000 accounts. My average client, though, has $250,000
in assets. I have a lot of widows, widowers, and divorced
individuals.”
Once
Jim was clear on who he really wanted to work with, he
started to change his behavior with prospects. “I
had a hot prospect that was clearly a poor fit for my
services and my personality. They had $600,000, but were
looking for a money manager that would give them bragging
rights. In the past, I would have tried to close him,
but I could tell that they he and his wife would become
toxic clients real fast. I just gratefully said, ‘I
don’t think I’m the one for you.’ I felt
very good about that because I was very clear on who I
wanted to work with and who I didn’t want to work
with.”
18
Months to Cross the Chasm
He
also converted many of his best clients into fee-based
money management. Jim now has a total of about $75 million
under management. He started 18 months ago with under
$12 million in fee based accounts when the market was
at its peak and now has over $20 million generating annual
fees with the market dropping 25% over that time. Jim
also charges many of his clients annual retainer fees
for other advice and services. Jim helps his best clients
establish a clear vision of their ideal future, a financial
plan, guides them to achieve specific goals, keeps them
on track for retirement, and helps with their vacations
and estate planning concerns. So he’s adding value
in addition to managing his clients’ money.
He
now has fewer clients, a better support staff and spends
most of his time with clients or speaking with them on
the phone. He has added two college interns to his team
and restructured his business to allow him to do the activities
he enjoys most and that contribute the most to his income.
Says
Jim, “The two things I like to do are; 1) talking
with clients and prospects, and 2) solving problems and
handling important financial issues for my best clients.
That’s where I am adding the most value. My staff
takes care of the other aspects, like running the office
and creating the plans. Now, I just have fun, solve problems
and make money.
The
Payoffs
Jim
completely transformed his business to align it with his
signature strengths and with his best clients. By streamlining
his client base, he can focus his efforts where they are
appreciated and compensated. He now has deeper relationships
with fewer people, and makes a greater contribution to
their lives. He also has a lot more recurring income and
a more balanced team.
I
asked Jim to summarize the results he has achieved so
far; “It’s the most difficult market in 70 years
right now. It’s really survival of the fittest. What’s
interesting is over the past 18 months I’ve reduced
the number of my clients by 60% and the stock market has
dropped in half. I’ve moved my office and replaced
one of my most important positions. I have also transferred
many of my best clients to a fee-based money management.
And there has been no decline in my income.”
“In
my world as a financial advisor, this is the time to really
stand up and shine. It is the time to distinguish myself
from the other advisors and brokers. I’m not someone
who is just trying to make money – I’m trying
to help my clients. And I am getting paid to provide this
service.
“So,
what did Steve Moeller and the Effortless Advisor Coaching
Program do for me? It provided a process to get me really
clear and focused on the things I was not clear and focused
on. We now know exactly who we want to work with, the
size of their accounts, and we’re very clear on the
value that we provide to those clients.”
A
Bright Future
When
I asked Jim about his future he said, “All I’ve
really ever done in the last ten years is get my clients
through referrals, and I don’t think I’ll ever
be out of the process.”
“It’s
amazing that even in this difficult market and with all
my changes, I’ve actually stayed flat on my income.
That says a lot. I have to believe that if my income is
flat today, that it’s only going to go up in the
future. I’m only 35. So I can’t imagine what’s
going to happen when I’m 55 – I’m really
going to have this thing figured out.”
“I’m
really comfortable now with the clients I am working with.
But at the same time, we’re still trying to find
those wealthy clients we really like to work with.”
Jim’s
in the process of building a new marketing program with
his step-father. His step father has been an institutional
portfolio manager for 27 years. He is retiring from the
institutional side, and will be joining Jim in his practice
and offering his services to clients with a minimum of
$1,000,000. By working together, they will be able to
share in the equity build-up. “Our goal is in the
next three years is to bring in 100 clients with a million
dollar minimum each,” asserts Jim.
Advice
to Readers
I
asked Jim what advice he had for our readers who are trying
to become Effort-less Advisors. He said, “Always
remember that it takes time, it doesn’t happen overnight.
I’m starting to see the fruits of my labor after
18 months. It just takes time and effort.”
“If
you’re not willing to be in this business for the
next 5 to 10 years, don’t do it. If you are, take
the time to follow the Effort-Less Advisor process. Do
it right and it will come back to you in spades.”
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