Getting to Your Next Level and Staying Sane

Al Depman , CLU, ChFC, CMFC, BH

Are you a 600 or a 750?

Are you ready to graduate to the “next level” of your practice?

“The next level.” I believe it has officially achieved cliché status in the lexicon of the financial services world. I did my part in making that happen by incorporating those words into every possible promotional piece I generated over the past 10 years.

The usual implication hidden in the phrase “next level” is that the advisor’s income jumps from its current level by another $25,000 in earned fees, commissions, credits or whatever the measurement happens to be.

For a while I was content to wink along with the advisor and the management team – sure we’d grow income substantially – that’s what it’s all about, isn’t it? Generating more revenue?

Gradually, it dawned on me that while the advisors I was working with did indeed shoot for additional income goals (being up 15 – 20% yearly seemed to be the prevailing objective), their infrastructures were not being developed to meet those increased production targets.

My bias as a practice management consultant has been to work with financial advisors who are committed to building relationships with their clients. I’ve built my practice models around building and maintaining strong client relationships.

A common theme I was encountering involved an advisor who wanted to provide excellent client service and communication but was unable to find the resources to do that and achieve increased production. Result: stagnation and frustration. I began wondering what I could do to help advisors set themselves up for success, and that “next level” of income.

So I pulled in all my research – hundreds of interviews with advisors on their way up, on their way down, at the top of their game, and on their way out. These advisors included fee and commission financial planners, commission-only advisors and agents, market specialists (such as estate, business, or physician), product specialists, wealth managers and more.

There were similarities in their practices – I found that an advisor’s practice had eight distinct business systems that could be assessed. Furthermore, in each of these business systems there were specific best practices that seemed to transcend all the others. With this insight, I put together a thousand-point scale (yes, that’s 1,000!) in which to measure the advisor’s practice. This measurement was weighted with the emphasis on best practices in each system. What emerged was a statistical portrait of the advisor’s practice. Better yet, by striving to achieve the best practices outlined, I could also identify the statistical “next level” for the advisor.

We had quantified the elusive “next level!” Not only that, we could specify the steps that needed to be taken to provide the infrastructure to get there.

So the discussion could be: “Great! You want to increase revenue by 20% next year. Here are the steps necessary to take you there without burning out.”

That’s the good news. The difficult news is that graduating to the “next level” of your practice usually requires streamlining systems and the hiring of additional assistance.

Here’s how the numbers break down on the 1000-point scale and the organizational charts for each level.

0 – 250: The Developing Practice, one that has been established for 1-3 years, and is focused on survival.

251 – 600: The Emerging Practice, one in which the advisor is intent on building a clients mostly on his own, wanting assistance but not having the necessary cash flow.

601 – 750: The Mature Practice, one where the advisor has a solid client base and income and is happy with passive growth from referrals and other existing marketing avenues.

751 – 1000: The Prime Practice, one in which the advisor continues to aggressively grow.

These are the practice breakpoints: at the 250, 600 and 750 levels. Where is your practice?

Perhaps you have the infrastructure of an Emerging practice and are squeezing it to produce Mature practice numbers. This is a common scenario and one in which the advisor’s health and relationships can be frayed over the long run, leaving a practice of minimal book value and a worn out advisor and staff.

The Practice Checkup at www.Practicetools.net is home to the analytical tools that can help you determine your own “next level” and the action steps necessary to get you there.

I’ll continue to use the “next level” in my consultations. But you know that it’s more than just income. It’s the whole “next level” experience – setting yourself up for both success and sanity. And isn’t that what we would like for our clients as well as ourselves?

Until next month,

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