What’s the best move you’ve made in your career? Your worst move? Ask these questions of enough financial advisors and you come up with an array of answers — some are universal; others work for some advisors but not for all.

Naguib Kerba, an advisor and branch man-ager at Investment Planning Counsel in Mississauga, Ont., has been collecting these anecdotes from fellow advisors over the past few years in order to learn and share important lessons about building a financial advi-sory practice. For example, he says, most advisors agree that client selection is important for their businesses. Others, however, cite advertising as one of the best moves they have made to improve their business, while still others, including Kerba, report that they have yet to see a direct payoff from their advertising efforts.

Investment Executive asked a number of advisors what they considered were their best moves. Here are their replies:

> Choose Your Clients. Bradley Roulston, founder of Roulston Financial in Mis-sis-sauga, Ont., was living the dream of every new financial planner when he started out in the business 10 years ago. He was working with well-paid IT professionals and bringing in healthy revenue in his practice.

But he wasn’t satisfied. “I wanted to enjoy working with my clients,” he says. By chance, he landed a few health-care professionals on his client roster and found that their value system matched his own.

Roulston decided to zero in on this group — mainly occupational therapists and physiotherapists. That meant cutting the IT professionals from his book, which at first translated into a pay cut because his new clients make only about one-third the salaries of his former clients. But he’s happier working with people he respects. “I’m proud of myself for taking the risk,” he says.



> Leave The Home Office. Many financial advisors begin their careers working from a home office. It’s an economical way to get started in the business. But some advisors spend too many years working out of their homes before moving into commercial office space — and regret having delayed the move.

“I waited way too long,” says Diane Gray, an IPC advisor with offices in Peterborough and Cobourg, Ont. “I tried to do the ‘in-home thing’ because it’s cheaper.”

Gray was seven years into her career before she felt comfortable committing to an office lease. Yet she saw an upswing in her business almost immediately after moving into her new office. Clients began to take her more seriously, she believes, and were more willing to invest larger sums of money with her.

Business also went up a notch for Kerba when he moved from his home office into a commercial location four years into his career. He, too, found that his new digs convinced clients he was an established professional, in the business for the long haul.

“People are much more comfortable once they know you’re an established business,” he says. Joining the local business association also helped legitimize his practice for some clients, he adds.

“You don’t have to find the fanciest place to rent,” says George Torok, an executive coach and consultant based in Burlington, Ont., and co-author of Secrets of Power Marketing. “But getting out of the home is important because it sends the signal — even to advisors themselves — that they’ve made a commitment to the business.

“It sounds funny, but we have to play mind games with ourselves,” Torok adds.

The psychology of a dedicated office shouldn’t be underestimated. Gray says it was a fear of failure held her back from committing to renting an office earlier.

“After 20 years in the business, if I had to do it all over again, I would have gone out and established a line of credit and pushed myself into a commercial office, hired an assistant and gambled on myself,” she says.



> Find The Right Marketing Strategy. While most financial advisors would agree that marketing is vital to business success, there is little agreement about what works. Advertising must work for some advisors, Kerba says, but it doesn’t seem to work for him. In the past, he signed on to several one-year print ad commitments, none of which generated even one client. These days, he advertises only in a local directory as a way to keep a visual presence in the business community.

@page_break@On the other hand, Blaine Conrad, an advisor with Ramey Investments Inc. in Dartmouth, N.S., has used newspaper, television and billboard advertising.

“Television has the best exposure and it also raises your profile,” Conrad says. TV gives a perception of legitimacy, he adds.

When Conrad ran his first TV ad 10 years ago, it generated at least 50 new clients. Recent results are less dramatic. His most recent TV spot, which ran three years ago, brought in 10 clients.

Now, Conrad’s company is focusing on direct-mail advertising and has hired a full-time marketing assistant. In the past year, the firm has landed 28 new clients through the assistant’s efforts.

Marketing is an area in which advisors serve themselves best by looking for the right fit for their business rather than trying to figure out what their peers are doing, says Torok. Because every advisor is unique, his or her marketing endeavours should reflect that one-of-a-kind positioning, he says. Torok cites the example of an advisor who took a decidedly low-tech marketing route toward targeting shareholder employees of a high-tech company that was on the cusp of some much-anticipated growth.

“His marketing plan was to go out to the company parking lot every day, and stand there and introduce himself to two or three people,” he says. “That’s how he built his business.”

Torok says some advisors give up on their marketing efforts too early and base their success or failure on little more than a hunch. Time and money should be factored into how long a test period should last, and advisors need to look closely at the type of clients that are being reached to make sure it is in line with their target market, he says.

“Concentrate on the things that give you business,” Torok says.

Garth Whyte, executive vice president of the Canadian Federation of Independent Business in Ottawa, cautions advisors not to forget the obvious. “Your clients are your best marketers,” he says. “You shouldn’t be sheepish about asking for referrals.”

Kerba notes that several advisors have cited asking for referrals as one of the best things they ever did for their business.

Dan Richards, president of Strategic Imperatives Ltd. and IE columnist, has noted that more than half of clients with more than $100,000 to invest select a new advisor through a referral.

Further, research has shown that most high net-worth clients are willing to provide referrals — if only their advisor would ask them. So, go ahead. Ask.



> Buy A Book. David Evans, an advisor with Bradford Financial Services Inc. in Kamloops, B.C., liked his best move so much, he keeps doing it. He first bought a book of business from another advisor almost 10 years ago and has since repeated the strategy seven times.

“It was cheaper to buy an existing book than to market and put in the time to acquire clients,” he says.

But there’s an art to making sure another advisor’s book will work with your business, Evans says. Getting as much information up front is critical.

“You don’t want any surprises,” he says.

Evans also recommends a transition period — usually, one or two years — during which the clients get to know the new advisor.

Most of the clients Evans brought in this way fit well into his business, and he enjoys a retention rate of more than 90%.

Today, he shares more than 2,000 clients with another senior advisor.

Checking out a book of business before you buy can help you ensure that most of the clients are suitable. But your purchased book will inevitably include a few clients who are far from your ideal client profile.

“We probably have clients on the book that we shouldn’t have,” Evans says, “but they will get weeded out over time.”



> Hire The Right Staff. Staffing may be the area in which many advisors have made their best and worst business decisions. Karin Mizgala, an advisor and president of LifeDesign Financial in Vancouver, knows this all too well. She spent a year and a half in a strained relationship with an assistant.

“It was a bit of a nightmare,” she says of the experience.

Mizgala admits she had negative feelings about the assistant during the hiring process — but suppressed them. The assistant wasn’t incompetent at her job. Rather, it was a personality conflict.

“She had the right credentials and background,” Mizgala says. “We just didn’t like each other.”

Although the awkward relationship didn’t affect work with clients, it decreased the assistant’s motivation and the quality of her work slipped. It also took Mizgala more time and energy to manage the relationship than it should have because of frequent miscommunication.

Since then, Mizgala has found another assistant — one who worked part-time with her many years ago, before Mizgala went independent. The new assistant has freed Mizgala from worrying about the administrative side of her business, allowing her to focus on profitable — and more enjoyable — activities such as client contact, and business planning and development.

Advisors make better hiring decisions when they know their own skill set and look to fill the gaps with a new hire, says Shannon Waller, director of new program development at the Strategic Coach in Toronto. Too many make the mistake of hiring people who are similar to themselves rather than those who will best serve the business. “People tend to hire clones,” she says.

If the new hire is not working out after three months, let them go, Waller says. Her rule of thumb: “Hire slow, fire fast.”



> Form A Partnership. Bill Green, an advisor with IPC Securities Inc. in Bracebridge, Ont., who has been in the industry for almost two decades, has also struggled with staffing. In the 1990s, he wanted to bring another planner on board, but had difficulty finding one who shared his vision of the business.

It took some time, but he finally found Carol Howorucha, who had a business style that complemented his. Howorucha is the friendly half of the team, who will ask about the client’s family dog, while Green is the more technical deal-closer. After they had worked together for a year, Green asked Howorucha to become a partner in the business.

“Forming a partnership wasn’t my original intent,” Green says. “My intention was to hire a planner who would run his or her book while I ran mine.”

But Green and Howorucha worked so well together and their skill sets were so interdependent that handling the 400 or so clients jointly actually made more sense. (For more on partnerships, see story on page B16.)



> Change Your Business Model. When LifeDesign’s Mizgala decided to leave a large firm and strike out on her own three years ago, she made a couple of key decisions that irrevocably changed the way she did business. One was to switch to a fee-only practice.

“From a value standpoint, I feel much more at ease with myself,” she says. “And I feel much more at ease working on a model of charging fees instead of selling product.”

She switched to a fee-only model knowing full well that she would not earn as much as she had under the commission-based model — at least, not right away. “But I made the decision consciously and deliberately,” she says.

Mizgala now charges between $1,500 and $4,000 for her personal financial coaching and planning programs. Although her revenue has dropped, she expects it will eventually equal what she was making under the former model. Also, a fee-only business means less overhead and administrative work.

After giving her practice a makeover, Mizgala and a partner launched the Women’s Financial Learning Centre, a series of workshops and coaching programs for women held in various locations around Vancouver.

Moving to a fee-only model and setting up the learning centre required a readjustment of how Mizgala conducts business. But both moves were more consistent with her personality, she says.

The centre has required much more time than she thought it would, but her background in psychology and counselling makes the work she does there a “labour of love.” The centre also generates revenue; for instance, a six-week program costs participants $475.

Having more control over the practice makes it easier for Mizgala to develop future financial planning, coaching and education programs. For instance, she is developing a self-study learning guide to sell through the centre.

“It’s one of the most rewarding things I’ve done,” she says.

Advisors should look at activities that give them energy, and find ways to spend time on those aspects of the business, Waller says. You may be able to delegate energy-draining tasks or, as Mizgala did, completely change your business model.

“Figure out what parts of the business you love doing and what you’re best at,” Waller says. “Organize yourself so you can do more of these things.” IE