The 5 Secrets to Creating a $Million Wealth Management Practice in 2018

It’s 2018 and whether you are starting out as a new advisor or have been doing this for a while, chances are you’ve got your eyes set on getting your annual revenues up to $1 million and greater. The good news is that this is definitely achievable, not at all easy, but it can be attained.  The most successful financial advisors often take a different route than all the others and they tend to be good business managers. Further, in most cases the largest practices are built in one of two ways, the first is old fashioned relentless marketing or tactfully consolidating many books of businesses over time.  But ask any of the top advisors at your firm and they will probably outline these five factors as the key to creating a massive business:


  1. You must Market Relentlessly
  2. Don’t be Scared by the Numbers, it’s Hard Work
  3. Build a Niche Business
  4. Differentiate Differentiate Differentiate
  5. Leverage Your Network


You must Market Relentlessly

Great marketing efforts can lead to massive success in Wealth Management. Marketing can be any number of different activities, cold calling, seminars, social media, advertising, public speaking, media appearance, radio, tv, newspaper, blogging, youtube videos, podcasts.  This might just be the single most important factor in creating a massive practice.  If you are starting out new, 95% of your efforts should be focused on marketing. Set a minimum target of 100 prospecting outreaches for yourself everyday, this could be in the form of telephone call, emails, LinkedIn message, twitter interactions with prospects etc. To really power up your prospect for 2018, you need to create a solid prospecting list that is targeted and consisting of individuals who are qualified and fit your defined client profile. If they don’t fit your client profile, don’t waste a moment going after them, it will be a waste of time. Your prospecting list should be at least 1000 contacts, why so many, well that’s simple, each day when you reach out to 100 prospects, you will eliminate some from the list, and that’s good, because in the end you are targeting about 150 client families to get to your goal of $1 million in annual revenue. Depending on what marketing endeavors you choose, your results will be different, cold calling will get you some success, perhaps for every 100 calls you may speak with 10 -15 people and book 1 follow-up. Networking will yield better results, but you must understand that marketing must be a combination of daily activities, with the primary object of making 100 contacts everyday. So figure what works best to get to your target group in the most effective and efficient manner.


Don’t be scared by the numbers, it’s hard work

The wealth management business is not easy, for this reason it requires huge upfront effort and thick skin because you will get rejected day in, day out, every single day you market, you will receive major rejection. To win, you simply must find a way to stay motivated, because success is cumulative, eventually the payouts are will really add up and it could be substantial.  If you want to make it work, you need to understand your reasons for building, without personal motivation, you’ll not get very far. So here’s the fact, in order for you to get to $1 million annual revenue, you need to understand the numbers that make it work.  The business has become very simplified, most advisors are creating fee only businesses, and the reliance on stock commissions, new issues revenue, upfront mutual fund fee is becoming less of a factor. So if you are building a fee only business, you first need to set your fees, based of the real value you provide, it’s no longer enough to offer a financial plan and asset allocation to justify charging a fee.


The average advisor charge fees between 1% and 1.50% depending on their service offering.  Next, it is crucial to set a minimum asset level per household, the higher the minimum the less clients you will require to get to your revenue targets, but will you be able to execute! Be realistic, start with a minimum asset level of $250,000 per household, this should keep you safely above the firm minimums at the larger firms as well.  


Focus your efforts on acquiring 150 family households, if done right, this will get you to your revenue target with ease.  Idealing you should be marketing to professionals, business owners or niche targets with $1 million per family, however that is not always as easy, so here how the pros do it. The top advisors, look to have about 40 families with $1 million or greater of asset, for every 1 such family, you should aim to acquire 3-4 families with $250,000 or greater in assets. Now your aim is to move this minimum higher as you grow, so set your targets at different levels you hit, at $25 million in AUM, move your minimum asset per family to $300,000, at $50 million move it up to $500,000 min per client family.


Build a Niche Business

If you want to grow fast, one trick is to market to an affinity group, and try to go viral. Here the idea is that if you are successful a landing a few clients in an affinity group, you have a higher probability of securing others by referrals and recommendations. For example, let’s say you targeted a big law firm, and successfully acquired three senior lawyer over a period of a year, in the next year, your efforts at getting others in the firm are substantially higher. The other serious advantage in the niche approach is that you become a specialist at understanding the needs of a very specific group, which really sets you apart from other advisors. In general niches are not easy to break into, so your best bet is to select a niche where you already have some relationships or have some existing deep knowledge or experience in.


Differentiate Differentiate Differentiate

Show your prospects that you offer big value, clients are becoming more and more conscious about value and budget. This is one area where smart advisors can really shine, show that your offering is different by putting yourself in your client’s shoes and try to solve their everyday problems beyond managing their retirement funds.  In our last post “$150 for you and no Bank Fees” we outlined how one client was super excited by finding a way to eliminate his everyday bank fee and earned a bonus when he did it. This was a simply factor, but seriously impactful, because everyone hates paying the silly banks charges these days.  So the point here is that you have to be human, think of the different way to simplify the lives of your clients and then they will become advocates and tell their friends about you.  Differentiation is a big way to build moats around your clients with superior service and access to your network, there’s something about being part of a club, create this with your clients and they will reward you.


Leverage Your Network

Hey let’s face it, even your college roommate need a good financial advisor, ok maybe you don’t want them as a client but they definitely have relationships with people. The thing about having a network is the power to name drop or get introduced. LinkedIn is one of the best tools for figuring out who’s related to your network. Powerful stuff, many advisor are yet to leverage this tool, the ones that do are raving fans.  The other part of leveraging your network, is to get involved in something, whether it is sports, or volunteering, every advisor needs a huge network, so for 2018 set a goal to add 15 new people to your network of professionals and then leverage their relationships to get some clients.


Partner with your colleagues, learn from the best and support each other in generating marketing ideas, there may be others in your firm having big success, network them and try to learn new techniques constantly.


Last thing, keep your eye on the goal $1 million in revenue is definitely, it’s been done before and you should be there too!

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