Early in my career, I spent lots of time writing business plans for various managers. Frankly, I don’t know if they were really helpful to me or to them but I did spend hours with graphs and charts, trying to create a document that they would find insightful or at least “pretty” enough to pass for what they were looking for (if they actually read it). After a while, I started paring down the documents, deleting the filler and boiling down the plan from multiple pages and sections to very important highlights. I got rid of the formal business plans, but stuck with the planning. That is why in last month’s webinar, Plan for a Breakout 2017, I don’t think I ever suggested advisors create a business plan – but I did say they should plan.
2017 – an inflection point?
The advisory business is at an inflection point. We’ve all dealt with challenges to running our businesses and the volatile markets before, but today, the challenges are compounded by outside forces such as the DOL Fiduciary rule and its associated compliance work; the evolution of robo advisors to virtual advisors, led by well capitalized and brand name firms like Vanguard and Schwab; and last (but not least), the question of fee compression and transparency. Add those to technology advances, the aging advisor and the coming generational shift, I believe we will see more changes in the next 5 years than we saw over the last 30. And advisors who don’t have a plan for these changes may not be around to see them.
There are three elements of a successful plan:
- Market positioning: Start with a SWOT analysis and end with action steps to review your value proposition, client segmentation (using personas), communication and online presence
- Business analysis: Review your role as a client manger or investment manager and the benefits of solo practice vs. ensemble practices
- Practice management considerations: Look at fees, costs and the profitably of your business and services, as well as technology/workflows, to understand the vision of your firm and the services for the future.
Our webinar attendees received a strategic planning guidebook, a worksheet to help better target prospect segments, and 2 templates for SWOT analysis and client profitability calculations. (Miss the webinar? You can still get the Competitive Advantage toolkit. )
What about you?
As I said, I am not a big fan of long business planning documents, but I am a big fan of planning for the future. Business plans sit in a desk or in a file on a computer. What I like is to see a living plan – one that looks to the future and is shared with your staff, key stakeholders and even your spouse. A plan that is real and objective about your strengths and weakness.
How are you getting ready for the next 5 years. Are you making a plan?