Hitting the Ground Running: Advice for New Advisors

Mar 25, 2014
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“My professor gave me the best advice – that the most important asset I would ever manage would be my career, so I should give it the time, Helpattention, and investment that it deserved.”

–Charlene Li, Founder of Altimeter Group and best-selling author

Late last week, I had a conversation with a newly minted financial advisor. “John” recently started working for a large insurance/investment firm and had just completed his series 6, 63, and 65 licenses. Doing as he had been instructed to do by his manager John called my wife (whom he knows from church), trying to build his network of prospects. As soon as my wife heard what he was doing, she suggested that he and I talk.

I’m not sure what John was expecting when we connected, but you could tell that he was a bit uncomfortable. After a few minutes, I told him about my position at SEI and how I have spent almost 30 years working with advisors. At this point, I am not sure if he was happy that he could talk about building a business, or disappointed that he was not going to get a sale. Either way, we began to discuss how it was going for him as he was beginning to build a business. As you would expect, it’s been tough and he is struggling in his new career.

The need for a niche

John said that his two biggest struggles so far are a lack of direction from his management, and a knee-jerk response from prospects: “I don’t need insurance.” While I can’t help with the manager, I did suggest that we may be able to help with some ideas. (See what I did there? I just added you all into the conversation. You get to help and you can’t back out now; he is counting on you.)

My first bit of advice was to think about his target client or who he wants his target to be. I suggested that the most successful advisors are those who truly understood their niches. Those successful advisors understand what their niche is thinking, they read what their niche is reading, and they communicate with their niche in the ways that their niche communicates with each other. John doesn’t have a niche yet, but he can try to focus on one type of client and he can use that in his conversations. Instead of saying “I work for XYZ firm,” wouldn’t it be better to say “I focus on teachers who are less than five years from retirement,” or “I help parents with young children to balance education, risk, and retirement planning.” It will certainly change the response from prospects who “don’t need insurance.”

Narrowing the field

As far as I am concerned, it wouldn’t have been a successful call unless there was some homework on each of our parts. John’s homework was to sit down and list out the answers to three questions:

  1. Who do I want to work with, or what type of individual do I want my firm to be set up to serve?
  2. What obstacles are those individuals facing? (What are their challenges in reaching their goals?)
  3. What services will I provide to overcome those obstacles?

I told John that if he can answer those three questions, he and I could create a value proposition together that he can start sharing as he begins to build a network. By starting the conversation the right way (with the right audience), he would do much better than trying to be everything to everybody. I also suggested that the value proposition would probably get narrower the longer he is in the business.

Where you come in

My homework from the call was to see if I could collect some other ideas that would help John as he begins his career as a financial advisor. And just like my days at Earlville High, I am going to try to get others to do my homework for me. That, my friends, is where you come in.

Think back to when you got started in the business, what was the best tip or piece of advice that someone gave you? Share it in the comments section below or on twitter, using the hashtag #HelpANewAdvisor. Check back often, hopefully there will be some advice that everyone can use.

Most of this blog’s readership is made up of successful advisors – so share an idea, tip, or story. Go ahead, pay it forward.

 

Reminder: Advisors, you have until mid-April to submit data for the FAInsight survey “Growth by Design.” Firms interested in participating can visit http://www.fainsight.com/#!home. When prompted, indicate “SEI” as your group code. The Growth by Design study is supported by Investment Advisor, FA Insight’s media marketing partner.

Image courtesy of freedigitalphotos.net

 

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John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

Learn More About John Anderson

  • Ronald Mesler

    I really appreciate your sound advice. It is really on point!

  • ryan52403

    Best advice I received: Don’t work at an insurance company. (From someone who, at the time, worked at NWM.)

    He knew me well enough to know that the environment wouldn’t be a good fit for me. I didn’t know the difference between an insurance company and an RIA at the time, but I wouldn’t have lasted six months at an insurance company. Instead I’m now approaching 10 years in the industry, have a CFP, a masters, and a career I intend to be in for the rest of my life. “John” may have the sales personality necessary to grind out the first few years at an insurance company, I did not.

    My advice is to know yourself well and find other people who can help guide you.

  • Kyle

    The best advice I received from the founder of our firm when I started working at age 24 was, “There are plenty of people out there that need financial advice. Be sure to choose people that you want to work with long term.”

    Sure, by choosing not to work with some clients early on in my career I had to live on lower pay but I can definitely say it was very much worth it. I focused building a good fee-based client base and increasing my education.

    Five years later, I have a wonderful group of clients that I work with that value my advice, I have my CFP, and am in the process of starting my own RIA. I can definitely relate to “John” having a hard time starting out but if you are able to live lean in the first few years and determine exactly what you want your business to look like it will make a difference in the long run. Hang in there John and keep learning!

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