This case study is based on the situation of a client of the Covenant Group. Names and details have been changed to preserve client privacy.

So, what’s the big picture?” I asked.

Henry and I had been working together after he began to feel frustrated that he had reached a plateau with his practice and couldn’t seem to break through it. We began our investigation with a discussion about the need for a long-term vision for his business. I had asked Henry to spend some time putting into words what he wanted his practice to look like in 10 years: how big it would be, what role he would be playing, the brand, the culture, the infrastructure, and so on. He was now ready to share that vision.

“This turned out to be a more difficult exercise than I had imagined,” Henry began. “I sat down at my desk early on a Saturday morning and figured I’d knock this vision thing off in an hour or so; but by noon, I still wasn’t satisfied. In fact, I left it alone for a while and came back to it several times before I finally got something that I could get excited about.”

“That’s not uncommon, Henry,” I offered. “I have seen some advi-sors spend days trying to articulate their vision, while others were able to get it done in short order. Much depends on how radically you think your business has to change, but also on how carefully you think through all the implications of each decision you make. Most people have ideas and plans in their minds about how to improve their world, but some are just better at putting their thoughts into words. So, let’s hear it: what’s the vision for Henry’s practice?”

Henry started reading from his notes. “In 10 years, my practice will be primarily focused on providing integrated wealth-management services to business owners, senior executives, professionals and their families. We will also offer expertise in income generation for retirees.

“I will be leading a team of two to three associate advisors who will be supported by three to four well-qualified and motivated service and technical professionals who will share our passion for excellence in everything we do. My role will be ‘resident big thinker and rainmaker,’ with responsibility for setting our strategic direction and building the presence of our firm in the community. The majority of my time will be spent deepening and strengthening relationships with our top 40 clients and their other professional advisors.

“In addition, I will work to identify potential new clients who meet our ideal client profile and encourage them to become engaged in our disciplined planning and wealth-management process.

“The associates and our team will be responsible for most of the work associated with our process, and I will provide moral support and motivation for clients to implement the solutions the team develops.

“We will be managing the financial affairs of no more than 200 clients, having assets under management of $100 million, generating revenue of approximately $1 million, with 80% of that amount coming from recurring fees. Our clients will regard us as their ‘personal CFO,’ and willingly refer others to our practice — in particular, their families or business associates, for whom intergenerational issues or business succession might lead to a transfer of assets from our clients to someone else.”

Henry looked at me for approval, and I had to say: “Congratulations, Henry! That is a great example of a vision statement that flows from a lot of careful thought. You have both quantitative and qualitative aspects to it; you have answered the two big questions we asked in our last meeting around how big you want to become and what role you want to play.

“Most important, it is inspiring. And I can see how others who might contribute to the realization of this vision could get excited about it, too. Well done!”

“Thanks,” he said, glowing just a little. “Now what? How do we actually make this happen?”

“That’s the right question, Henry,” I answered. “With this as a starting point, it’s time to lay out your strategy for realizing that vision. Let’s look at the decisions you made and their implications. For example, you began by describing your offering to the market — that is, your value proposition: integrated wealth management. What specifically does that entail?”

@page_break@Henry proudly leapt in with the answer: “It involves a comprehensive review of a client’s financial circumstances — their investments, business holdings, insurance, wills, cash flow, taxes, family situation, and so on. In other words, a ‘current situation’ analysis. We follow that with in-depth questioning to uncover needs, objectives, attitudes, preferences, and so on. From that information, we formulate a strategy for managing and protecting their assets in accordance with their investment policy statement and financial plan. Then we implement the plan, using the various investment and insurance products and services we have to offer. If work by outside professionals is needed — for example, wills or powers of attorney — we arrange that as well.”

“That’s impressive,” I volunteered. “Based on what you have just described, I see several strategic implications. First, there is the need for process — an efficient and effective way to work through the steps you outlined that is consistently applied for all clients. Do you have such a process in place now?”

“We know what has to be done, but I couldn’t say the experience is the same each time,” Henry confessed. “I know there is software available that tracks the steps, ensures that all the right questions are asked and develops the IPS and other recommendations. We should look at something like that and institute some policies and procedures around the process.”

“Excellent!” I continued. “The second point you mentioned in your vision statement was about your clientele — business owners, senior executives, professionals and their families, and retirees. That’s quite a range of people. How will you market to them all?”

“What I was really trying to describe were three different markets,” Henry responded. “Business owners, senior executives and professionals could be treated as one segment. They typically have similar demographics and issues. I included their families because I believe there is opportunity in counselling aging parents and their adult children about the intergenerational transfer of wealth. Many advisors focus on the accumulation of assets, but not enough are being creative about how those assets will be used throughout a client’s retirement. I feel I can build at least part of my business around this area. Besides that, it dovetails nicely with my other target markets, as they age and convert their assets to retirement income.”

“You have been thoughtful about this,” I told Henry. “To execute successfully within the markets you describe, you will require expertise and passion — and you have both.

“Now, the next part of your vision has you working with a team of other advisors and support staff. What are the implications of that decision?”

“I struggled a bit with this one,” Henry admitted. “It means I have to take on the role of manager as well as advisor, and I wasn’t sure I wanted to do that. Then, as I learned from our previous work together, I sketched out an organizational chart around the functions that would need to be done and concluded that I could find the right people to fill all the boxes and then I could take on the role of rainmaker and chief strategist. If I don’t build a team, I won’t be able to deliver on my value proposition.”

“Excellent again,” I commented. “The final aspect of your vision refers to your relationship with your clients. How will you build that sort of intimacy?”

“It will start,” Henry answered, “by being selective about the type of clients we accept. They will have to be philosophically aligned with our way of thinking and doing things. Of course, if we are going to meet our objectives around revenue and AUM, they will also have to qualify economically.”

“And you will need a strategy that attracts them to you,” I suggested. “Have you thought about your marketing message and how you will deliver it?”

“Not really,” Henry responded. “I have some ideas, but they are not specific enough yet. Is that where we should go next?”

“Yes, it is,” I replied. “I suggest we both think about it and reconvene to exchange ideas. My advice to you at this point would be to think about how you can make the message appealing to your target market and how you can deliver it in a way that will attract their attention. ” IE



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George Hartman is a coach and
facilitator with the Covenant Group in Toronto. He can be reached at george@covenantgroup.com.