Your Morning Cup of Links: Segment, Know Thyself, and Evolve

After a couple weeks of speaking at conferences and meeting with advisors, I’m finally  back in the office and ready for a coffee break.  It’s also my chance to dig through my emails and rss feeds to find out what’s being talked about in the industry’s leading magazines.

From segmenting your client base, to defining your practice and tackling the issue of baby boomer account draw down, here are three articles that are worth a few minutes of your time.

Segment and Target for Success – Investment News (Free publication; requires registration to view content)
You’ve heard me make the case for segmentation in the past. In this article, you’ll learn why seasoned advisors, and even new advisors, should be selective about which clients they bring on board. The author suggests that you’ll have a higher level of professional satisfaction, but also a more profitable practice. To me, that’s reason alone why you should read it.

What Type of Advisor Are You? –
Citing research from Cerulli Associates and IMCA, Forbes profiles various types of advisors. From investment-centric money managers all the way to high-touch wealth managers, they define the categories by the services delivered to clients.

I encourage you to take a read through the entire article to see where you fall on the spectrum – but  before you do, consider this stat from the study. Wealth managers are more likely to get more referrals – from clients or other professionals, with 55% of new business coming from referrals. Which leads me to ask – are they giving more referrals because they are more satisfied with the breadth of services they receive from their advisor (or “wealth manager”)? If so, shouldn’t we all be focusing on a fee-based, holistic approach?

As Investors Age, Advisors Face a Leaner Future –
And speaking of a fee-based approach, take a few minutes to read this article on what the author calls the investment industry’s biggest challenge of the next decade. As a result of the boomer generation switching from being savers to “spenders,” the article suggests that investment professionals will need to come up with a different compensation model that relies primarily on fees. This isn’t all that surprising.

The key point, and your practice management challenge, is to evolve your practice and explain to your clients why now is the time to start paying you – their financial advisor, the same way that they pay their lawyers and accountants. That sounds like a conversation that needs finesse. How are you approaching this delicate topic? And more importantly, replacing lost revenue?

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.

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