Welcome to Financial Advisor IQ


The Best Laid Plans of FAs...

December 22, 2016

As French writer Antoine de Saint-Exupéry once said, a goal without a plan is just a wish. As an RIA, it’s important to continuously look for ways to improve and streamline the business planning process. With that in mind, it’s time to start thinking about the close of 2016 and how 2017 will evolve from a business, personnel, growth and operational perspective. In our experience, only a small percentage of firms/advisors have an effective business planning process. What many business owners fail to understand is that good planning equals good management. Employees can also participate in this process by laying out career goals for the coming year.

For every business owner, setting clear goals for their partners, employees and business is crucial to execution. Planning is essentially about the organized management of resources and priorities. Management is related to leadership, and subsequently to productivity. Here are some action steps to jump-start your planning effectively and, in turn, improve your management.

Brainstorm your Business: Start by writing down important details. You don’t need to have granularity at this point. Instead, jot down essential thoughts as bullets and explanations. Compile your thoughts into a “living document” – treat this as the “discovery” phase of the business planning process.

The strategic element of planning is to focus on what you’re good at, what matters, which people are most important to you and what you can do for them. It’s about positioning and determining your target market and product focus. It’s important to formalize these details in order to communicate your vision to your team. This leads us to our next step.

Plan for Success: To chart your path, you’ll need to define both short- and long-term goals. Think broadly about how you see the business evolving over the next several years, then get specific. You’ll want to establish a timeline for accomplishing certain goals and identify the members of your team that will help achieve them.

Go beyond sales, costs and expenses, and consider what your business drivers really are. These might be conversations, page views, clicks, meals, trips, presentations, seminars or other engagements. Use this information to establish a schedule for you and your team to review changed assumptions, track results and make changes as necessary. It’s important to map out workflows and metrics to assist you in reaching your goals.

Execute the Plan: Tracking and analyzing numbers can help you manage the work behind them and better position you to recognize and highlight what is and isn’t working for your business and team. Suppose revenue is down but client interaction has increased. Collect and analyze this data with your team and develop a plan to make the changes necessary for reaching the firm’s goals. Managing your business successfully requires more than just praise and pats on the back. Successful management requires you to identify areas of concern and create action plans that lead to improvement and solutions. This could mean focusing on an issue, helping solve it if possible, discussing and embracing mistakes, and, in the worst case, managing out those who aren’t bothered by bad results.

All management can be accomplished more efficiently if you have a plan in place. Whether results are better or worse than expected, planning and tracking makes follow-up easier.

The process itself adds commitment and puts pressure on your team to hold themselves and each other accountable. Highlighting good performance is easier when it’s defined by agreed-upon numbers.

Lastly and probably most importantly, dealing with poor performance is always hard, but being able to recognize and focus on specific shortfalls makes a difficult task less painful.