When you are trying to find ways to improve your practice, having an outsider’s perspective can be useful.
But what kind of perspective are you looking for? You may have heard colleagues refer to their “consultant,” “coach” or “mentor.” While these terms imply similar functions — professionals who provide advice on running your business — they do vary.
Rosemary Smyth, a Victoria-based business coach for financial advisors, explains the differences between these professionals:
> A consultant will tell you how to do something
If you are too busy to take on a certain project and just want a solution, a consultant probably offers the type of help you are looking for.
For example, let’s say you want to implement service-level agreements, which will involve segmenting your clients. A consultant would use his own variables to figure out how to separate your clients into top-tier, middle-tier and bottom-tier segments. He could decide the best way to segment your clients by determining which clients produce the most revenue. Your consultant would then determine that you receive 80% of your revenue from a specific group of clients, and that that group should make up your “A-list” clients.
You might disagree, but the consultant has done his part by producing the solution to the problem you defined.
> A coach will ask you what you want to do
If you prefer being more involved in finding a way to improve some aspect of your practice, a coach may be a better fit for you.
Coaching, Smyth says, is a more reflective, collaborative process.
“The coach asks [advisors] what it is that they want to be doing,” she says, “and brainstorms with them so they come up with the answer on their own.”
Using the previous example of segmenting your clients, a coach would ask you what variables you want to use to start this process. He might offer some suggestions by asking you questions such as: “Who do you enjoy working with?” and “What qualities should your top-tier clients have?”
Ultimately, you would come up the answers, but with the coach’s guidance.
> A mentor will show you how to do something
If you want to learn from someone who knows your profession first-hand, developing a mentoring relationship with a fellow advisor might be best.
Instead of developing your own techniques, you can ask for advice from a more experienced peer who has probably already accomplished a lot of what you would like to do in your practice.
A mentor will not only share success stories but also relate how she has learned from her mistakes, which might prevent you from making those same errors.
Returning to the example of segmenting clients, your mentor would explain her technique for doing so. Because your mentor has already experienced the process, she can explain how she modified the process to suit her practice. For example, she might have divided her clients by wealth and community influence because she felt her top client segment should include those who are well-respected and provide referrals.
While consultants and consultants are paid professionals, mentoring relationships are free of charge.