When financial advisors start their own firms, it’s a time of excitement intertwined with fear of the unknown. Navigating this new terrain doesn’t have to cause anxiety, but you should know what comes with this new level of responsibility.
If you’ve given up a steady paycheck to become a new owner, all of a sudden the buck stops with you. Here are eight tips to help newly independent financial advisors find their footing.
Set Concrete Goals
Nothing you accomplish as a new business matters much without specific goals. Setting goals makes all the other business planning easier. Ever wonder how some financial advisors seem to have the magic touch and others don’t? The difference is their ability to set goals.
It’s harder to get lost if you have set goals you’re pursuing. Your goals should be both short-term and long-term to build momentum as your business grows.
Believe in Yourself and Your Firm
This is easier said than done sometimes, as imposter syndrome can affect anyone. It makes a world of difference when you believe that both you and your company can provide the best services for your clients. Trust in your skills and the difference your business can make to clients. Success is dependent first on your belief in yourself and your ability to deliver.
Know Who Your Target Clients Are
Amazon may get away with marketing to everyone, but you won’t. Most newly independent advisory firms have limited resources to market themselves. Taking the time to evaluate who you’d like to work with will make your marketing activities more targeted and impactful. You should be able to describe your ideal client, including demographics (age, gender and profession) as well as psychographics (values, desires, goals, interests and lifestyle choices).
If you decide to specialize in a niche market, it will make targeting your perfect client that much easier. Financial advisors who narrow their client focus usually get more business. One caveat: If you are just starting out and don’t have an established book of business that has moved with you, it makes sense to work with enough clients to meet your financial obligations, even if they aren’t always your model clients.
Be Ready to Market Yourself
If you give in to fears of rejection or putting yourself out there, you will do yourself a big disservice. Now you are part financial advisor, part salesperson tasked with marketing your services. If you’re a solo shop, you need to get in front of as many prospective clients as possible.
Marketing and related activities don’t come naturally to everyone, so work with a marketing professional to formulate a plan to promote yourself.
Build a Prospective Client List Beyond Family and Friends
There is no embarrassment in working with family and friends. In fact, many new financial advisors get their start this way. The family-and-friends pipeline tends to dry up quickly, though, so building a prospective client list outside these groups is a good idea. Staying in business requires a steady inflow of new prospective clients, and you’ll need a solid marketing strategy to keep your sales funnel full.
Understand Your Clients’ Needs Better Than They Do
Most financial firms say they provide high-quality, customized service, but often they don’t have a clear vision of how to customize their services for their clients. Assumptions are made as to what clients really want, and financial advisors miss the opportunity to establish a profitable, long-term relationship. Newly independent financial advisors who understand their clients’ needs beyond investing can help them plan for milestones such as retirement, college, travel and weddings. This keeps you close to what matters most to them.
Show your clients that you will help meet their needs and also empower them to evaluate their financial lives. Think about how you will meet your clients’ needs and help solve their problems before they’ve even expressed them to you.
Know the Difference Between Working on Your Business and Working in It
Working in your business involves everything you do to manage the activities of your firm and the execution of tasks that meet goals. This includes conducting client meetings, analyzing financial plans, running retirement projections and anything else that’s related to the delivery of your services.
Working on your business, however, includes anything strategic, such as planning for the business, working with a business coach, creating a marketing strategy, selling to your ideal client and making decisions that support the company’s vision.
Many newly independent advisors focus entirely on working in the business and not on it. Why is the distinction important? Working on your business keeps you close to why you launched your advisory practice in the first place, reminds you where you want the business to go and keeps your ability to course-correct sharp.
Practice Makes You Experienced, Not Perfect
Financial advisors who are newly independent cannot let themselves be paralyzed by the fear of making a mistake. You will not learn the ropes until you dive in. The most successful advisors know perfection doesn’t exist and are not afraid to let experience be their guide. After enough experience stepping out and testing the waters, new financial advisory firms figure out their best path and how to set themselves up for success.
More from U.S. News