building and growing your practice

8/8/2019 Building and Growing Your Practice

http://slidepdf.com/reader/full/building-and-growing-your-practice 1/28

Building and growing yourindependent practiceFUNDAMENTALS OF OWNERSHIP

Whether you’re just getting started building

your independent practice or seeking new

ways to grow and expand, this paper offers

the basics of structuring a business, insights

into industry best practices, and creative

ideas to help reach new clients and grow

your business.

3 Getting started

11 Getting down to business

19 Sustaining momentum,

accelerating growth

Member FINRA/SIPC

THE REWARDS OF INDEPENDENCE



3 Getting started

3 Choosing the business structure and model that’s right for you

8 Determining your niche

10 Discovering your best fit

11 Getting down to business

11 Your blueprint for success

13 Elements of a business plan

14 Location, location, location

14 Home office pros and cons

15 Projecting the right image

16 Your network can provide a competitive edge

19 Sustaining momentum, accelerating growth

19 Run your practice so it doesn’t run you

20 Making a name for yourself through marketing

25 Best practices for sustained growth and development

Contents

2 BUILDING AND GROWING YOUR INDEPENDENT PRACTICE



Getting startedLike a house or other lasting structure, businesses are built from

the ground up, upon a strong foundation. The long-term success

of your independent practice will rest on the framework you

build today. Every decision you make, from office location to the

broker/dealer you choose, and marketing tactics you employ,

will have a significant impact on your success.

Your business structure and market niche are the foundation and

framework of your practice. From there, you can add on, enhance oreven downsize as you choose. Most importantly, a strong foundation

will support an equally strong succession plan, helping you to

eventually reap the equity you have built.

Choosing the business structure and modelthat’s right for you

One of the first decisions you will make as an independent business

owner is how to structure your company.

You will want to take the following into account:

■ Overall vision for the size and scope of your business

■ Level of desired control over the business

■ Level of structure you are willing to work within

■ Liability or vulnerability to lawsuits

■ Tax implications of the various ownership structures

■ Anticipated profit (or loss) of the business

■ Reinvestment of earnings into the business

■ Need for access to cash generated by the business for yourself,

partners or staff

BUSINESS BUILDING TIPEach business structure presents unique

tax, liability and succession-planning

implications. It’s advisable to consult

with an accountant and an attorney

when choosing the most advantageous

form of ownership for you.

3




The U.S. Small Business Administration cites the following five primary

business structures:

Sole proprietorships

The majority of small businesses begin as sole proprietorships. One

person, usually the individual who has day-to-day responsibilities for

running the business, owns such firms. Sole proprietors own all the

assets of the business and the profits generated by it. They also assume

complete responsibility for its liabilities or debts. In the eyes of the law

and the public, you are one and the same with the business.

Advantages of a sole proprietorship

■ Sole proprietorships are the easiest and least expensive form of

ownership to organize.

■ Sole proprietors are in complete control and, within the parameters

of the law, they may make decisions as they see fit.

■ Sole proprietors receive all income generated by the business to

keep or reinvest.

■ Profits from the business flow directly to the owner’s personal

tax return.

■ The business is easy to dissolve, if desired.

Disadvantages of a sole proprietorship

■ Sole proprietors have unlimited liability and are legally responsible

for all debts against the business. Their business and personal

assets are at risk.■ Sole proprietors may be at a disadvantage in raising funds and are

often limited to using funds from personal savings or consumer loans.

■ Sole proprietors may have a hard time attracting high-caliber

employees or those that are motivated by the opportunity to own

a part of the business.

■ Sole proprietors may not directly deduct from business income some

employee benefits such as owner’s medical insurance premiums (only

partially deductible as an adjustment to income).

■ Employment tax forms




Partnerships

In a partnership, two or more people share ownership of a single

business. Like proprietorships, the law does not distinguish between

the business and its owners. The partners should have a legal agree-ment that sets forth how decisions will be made, how profits will be

shared, how disputes will be resolved, how future partners will be

admitted to the partnership, how partners can be bought out and what

steps will be taken to dissolve the partnership when needed. It’s hard

to think about a breakup when a business is just beginning, but many

partnerships split up in times of crisis and, unless there is a defined

process, there may be even greater problems. They must also decide

up-front how much time and capital each partner will contribute.

Advantages of a partnership

■ Partnerships are relatively easy to establish; however, time should

be invested in developing the partnership agreement.■ With more than one owner, the ability to raise funds may

be increased.

■ The profits from the business flow directly through to the partners’

personal tax returns.

■ Prospective employees may be attracted to the business if given

the incentive to become a partner.

■ The business will usually benefit from partners who have comple-

mentary skills.

Disadvantages of a partnership

■ Partners are jointly and individually liable for the actions of the

other partners.

■ Profits must be shared with others.

■ Since decisions are shared, disagreements can occur.

■ Some employee benefits are not deductible from business income

on tax returns.

■ The partnership may have a limited life; it may end upon the

withdrawal or death of a partner.

5




Types of partnerships

General partnership Partners divide responsibility for management

and liability as well as the shares of profit or loss according to their

internal agreement. Equal shares are assumed unless there is a writtenagreement that states differently.

Limited partnership and partnership with limited liability Limited

means that most of the partners have limited liability (to the extent

of their investment) and limited input regarding management decisions.

This generally encourages investors interested in short-term projects

or investing in capital assets. This form of ownership is not often

used for operating retail or service businesses. The process of forming

a limited partnership is more complex and formal than that of a

general partnership.

Joint venture Acts like a general partnership, but is clearly for a limited

period of time or a single project. If the partners in a joint venture repeat

the activity, they will be recognized as an ongoing partnership and will

have to file as such and distribute accumulated partnership assets upon

dissolution of the entity.

Corporations

A corporation chartered by the state in which it is headquartered is

considered by law to be a unique entity, separate and apart from those

who own it. A corporation can be taxed, it can be sued and can enter

into contractual agreements. The owners of a corporation are its

shareholders. The shareholders elect a board of directors to oversee

the major policies and decisions. The corporation has a life of its own

and does not dissolve when ownership changes.

Advantages of a corporation

■ Shareholders have limited liability for the corporation’s debts or

judgments against the corporations.

■ Generally, shareholders can only be held accountable for their

investment in stock of the company (officers can be held personally

liable for their actions, such as the failure to withhold and pay

employment taxes).

■ Corporations can raise additional funds through the sale of stock.

■ A corporation may deduct the cost of benefits it provides to officers

and employees.■ Corporations can elect S corporation status if certain requirements

are met. This election enables company to be taxed similar to

a partnership.




Disadvantages of a corporation

■ The process of incorporation requires more time and money than

other forms of organization.

■ Corporations are monitored by federal, state and some local agencies,

and as a result may have more paperwork to comply with regulations.

■ Incorporating may result in higher overall taxes. Dividends paid

to shareholders are not deductible from business income; thus, a

corporation can be taxed twice.

Subchapter S corporations

A tax election only; this election enables the shareholder to treat the

earnings and profits as distributions and have them pass through directly

to their personal tax return. The catch here is that the shareholder, if

working for the company, and if there is a profit, must pay him/herself

wages, and must meet standards of “reasonable compensation.” Thiscan vary by geographical region as well as occupation, but the basic rule

is to pay yourself what you would have to pay someone to do your job,

as long as there is enough profit. If you do not do this, the IRS can

reclassify all of the earnings and profit as wages, and you will be liable

for all of the payroll taxes on the total amount.

Limited Liability Company (LLC)

The LLC is a relatively new type of hybrid business structure that is

now permissible in most states. It is designed to provide the limited

liability features of a corporation and the tax efficiencies and operational

flexibility of a partnership. Formation is more complex and formal than

that of a general partnership.

The owners are members, and the duration of the LLC is usually

determined when the organization papers are filed. The time limit can

be continued, if desired, by a vote of the members at the time of

expiration. LLCs must not have more than two of the four charac-

teristics that define corporations: limited liability to the extent of assets,

continuity of life, centralization of management and free transferability

of ownership interests.

Source: U.S. Small Business Administration: www.sba.gov

7




Determining your niche

As a successful financial advisor, you already know how difficult it is to

be all things to all people. Choosing to specialize will allow you to use

your time more effectively and serve your clients better. It can also be

key to differentiating your practice and providing a competitive edge in

your local market or region.

Finding balance

Choosing a niche doesn’t mean you have to focus on a single area and

never branch out from there. Even the most resolute purists understand

that when dealing with people and providing solutions to their financial

challenges, there is bound to be some degree of market crossover. You

don’t want to define your market so tightly that you’re turning away

lucrative business — you want to maintain a high degree of specialization

for the purpose of differentiating your practice.

Before developing your business plan, it’s important to think through

and determine how narrow or broad a market niche you want to serve.

This will have an impact on how you promote and market your practice

and how large or small a marketing budget is required. It will also

have an impact on and help determine your networking activities, the

amount of travel required to attend local and out-of-state conferences

or speaking engagements, and your office location.




Below are examples illustrating how choosing a primary niche allows

you to expand or narrow your scope from a broad cross-section of your

population to a very focused subsection of that population. When

starting out, many advisors will choose a more narrow focus, expandingthat focus, as new business is generated and additional expertise is

brought on board.

NicheAreas of

specializationServices

Wealth

managementCPAs

Taxation analysis:

HNW clients

Sudden wealth

planning

Private client

services

Attorneys

Divorces:

Divison of assets

Trust and

estate planning

Structured

settlements

Business ownersManufacturing

plant owners

Employee

benefits

Business interruption

insurance

Liability

insurance

DoctorsLife and disability

insurance

Retirement income

planning

Succession

planning

Restaurant

franchise owners

Employee

benefits

Succession

planning

Tax

planning

Orthopedic

surgeons

Malpractice

insurance

Retirement income

planning

Succession

planning

9




Discovering your best fit

Regardless of the career you choose, specialists tend to be more

successful than generalists, and for good reason: When it’s time for

knee surgery, you want an orthopedic surgeon who specializes in that

area. Your clients are looking for the same level of expertise in their

financial advisor.

CEG Worldwide, a leading provider of strategic research for

financial professionals, conducted a comprehensive survey of

2,094 financial advisors with a minimum of $50 million in assets who

had been in business for at least five years to identify certain success

factors. Among the group of advisors deemed most successful

(those with incomes of $300,000 or more), nearly half (45.7%) said

they specialized in a specific area.

People are often willing to pay more for services from a specialist, for

a variety of reasons that include the presumption of experience, a higherlevel of education, certification or training requirements, as well as

prestige and assumed value for the dollar.

Often your own background is the best place to look when determining

your specialization. If you were an attorney prior to becoming a financial

advisor, estate planning may be a natural fit. An accountant might

gravitate toward tax planning, while a former professional athlete might

parlay his or her experience and contacts into a lucrative specialty.

Hobbies and community or civic interests represent other areas for

specialization. Whatever direction you choose, the more interested and

knowledgeable you are in a given area, the more confident and competent

you will become.

BUSINESS BUILDING TIP

Clients like to deal with advisors who

understand their business or lifestyle.

Specialization can enhance your ability to

quickly develop a repeatable book of

business by focusing on and promoting

within a given market or niche and

becoming the local “go-to” expert.




Getting down to businessBuilding a successful practice requires a foundation of careful

planning and well-informed decision making early in the process.

The following section highlights key components of business

ownership and what to consider when going out on your own.

Your blueprint for success

Your business plan is your blueprint for success. It’s a process that

forces you to think through all the various elements of your practice,

including location, resources, equipment, staffing, support services

and marketing strategy. And it’s a tool for measuring and monitoring

your progress and making necessary corrections along the way.

While it’s nearly impossible to run a successful independent practice

without a documented business plan, developing your plan doesn’t

have to be overwhelming or unnecessarily time consuming.

Financial advisors are some of the most proactive, motivated,

detail-oriented and accomplished individuals in any profession.

So why do so many procrastinate when it comes to developing

a business plan? Two reasons: Most people simply don’t knowwhere to begin, and many people overcomplicate the process.

BUSINESS BUILDING TIPSimilar to the plans you develop for your

clients, a solid business plan will not only

help you achieve your life goals, but

propel your practice forward.

11




Write it down

Your business plan is your dream on paper. You’ve spent countless

hours over the course of months, if not years, dreaming the dream and

planning your ideal practice. Now get it down on paper.

What is your goal or mission?

Who are your ideal clients?

Where will you find them?

What will your office look like?

Where will it be located?

Who will you partner with?

Who will you hire?

How will you structure your fees?

What will you require in the way of broker/dealer support?

Keep it simple

Follow these easy steps in developing your business plan:

1. Get help

Use your time and resources wisely. There’s no reason to recreate

the wheel when most broker/dealers and dozens of Internet sites offer

free business plan templates you can easily download and populate.

■

Microsoft Office Online offers more than half a dozen free businessplan templates as well as online guides for building a plan.

■ Your local library offers general business plan guides and books

targeting business development specifically for financial advisors.

2. Make it clear, not complex

Use simple, clear and direct language, enabling potential investors,

partners or employees to quickly and easily understand your goals and

objectives, and the strategies and tactics for accomplishing them.

3. Be honest and realistic

Are your income estimates overblown? Are expenses unrealistically

low? Are time frames inadequate? Do you have the experience,expertise and resources to carry out all facets of the plan?

No matter how motivated or enthusiastic you are about getting your

business up and running and achieving your goals, an unrealistic plan

is a virtual house of cards, ready to fall apart at a moment’s notice.

When your plan and your projections are realistic and sustainable,

you create a path to achieving your goals. A good business plan will

help you capitalize on your strengths and improve any areas of

weakness over time.




4. Make sure all your activities are tied to specific goals

When writing your plan, make sure all activities and action items listed

can support specific goals. If they don’t — consider eliminating those

activities from your plan.

5. Seek feedback

Ask a trusted mentor or colleague to review your plan and provide

objective and candid feedback. If he or she finds certain areas vague,

confusing or misleading, chances are an investor, partner or employee

will too.

Elements of a business plan

All business plans should include the following components:

■ Title page including business name and date

■ Executive summary

■ Company description

■ Organizational structure

■ Mission statement

■ Industry assessment

■ Business opportunity assessment

■ Fee/compensation structure

■ Target audience(s)

■ Competition/Marketplace analysis

■

Value proposition■ Key differentiators

■ Marketing plan

■ Operations and logistics assessment

■ Profit and loss statement or projections

■ Budget or other financial data

Lengthy or more complex business plans may include these optional

components:

■ Table of contents

■ SWOT analysis (statement of strengths, weaknesses, opportunities

and threats)■ Appendix — for reference and support documentation

■ Disclosure statements

■ Privacy statement


Save time while accessing expertise.

Take advantage of your broker/dealer’s

dedicated business development

personnel and resources, such as

online tools, templates and one-on-one

consultation and guidance.

13




Location, location, location

First impressions count, and your office is often the first encounter

your clients have with your firm. Your office location, environment and

decor speak volumes. While a strong first impression doesn’t necessarily

mean going all out to create an atmosphere of high-tech glitz and

glamour, your office should reflect your brand, values and personality.

There are a number of considerations when choosing your office location.

■ Is it affordable?

■ Should you buy or lease?

■ Is it convenient for your clients?

■ Does it provide adequate parking for clients and employees?

■ Is the building or structure compliant with the Americans with

Disabilities Act (ADA)?

■ Does it offer adequate space for private meetings?

■ Is it a secure building and location? (Both your clients and employees’

personal security and the security of files and computer equipment

housing sensitive data should be considered).

Home office or retail space?

Many financial advisors choose to operate their practices out of a home

office. This can be an economical option, but should be carefully

evaluated. There are a number of pros and cons to doing business out

of your home.

Home-based advisors often choose to conduct client meetings in more

neutral territory — a business club, executive office suite, coffee shop

or over lunch.

Home office pros and cons

■ No commute or transportation costs

■ No monthly lease

■ Convenient

■ Tax advantages/home office deductions

■ 24/7 access to client information and files

■ Inadequate space for staff and equipment

■ Does not meet ADA standards or lacks handicapparking and/or restroom access

■ Not enough separation between work and home;

work time bleeds into family/personal time

■ No separate client entrance or waiting room

■ Distractions from children/family members

Pros Cons




Projecting the right image

The image your office projects from the parking lot to the waiting room,

offices and conference room should be consistent with your brand

message. A casual, fun space can be every bit as professional as a

formal space.

Every detail from the signage on the building, the type of magazines in

the waiting room, color of the walls and furniture will influence your

clients’ feelings about you and the type of services and experience they

should expect.

Consider the following when setting up your office. And every few

months, spend some time walking through your office, taking a critical

and objective look at your environment:

■ Is your waiting room warm and inviting?

■ What do the furniture, lighting and artwork say about you and yourfirm? Are you all business or do you want clients to know something

more about you, like a love of sailing or rock climbing, reflected

through photos?

■ Is reading material available? If so, are magazine selections strictly

financial, travel and lifestyle, sports or a combination? What do you

want clients to be thinking about or focusing on while they’re waiting?

■ Is there a TV or LCD screen in the waiting area? If so, to what channel

is it tuned? Do you make the remote available to clients or maintain

control over what you want them to see?

■ If you have a receptionist, is his or her computer monitor and work

hidden from the client’s view?

■ Are bathroom, kitchen or equipment areas easily viewed from the

waiting area or conference rooms?

■ Are walls, floors and bathrooms clean and free from scuff marks?

■ Is furniture clean and free from stains, scratches or tears? This is

equally important in your offices and conference rooms.

■ Are drapes and blinds uniform and fully functional?

■ Are all client-facing areas free from clutter and piles of paperwork,

which would give an impression of disorganization?

■

And don’t forget to establish rules around the use of the microwavein your kitchen or break room. Strong odors from fish or popcorn have

a way of lingering in carpeting, drapes and upholstered furniture.


Listen to what your clients tell you about

your office space and location. Do clients

remark on the ease or difficulty of findinga parking space? Do they compliment

you on the decor or layout? If you’re not

receiving any unsolicited feedback from

clients, ask for their opinions and take

them into consideration.

15




Your network can provide a competitive edge

Clients want their advisors to be professional, considerate of their time

and trustworthy. Most of all, they want you to be knowledgeable and

resourceful. No one expects you to have all of the answers all the time.

Most of your clients are competent professionals in their own right and

they respect and appreciate your need to consult with other experts.

Satisfy needs and solidify client relationships

Your clients have needs across multiple financial disciplines, some of

which may fall outside of your core competencies. These often include

services in the following areas:

■ Tax

■ Accounting

■ Legal

■ Divorce

■ Health/medical care

■ Employee benefits

■ Mortgage

■ Real estate

■ Credit

Become your client’s general contractor

A general contractor on a construction project subcontracts to profes-

sionals with specific skill sets for one reason: He can’t do it all well and

efficiently. Plumbers, electricians and bricklayers all possess specific

skills, credentials and licenses that make them qualified craftsmen. By

coordinating his team of handpicked, qualified and reliable professionals,

the general contractor can efficiently and effectively get the job done

for his client.

It’s no different in the financial world. You can help a client find a com-

petitive rate on a jumbo mortgage, but a professional mortgage broker

can save you both considerable time and labor while tapping into his or

her specialized network and resources.

As your client’s general contractor, it’s important to surround yourself

with experts, forming a network of expertise to benefit your clients and

your bottom line.


Developing strategic partnerships with

professionals across multiple disciplines

can give you an edge in meeting a broader

range of client needs and maintaining

your position as your client’s most

trusted advisor.




Top reasons to develop a solid network of experts

1. Become your clients’ single and most-valued resource for all their

financial advice.

2. Eliminate the potential for miscommunication of your recommenda-

tions when your clients act as intermediaries.

3. Close gaps in service or your firm’s expertise.

4. Foster communication and dialog among your clients’ outside

advisors and remain apprised of all client activity.

5. Ensure financial recommendations and strategies are aligned with

your clients’ tax and related financial needs and activities.

6. Save clients valuable time.

7. Increase referrals.

Building your network from the ground up

Professional alliances are usually cultivated over several years of formal

and informal networking. While it’s not unusual to discover an accoun-

tant who shares your views on client servicing at a neighborhood

gathering or at the gym, it’s generally easier to locate multiple experts

through industry associations, Internet sites and events.

Many national organizations also have local chapters. Typically, contact

information and direct links to local chapters’ websites will be listed on

the organization’s national site. Many sites offer searchable directories

enabling you to locate individuals in your region or zip code, search by

area of specialization or verify credentials.

17




Develop your own dream team

Your practice focus and niche will help determine the types of specialized

resources needed on your team. Your core group of interdisciplinary

partners will generally include several of the following professionals:

The preceding is by no means a definitive list of specialty areas. An

advisor focusing exclusively on small dental practices may want to

cultivate a relationship with an attorney experienced in handling

dental malpractice suits, and a risk management specialist well versed

in malpractice and disability insurance. Your area of specialization

and depth of talent and staff resources will dictate the team of experts

needed to complement your expertise.

Discipline Practice focus

Accountant/CPA High net worth individuals

Small to midsize businesses

Attorney Estate planning

Divorce

Real estate

Banker Trust officer or family office

Mortgage loan officer

Employee benefits specialist Health care/medical/dental

Corporate retirement plans

Workers compensation, disability insurance

Insurance/risk management specialist Individual life and disability

Corporate/small business insurance

Real estate agent High net worth individuals

Relocation specialist

Mortgage loan officer




Sustaining momentum,accelerating growthWithout the appropriate resources and support, running your

own independent practice can be complex and time consuming.

In addition to client servicing and new business development

activities, you’re now responsible for staffing and managing,

marketing, process mapping, equipment maintenance and

technology support and other aspects of business management.

So why have more than 89,000 financial advisors chosen

independence?* A leading reason, according to a Tiburon StrategicAdvisors study, is improved quality of broker/dealer support.**

In addition to potentially higher payouts, the freedom to determine

your own business model, and unbiased investment platforms,

financial advisors have flocked to independent broker/dealers

seeking stronger support in the areas of business development and

practice management.

Run your practice so it doesn’t run you

Most top producing advisors juggle multiple roles as asset gatherers,

asset allocators and asset managers. The role of business owner and

manager, however, demands a different skill set. One of the first thingssuccessful business owners learn is how to delegate and outsource.

REASONS FOR LEAVING PREVIOUS

BROKER/DEALERS**

*Source: Cerulli Associates, Inc., 2007.

**Source: An Initial Overview of the Independent Reps and Independent

Broker/Dealer Markets, Tiburon Strategic Advisors, LLC, 2008

39%36%35%

32%

17% 17%15%

10%

3%

Quality of home office services

Payout levels

Inadequate technology at current broker/dealer

Support for fee-based business

Management change

Quality of proprietary fee-based programs

Back-office planning services

Broker/dealer acquisition

Location/geographic move

19




Choosing the right broker/dealer is crucial to your success

For motivated individuals and high achievers, it can be difficult to

grasp the fact that sustainability relies on your ability to recognize

your limitations. You can’t do it all and remain in business.

That’s where the right broker/dealer can play a significant role

in providing:

■ Transition services and office set-up

■ Assistance in business plan development

■ Practice management consulting services

■ Formal business development tools and training

■ Marketing programs and promotional tools

■ Coaching

■ Business needs assessments

■ Profitability and expense analyses

Your broker/dealer should have a broad range of tools and resources

available to quickly assess how and where you’re spending your

time and recommend viable solutions for reducing time spent on

nonrevenue-generating activities.

For instance, many advisors quickly learn that spending time researching,

purchasing and installing computer hardware and software eats up

billable hours. These tasks can be done more efficiently and effectively

by experienced freelance or contract technology professionals. And

even some core tasks may need to be delegated to junior staff, part-time

staff or contract staff, including analytical work and investment analysis

to free up your time for client and new business engagements.

Making a name for yourself through marketing

When you are the brand, you begin to see marketing in a very different

light. It’s no longer just about advertisements and prospecting letters.

Your image is reflected in everything you say and do. It’s reflected

in your office space, your stationery, Internet presence and speaking

engagements. The right marketing strategy and tools can help to

articulate your message and value proposition to a broad spectrum of

clients and prospects.

Developing your marketing plan

Marketing is an ongoing process designed to promote you,

your brand and the services you offer through:

■ Articulating your value proposition

■ Creating a need for your services

■ Attracting the right leads and prospects

■ Turning leads into clients

■ Retaining existing client relationships

■ Increasing referrals




A single approach or strategy will not achieve all of your goals. The

tactics you employ to market yourself and your services to prospects are

very different from the approach used to retain existing clients. The

common thread is consistent brand messaging and the value you bringto clients.

Your marketing plan is a subsection of your business plan. Developing

your marketing plan and mapping out your strategy will help you save

money and time, and achieve better results.

Your marketing plan should include the following elements:

■ Executive summary

■ Market or SWOT analysis

■ Audience analysis

■ Marketing objectives

■

Strategic alliances and partnerships■ Budget

■ Action plan and tactics

■ ROI measurement and analysis

Public relations

Many financial advisors have experienced great success through public

relations (PR) efforts. Unless you have a very large marketing budget,

it’s generally not feasible to hire or retain dedicated PR resources.

Nonetheless, grass roots efforts can be very effective if approached

properly. Consider these guidelines when launching your PR initiative:

■ Cultivate relationships with editors and journalists at local publications,

offering your services as a subject matter expert.

■ Make yourself available to editors and journalists; if you’re repeatedly

hard to reach, you may be dropped from the list.

■ Remember that anything you say can potentially appear in print —

there is really no such thing as “off the record.”

■ When targeting publications, determine if their audience fits your ideal

client profile; if not, find other outlets.

■ Make sure your story or idea is truly newsworthy — does it have

a unique angle or hook? Is it timely? Does it respond to a current

market need or event?

■ Don’t routinely send press releases to publications announcing new

hires or new clients unless they have a specific section for that

information; otherwise, you run the risk of newsworthy press releases

being overlooked.

21




Determining the right marketing tactics for your business

Determining the media mix that provides the best return on your

investment (ROI) can take years to perfect. And just when you do, new

media and tactics are introduced. Yet marketing is crucial, not only tobuilding your business but remaining in business.

To achieve the most cost-effective results, each tactic listed in your

marketing plan should be tied to a corresponding objective, to ensure

that marketing dollars are spent wisely and activities are in line

with goals. If an activity cannot be tied directly to a business goal or

objective, it should be eliminated.

Tracking ROI will help you determine which tactics achieve the greatest

results and which can be eliminated in the future because of weaker

results. The ultimate proof of effectiveness, however, will always be

client growth and retention.

Networking

Effective networking is at least partially responsible for getting you

where you are today. If you’re only networking with peers and strategic

partners to generate referrals, you may be overlooking opportunities to

uncover new client leads. If you’ve chosen a specialty or niche, it’s

easier to define who your ideal client is and how he or she spends both

business and personal time. The deeper you delve into your target client

profile, the easier it will be to determine the events, associations and

organizations you need to attend or join to meet new prospects that fit

your profile.

Seminars and speaking engagements

Educational seminars and speaking opportunities at community, civic

or association events offer an opportunity to showcase your knowledge

and innovative ideas to prospects and clients. Rules of thumb for

effective marketing in this arena include:

■ Keep your message simple.

■ Put your audience at ease with humor; tell an amusing anecdote.

■ Don’t use industry jargon or terms that may intimidate your audience.

■ Interact with the audience.

■ Educate — don’t sell.

■

Use stories and analogies to make your point.■ Use evaluation forms.

■ Plan to stay for at least 30 minutes following your presentation to

answer questions and talk to individual participants.




TV and radio

It’s unlikely that a few well-placed press releases or guest appearances

will result in media stardom on the level of the financial planning

industry’s Deanna Katz, or household names like author Suze Orman orMad Money’ s Jim Cramer. But many independent advisors have

experienced considerable success in broadcasting as subject matter

experts or hosts of their own local or syndicated programs. The key to

rising above the heavy competition in this medium is to bring qualities

and an approach that is new, unique and memorable.

Print and direct mail

Print collateral and prospecting materials are the mainstay of most

advisors’ marketing arsenals. While online media continues to threaten

print’s solid footing, print remains a viable and cost-effective option, if

properly managed.

Even though standard direct mail response rates remain in the 3% – 5%

range, there are tactics you can employ to increase direct mail response

rates, including:

■ Mailing only to pre-qualified lists

■ Staggering mail drops to large lists to ensure adequate time for

follow-up calls

■ Ensuring your message is on-point and reflects the recipients’ needs

■ Personalizing your mailings and tailoring the content to the individual

recipient (or group) through full or mass customization

■ Tracking all mailings and follow-up activities to determine which

messages and tactics are working

Sponsorships

Many financial advisors choose to get their name in front of clients and

their communities through less traditional tactics. These may include

sponsoring uniforms for children’s sports teams where your name

is on the back of every jersey; sponsoring a golf hole at a local charity

tournament or co-sponsoring a marathon for a cause you care about.

Sponsorships tend to offer two-fold rewards: 1) You get your name out

there and 2) You have an opportunity to support a cause that reflects

your values and/or those of your target clients.

23




Cyber marketing

Websites Doing business without a website is like networking without

business cards. Prospects and clients expect you to have an Internet

presence. Many prospects will conduct their due diligence online to seewhat you’re all about before contacting you or accepting a meeting.

Social media sites While the jury is still out on the effectiveness of

social media sites like MySpace and LinkedIn for generating qualified

leads, there is evidence that a presence on these sites can help boost

your website presence. Links to your site, placed on these and similar

sites, can have an effect on raising your search engine placement —

making it easier for clients and prospects to find you.

YouTube.com The YouTube phenomenon reaches across all demo-

graphic groups and industries, a trend that marketers across the globe

are closely watching. Some pioneering financial advisors, working in

conjunction with their compliance officers, have begun to post topical,educational videos on the site. This approach allows prospects and

clients alike to attend mini-seminars. All content must be pre-approved

by your compliance department and filed in advance with FINRA if

content warrants.

Client communications

Regular communications to existing clients help to deepen relationships

and generate new referrals. But remember, even with existing clients,

you’re still competing for their attention as they sort through volumes of

email and direct mail. Don’t bombard them with too frequent or lengthy

communications.

E-newsletters distributed on a monthly or quarterly basis keep yourname in front of clients as well as periodic emails containing newsworthy

information or helpful suggestions like end-of-year tax tips. Always reach

out to clients with personalized letters, emails and/or phone calls during

periods of economic turmoil or increased market volatility to reassure,

answer questions and help them remain focused on long-term goals.


There’s an easy way to check the viability

of your marketing communications

messaging, including collateral materials,

press releases, TV or radio scripts,

presentations, newsletters, etc. Be your

own critic and employ the “So what?”

method in evaluating your material. If the

messaging is not compelling, actionable

or newsworthy to you, it probably won’t

be compelling to your audience either.




Best practices for sustained growth and development

The most successful practices grow through the deliberate efforts and

active engagement of principals in the development of well-formulated

growth strategies. Your business plan is the blueprint for this strategy,

but ultimately you and your team must take an active role in bringing the

plan to fruition.

Consider the following practices employed by successful independent

advisors and firms for sustaining or increasing practice momentum.

Create an advisory council

Develop a council of trusted professionals from within and outside of

your profession to review your practices, processes, marketing tactics,

financials and business plan on an annual or semi-annual basis. Their

candid and objective feedback may provide insight and their diverse

backgrounds may produce new ideas for managing and marketingyour practice.

Consider a personal coach or mentor

While there are broad differences between a personal coach and a

mentor, both can have a significant impact in keeping you motivated,

confident and focused on your goals. A mentor is typically a more

experienced colleague who is willing to take you under his or her wing,

providing advice and guidance. He or she can be a valuable asset in

helping you avoid mistakes and progress more quickly in your career.

A personal coach should be familiar with the industry and role of the

financial advisor, but is not necessarily a product of the industry.

The coach’s value and effectiveness lies in the objectivity he or she

brings, along with a tailored approach to employing best practices,

from organizational and time management skills to communications

and networking.

Broaden your definition of continuing education

Develop a formal continuing education curriculum, for yourself and

your staff, that includes practice management, business development,

technology and other elective training. Include business development

training in your written business plan, where you can easily see the

correlation to achieving specific goals.

25




Designate specific business development resources

Many larger advisory firms are hiring designated business development

officers or directors to focus exclusively on growth and practice

management initiatives. Others have hired marketing specialists, firmsor agencies to direct and manage promotional efforts in line with stated

growth objectives.

Maximize available technology

Technology creates scalability. The right technology allows you to bring

on more clients without having to add more staff or sacrifice service.

New technologies are being introduced daily to automate manual

processes, increase efficiencies and reduce costs.

Network before you need to

Taking time to network can be hard when your business ramps up,but it’s important to continually keep lines of communication open with

peers, strategic partners and prospects. You never know when the

next big opportunity will walk through your door, but if you don’t keep

it open, you could have a long wait.

Request feedback

Don’t be afraid to ask,“How am I doing?” You can’t fix it if you don’t

know it’s broken. Be sure to include clients as well as staff members,

strategic partners and mentors in casual, periodic inquiries to remain

abreast of how others perceive your efforts and performance.

Get comfortable asking for referrals

Why do top producers feel so confident asking for referrals? Because

they usually get them. There are no documented cases of bodily

harm to financial advisors as a direct result of requesting a referral.

The worst that can happen is a missed opportunity if you fail to ask.




For more information about choosing independence,

visit www.joinlpl.com, or simply contact an LPL Financial

representative at (888) 250-2420.

building and growing your practice

Documents