There is an old adage that goes like this: “If you don’t know where you are going, how will you know when you’ve arrived?” In your world as a financial advisor, which personal dreams and professional ambitions would you have to realize to say you have “arrived”?

Many advisors haven’t really thought about what it is they are building, so they find it difficult to verbalize their goals. They don’t have a clear vision for the future — a mental picture of what they want their world to look like. As a consequence, they can’t determine an appropriate long-term strategy or articulate it in a comprehensive business plan that will get them to where they want to go.

Such advisors need to start working “on” their businesses, as well as “in” their businesses. They must define their vision, values, mission, ideal clients and target markets, current situations (strengths, weaknesses, opportunities and threats) and objectives.

Vision is not just a starting point; it also sets the tone, pace and standard of excellence that’s sought — and should be widely known, shared and believed by everyone who will contribute to or be affected by its achievement. It also ought to be so compelling that clients, associates, staff, even family will be excited to come along for the ride.

Here’s an example of a vision statement:

“In 10 years, ABC Financial will be the go-to firm for high net-worth individuals and their professional advisors. Our reputation as experts in financial, tax and estate planning will allow us to be selective about the clients we accept, adding only a few per year to enable us to continue to exceed everyone’s expectations for service and personal attention.

“Our partnership of four to six specialists will be an ensemble of equal talents who combine to manage fully the financial affairs of no more than 200 clients having collective assets under management of more than $200 million, generating revenue of at least $2 million, with 70% of that amount recurring annually.

“Our support team will share our passion for excellence in every aspect of our business and, in return, they will participate in our profitability, as well as enjoy great personal latitude in how they handle their
responsibilities. Everything we do, say, present or participate in will reflect the highest standard of quality and
professionalism.”

Having a similarly clear vision is essential to developing long-term strategy. However, if someone sidles up next to you at a cocktail party and asks: “What do you do for a living?”
you’ll hardly want to launch into a narrative such as the one above to describe your business. In such instances, you need a mission statement — a concise expression of what you do, designed to capture interest and, if you choose, lead to broader
discussion.

Great mission statements convey benefits from the client’s perspective and, as such, describe some aspiration that clients might have. They also have an element of intrigue that results in the listener asking for more information. Compare the following statements: “We provide investments and financial planning to professionals, senior executives and small-business owners” and “We help our clients achieve financial peace of mind, regardless of what happens in an uncertain world.” The second example combines client aspirations with “permission marketing,” so the listener is more likely to ask for more information.

Another key component in the definition of your business is embodied in both your vision and mission statements: a set of values by which you will operate and want to be recognized in your community. The obvious ones are ethics, honesty, integrity, putting the client first and professionalism.

Many successful advisors extend their value list to include such things as sense of community, faith, charity and personal development. Having a good sense of your own values enables you to match them with those of potential clients. Wouldn’t we all rather do business with people who share our values?

Articulating vision, values and mission is done with a view to defining the ideal client and target market. As we evolve our practices from a sales to a marketing paradigm, we typically narrow our focus from doing business with essentially anyone who has a need and some money to those with whom we would truly like to have a long-term relationship. Ideal clients can be described demographically, in terms of age, income, occupation, net worth, life stage, etc. Or they can be described psychographically — according to their sense of responsibility, willingness to accept our advice and readiness to provide referrals.

@page_break@A target market must have two significant characteristics: it must be both sizable and approachable. There is no sense in targeting doctors as a marketing strategy, for example, if your community has only two doctors.

Emphasizing the second point, I am
coaching a young woman who left nursing to become an advisor. She initially thought the 200 or so physicians in her city would be her primary market because they measured up well to her ideal client profile. Traditionally, however, doctors have not held nurses in high regard and she had little success in her early efforts. So she changed her strategy to target non-physician members of the medical community — technicians, administrators, nursing supervisors, nurses — and began a series of marketing efforts that included lunch-and-learn seminars in hospitals. It didn’t take long for the word to spread; soon doctors started coming to the sessions. Over the past few months, she has won six doctors as clients, as well as others medical professionals.

As the picture develops of where we want to take our business, the next question to ask is: “How high?” Setting objectives means more than simply estimating the revenue we’ll need to maintain the lifestyle we visualize for ourselves down the road.
Objectives must be “SMART” — specific, measurable, attainable, relevant, time-based. For example, an advisor earning $200,000 a year might aim to generate $400,000 gross ($300,000 net) income from financial planning and investment management activities by Dec.
31, 2008. Half the revenue will come from fees and half from commissions.
Alternatively, an advisor might aim to increase AUM by 20% a year over the next three years, with 8% annually on average coming from market increases and the balance as the result of implementing six to
eight promotional activities.

The final step before setting out our long-term strategy and short-term tactics is to benchmark where we are today. A SWOT — strengths, weaknesses, opportunities and threats — analysis is a useful method for taking stock. What personal and professional strengths do you bring to the table? What are the areas needing improvement? What unique opportunities exist for you as a result of your special talents, circumstances in your community or your target market? What could get in the way – competition, regulation, market conditions, changes in the law, personal issues?

Stephen Covey, author of Seven Best Habits of Highly Effective People, says that personal leadership is “the process of keeping your vision and values before you and aligning your life to be congruent with them.”

For advisors, that means defining your practice to a depth of detail probably not done before. It means making your world different from what it is today, and having a strategic process to make it happen.
IE

George Hartman is a coach and consultant with The Covenant Group and can be reached by e-mail at george@covenantgroup.com.