Strategies Advisors Can Use to Generate Profit

Stories about new businesses making fast money are few and far between. Granted, there are success stories out there, but what they usually have in common is plain hard work. It is a challenge for any business, especially a new one, to make a profit. But financial advisors who create a road map to profit and systematically achieve a series of small goals can reach their larger goal of strategic growth.

First, break down the revenue from the financial planning, assets under management and related services you provide. After expenses, such as compliance and custodian fees, payroll and taxes, what remains is your profit margin. This is an important number whether you experience rocketing growth or close up shop.

After taking these steps, financial advisors who are eager to learn how to make a profit in business should make these moves.

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Ask Yourself the Hard Questions

Are there things that are keeping you from making the money you know you can earn? Is this a sales and marketing issue, or are you unclear on how to solve your ideal client’s problem? Is the leadership team lacking key skills? Are you holding on to services that are no longer supporting your firm’s growth? Are limiting thoughts holding you back? After discovering the roadblocks that are keeping you from increasing your profit, seek out personal or professional coaches to help you move past them.

[Read: Financial Advisor Versus Financial Planner: What’s the Difference?]

Find Areas for Incremental Growth

New ventures and even looking differently at existing ventures can be exciting. But if you are focused only on the end goal, the process can also seem overwhelming. Achieve incremental growth with a steady plan to increase profit. A business road map will allow you to envision what you can do today, this week or next month to begin to improve your profit ratio.

Leverage Your Network

Building connections is a critical component of business success. Anyone can crunch numbers and manage a business, but who do you have in your camp to help you expand your scope? View your network as a collection of key alliances. Build relationships with complementary advisory businesses that serve similar client segments and consider partnering with them for referrals. No one firm can serve everyone, but by nurturing these partnerships, you open the door for a cross-pollination of business efforts.

Identify the Value of Your Services

Profit and good prospective clients go hand in hand. Clients’ perceived value of your services contributes to your bottom line. How well do your services solve the problems of those you wish to serve? In order to add value, you must understand your prospective clients’ lifestyles, tastes and habits. You can then design compelling service offerings to meet their needs. Use market research and remember to track how your ideal client responds, so you can make adjustments.

[Read: What Does a Financial Advisor Do?]

Evaluate Areas for Improvement

If growth is a problem, one area to look at is your sales team or sales process. Do you need to hire employees or revamp your sales strategy? Whether you’re a solo practitioner or have a team, anyone who is enthusiastic about your brand should be spreading your message and giving referrals.

Be Innovative and Strategic

Although there are thousands of financial advisory firms in the marketplace, you can stand out from the crowd. Successful businesses expand on current ideas and follow through on the execution of those ideas. Seeing simple ideas through from start to finish will have more impact than great ideas that are never implemented. Think about your current leads and how you can deliver solutions that make you the best choice.

Engage Your Target Market

Any level of profit hinges on targeting your ideal client. Financial advisors should customize their services to their clientele. If you are working with “rock star women in tech” or physicians and medical professionals, for example, you’ll need to adjust your message to meet their needs.

An obvious way to engage an audience is through your website and social media. Think outside the box as you revamp your approach and consider the trends. Post-pandemic, are there different ways to engage prospective clients? Webinars and education sessions are a great way to attract customers, showcase your expertise and get the word out about your services. Whatever your desired approach, be sure to track those tactics that deserve a gold star and those that should be retired.

Determine a Course of Action

Now that you have identified what’s holding you back, it’s time to make a specific strategic plan to generate profit. Breaking the steps up into a timeline will keep your energy targeted on the right areas. By establishing realistic goals that you can sustain over time, you can start moving the needle toward higher profits.

Monitor Your Progress

Just as you monitor your clients’ progress toward their financial goals, you should also monitor your own results. Determine a set time each week or month to revisit your action plan and monitor your growth. Have you found a combination of tactics that are working well? Holding yourself accountable for meeting incremental goals will help you follow through on your overall strategy for growth.

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