Published Articles

Creating A Plan For Success

SuperUser Account posted on May 01, 2011

By Rick Rummage

May 1, 2011


A lack of planning is a common mistake in all aspects of life. How does someone know when they've arrived if they don't know where they are going?

As an advisor, ask yourself some basic questions and write down the answers to help form a plan. Where do you want to be in five, 10 or 20 years? How much money do you hope for and how much do you need to make? Will the firm you work for get you there? Do you want to be part of a team? If so, what would it look like-vertical or horizontal?

The important takeaway is the need for a clear plan of action. It is better to have it in writing, but not mandatory. I speak with many advisors-40 to 60 years old-who are very unhappy with how their careers have turned out. They now realize they should have had a plan.

That's far from the only mistake made by bank advisors. Let's look at some of the common pitfalls and how to avoid them.

Many bank advisors have difficulty with long-term relationship building. There are a few reasons for this. First, they tend to think short-term instead of long-term, due to the nature of their business. In the bank channel, most of their clients are referred by the branch. This leads to a situation where the advisors spend most of their time signing client after client instead of slowing down to build strong relationships.

By contrast, advisors in non-bank channels spend most of their time hunting for leads.

Since the bank advisors don't work as hard to get their leads in the first place, they often end up taking them for granted.

But advisors in every model should want strong client loyalty. If an advisor changes firms, they want their clients to go with them. If the relationship is not strong, the client will not view you as a trusted advisor.

Spend more face time with each client. Give them quarterly portfolio reviews. Send them holiday cards, newsletters and magazine subscriptions. Do client appreciation events.

Of course, this all depends on what your firm allows.

I see many bank advisors who have enough assets and revenue to start building a team, but don't do so. At about $50 million in assets and $500,000 in total production, an advisor should start thinking about team building.

At that amount of revenue, it is not possible for one person to effectively work the entire book. There will be too many missed opportunities. It is also time to hire a junior advisor, even if you have to pay for it yourself. Some banks will pay for it, but some won't. Maybe an intern or two is a good place to start. You should also always have a good registered sales assistant.

Most bank advisors are behind the curve when it comes to annuitizing their books. As we all know, this industry is unique because the advisors can annuitize their commission stream. This makes the business one of the best in the world. Where else can you have a steady stream of revenue every year and the only thing you have to do is keep the clients from leaving?

However, it is hard for many advisors to give up the larger short-term commissions for the long-term annuitization. There are still too many bank-based advisors spending most of their time selling annuities and "A" share mutual funds. It is time for all advisors to start using managed and wrap accounts. It will feel great five years from now when you walk in the office on Jan. 1 and know you will produce $500,000 without picking up the phone.

The most successful advisors do a good job of marketing themselves inside the bank. In fact, the top performing advisors are usually on a first name basis with many senior managers. Some even manage the personal assets of these senior managers.

You must demonstrate certain characteristics to get referrals. First you must be very likeable. You must understand it is important to give, in order to get. It is also important to be knowledgeable regarding financial planning. If your referral sources are impressed, they know the clients will be too. Lastly, you must be honest, trustworthy and very reliable. Once you have all of these characteristics, make sure to get a lot of face time with your referral sources.

If you are in a territory where the referrals are weak, then pick up the phone and start calling existing customers. Look at the maturing CD, large-deposit, high-balance and IRA rollover lists. Ask your branch managers which clients you should reach out to first. I understand some branch managers feel like they own the clients and are sometimes difficult. Use your personality to win them over. Work the phones aggressively, or invite clients to come in and meet with you. And be patient, they will come.

It is rare that you see bank advisors marketing themselves outside the bank. I guess they feel internal referrals are the reason to be at a bank in the first place, so why go outside.

I understand and even agree with this point of view. However, sometimes you find yourself in a situation where you must do something to bring in business. Some banks have no incentive for the branches to send referrals to the advisors.

Additionally, some don't even allow you to call on the customer base without a referral. If you are in this situation, you must either find a better bank or start marketing outside.

The biggest producers in the industry are good at networking with high-net-worth individuals. They get on the board of directors of several nonprofit organizations. In addition, they join a membership organization like the local Rotary or Kiwanis clubs. Networking takes time, but there are other ways of marketing that have quicker results.

Every day on the way to the office we all pass thousands of businesses. When I was in production I would stop at least twice per week at random businesses to introduce myself. I opened many accounts using this strategy. The chamber of commerce is also a great place to market yourself and most likely your bank is already a member.

All institutions have strengths and weaknesses. There are some banks that have strong platforms, treat their advisors well and the average production is high. There are also banks where the brokerage divisions are afterthoughts and the advisors don't get any respect.

If you are at a bank that makes you feel like you are swimming upstream, maybe it is time to look at other options. I am shocked every day when I find a good advisor at a bad bank. They continue to hope for change or don't realize how bad they really have it.

I am a believer in fixing that which is broken. Hope, as we all know, is not a strategy. At least become knowledgeable on what your options are.