The Practice Doctor: Growing and Nurturing a Prosperous Practice

Al Depman , CLU, ChFC, CMFC, BH

Growing a successful financial services business is a long term commitment that requires patience, dedication and developing solid work habits. By studying hundreds of sales representatives from a wide variety of insurance and investment firms, it becomes apparent that there are specific stages that an advisor morphs through as he or she matures in business.

These stages are analogous to the human life cycle. As with the human life cycle, there are specific characteristics (“growing pains,” if you will) common to each stage. In this time of growth and seasonal renewal, let’s review where you are, and where you could be.

An advisor’s practice growth falls into three phases:

Phase One is the Dependence phase, not unlike our infancy and childhood.

Phase Two is the Independence phase, which begins with the Emerging stage and continues into the Early Maturity stage. This phase lines up with the adolescence and young adulthood segments we’ve all experienced.

Phase Three is the Interdependence phase, which consists of Mid-to-Late Maturity and Prime stages, akin to a mature adult human and a wise, respected elder.

The Professional Practice Lifecycle

I use the human life analogy simply as a common reference. It is very possible that you can accelerate your business practice development quickly and efficiently and grow into a mature practice in as little as 5 years. It is also true, conversely, that you can get “stuck” along the way and remain perpetually in the “Emerging Stage” after 20 years in the business.  

Phase One: Dependence

The dependent phase is normally spent under strict supervision of a sales manager or other parental influence and lasts 2 to 3 years. Often, the advisor is on a compensation incentive plan to smooth the transition into the business. Dependence is, primarily, a time of survival. You no doubt have your share of stories from those early days: the daily highs and lows, the emotions, the sales made and lost, the relationships that surprise and disappoint. However, dependence is a necessary crucible in forming the pivotal years of the Emerging practice.

Phase Two: Independence

As stated above, Phase Two includes the Emerging and Early Maturity Stages. You have survived and now embrace your role. Statistically, this usually occurs between years 3 and 5.

Characteristics of an Emerging advisor include:

• You experience that “ah-ha!” moment when you know you’ll make it in the business, despite the odds and the environment.
• You begin to formulate true markets among all the clients you’ve assembled. Quality begins to really make a difference in your prospecting decisions
• Your cash flow issues are more under control as you take possession of the reasons for spending money, by putting money into business-building endeavors.
• Your emotional rollercoaster is resolved now that you are in the business to stay. If someone says no, that’s too bad for them. If they say yes, well, of course they see the wisdom of your recommendation.
• You begin to feel self-important and explore the wisdom of cutting ties with the Firm. Is the grass greener somewhere else?
• You begin serious dating: identifying and cultivating relationships with joint workers, looking for a truly compatible assistant, networking with other professionals and seeking out products and services that fit your approach.

Emergence is the most pivotal time in your career.

Early Maturity is the stage at which you reach adulthood in your career. This stage usually marks success and translates into true prosperity.

Early Maturity includes three specific characteristics that really provide the focal point for success in the financial services business. It is the struggle to attain these skills and maintain them in the face of daily production pressure that is the hallmark of an advisor who has reached Early Maturity:

• You have solidified and finished building your key business systems.
• You have a staff in place to run these systems.
• You begin “letting go” and delegating to your staff.

The basic premise is to have systems in place so that they are transferable to current and future staffers. A common error in many advisors’ early years is to hire a staff person and allow them to create systems. Should the staff person leave, the systems go with them. If there is staff turnover, you need to ensure the systems remain, allowing you to recover faster and avoid prolonged production decreases.

Phase Three: Interdependence

The final phase of your practices growth is developing the confidence to release control and empower your staff to run the systems, or the Mid-to-Late Maturity and Prime Stages. This delegation is often very difficult for an advisor. There is a certain impatience in the delegation process, and there needs to be a willingness to tolerate inefficiency and mistakes early. However, the inability to completely let go of a system will hinder your growth.

Characteristics of the Interdependent advisor include:

• A true sense of mission. You know why you are doing the work you are doing and can explain it more fully.

• You are much more cognizant of how money is spent, the efficiencies of income and the regulation of cash flow.

Phase Three marks success and professionalism. However, the pinnacle of success is becoming a Prime Practitioner, going above and beyond expectations.

The Prime Practitioner in the financial services business is a beautiful thing to behold. These are the people who can take time to travel, take extended vacations, get involved in industry, community and charity work or start new ventures to expand their empire. Yet they have evolved from successful stages of Maturity by refining a number of characteristics:

• The establishment of internal and external teams. The internal team has gone from being a mere “staff” to self-sufficiency. While the boss is away, they continue the growth of the business. The external team is the network of professionals you have assembled to refer to and refer from. These relationships are based on integrity and have been tested repeatedly.
• Marketing for the Prime Practitioner is values-centered. Any true prospect needs to share your core values. All others are rebuffed.
• Growth is centered on your clients. All new business flows from your top tier of clients. These client relationships are essentially indistinguishable from friendships.
• Mentoring new advisors, perhaps as successors, but mainly to execute the business systems of the organization.
• You have a succession plan.

The Prime Practitioner stage can be an end point in your growth or another launch point to continue growing. Either way, the satisfaction of truly arriving in your profession is worth all the growing pains you experienced along the way.

As my old Star Trek buddy Mr. Spock would say: “Live long and prosper!”

The Practice Doctor is OUT.

Al Depman , CLU, ChFC, CMFC, BH, a.k.a. “The Practice Doctor”, is mitchanthony.com’s Business Practice Consultant. He is the creator of “The Practice Management Assessment” tool and materials and has authored numerous articles in professional publications on practice management. Al combined his Liberal Arts studies with 10 years of management experience with McDonald’s Corporation to enter the financial services world 22 years ago. Since then, Al has evolved from an MDRT-level sales rep into a full-time consultant specializing in helping others engineer their business practices to the next level. Contact him at al@mitchanthony.com .

© 2007 Al Depman