Too Much Coaching Expertise: How to Tame a Flood of Information

If you run a financial advisory business, there are a lot of articles and videos about practice management. It's being put mildly. I was able to count my peers on one hand. Guidance and perspective for advisors is something weTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkia

Advisory firm leaders have a challenge narrowing down what is relevant and impactful because of the abundance of high quality content. It needs to be more than focusing on how to maximize your growth. It is the topic of most of the advisor-coaching content. If you want to understand what is most worthwhile for you, you need to take a deep dive into your numbers and figure out your own growth targets.

Many advisory firms don't have a growth strategy. If you don't have a plan or strategy to guide you, it's hard to get all the information you need. Let's take a look at how you can sort through what doesn't apply to you.

A growth strategy is being developed.

The first thing you have to do is figure out how much you want to grow and how much you can afford. If you are a management firm, you have billions of dollars in assets. According to your company, market appreciation alone will increase the asset base between 4% and 5%. The industry has an average of 20 years. If you serve more retirees than accumulators, the average increase may be lower. The average may be higher if it serves more accumulators. 4% to 5% is a good start for most firms.

The number of people who reach out to learn about your services is the next goal. 40% of your firm's leads come from direct marketing and 40% from referrals. The 60% number is a good indicator of the strength of the firm's services. The best way to create quality leads is to have a great client experience. Many firms try to get all of their leads from marketing. It can be seen that they aren't focused on client service quality and aren't aware of its potential as a source of low cost, high quality leads.

When client referrals account for less than half of leads, we advise firms to cut back on marketing and focus on client services. The required investment is often less than the marketing acquisition costs.

What is the cost of marketing for clients? The cost of adding a client through marketing can range from nothing to thousands of dollars. A $2,000 per marketing lead is a good rule of thumb, according to our experience. If you want 150 leads per year from marketing, and you add up the cost of the leads and the budget, you'll get $300,000.

The price tag should show the value of referrals. It is less expensive to keep existing clients happy than it is to rely on leads. Many firms fail to set boundaries and expectations when it comes to marketing spends, which can lead to marketing costs getting out of control.

The money spent to create leads through marketing is pointless if you can't close ratios. It's reasonable to aim for seven of every 10 leads to be converted. Many of our clients have higher rates but 70% is a good initial target and can be adjusted over the years. A 70% close ratio on 300 leads translated into over 200 new clients.

In order to create a growth framework, it is necessary to determine the average fee generated by new clients. Divide the firm's revenue by the number of clients. Your average client makes $8,900 annually. Multiplied by the number of new clients the firm anticipates gaining from above, we can see that new clients will bring in more than $1.8 million in net new revenue.

It's putting it all together.

We can use these formulas to target annual revenues. As firms log their quarterly numbers, they can see how realistic their growth targets are. They can adjust according to the situation. Firms gain useful benchmarking information if they exceed or fall short of their targets.

When a firm records and tracks its investments and progress toward its own growth objectives, it will soon have trends that give a clear picture of what it is capable of achieving, of whether it needs to increase its focus on referrals and client service, and of whether it should decrease or increase its investment

The growth framework approach described in this article isn't a guarantee of growth for your firm. It is rare for a firm to grow strongly and consistently without a single one.

Once your business has a growth framework in place, you will be able to see which articles and videos are worth the time you spend on them. If you're still working on building your referral rates, or if you're ready to invest in more marketing, you'll want to use relevant content. Growth frameworks allow you to use your time and energy in ways that are more efficient.

She is the founder and CEO ofHerbers & Co.