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Hosted by Financial Advisor Coach, Ray Sclafani, "Building The Billion Dollar Business" is the ultimate podcast for financial advisors seeking to elevate their practice. Each episode features deep dives into actionable advice and exclusive interviews with top professionals in the financial services industry. Tune in to unlock your potential and build a successful, enduring financial advisory practice.
Ray Sclafani (00:00.334)
Welcome to Building The Billion Dollar Business, the podcast where we dive deep into the strategies, insights and stories behind the world's most successful financial advisors and introduce content and actionable ideas to fuel your growth. Together, we'll unlock the methods, tactics and mindset shifts that set the top 1 % apart from the rest. I'm Ray Sclafani, and I'll be your host.
So I'd like to share with you eight benefits of a written five-year strategic plan for your business. I got to thinking after speaking with one of our elite advisor clients that we coach here at ClientWise, who is the CEO of a $2 .4 billion firm here in Texas. He shared the notion that for all its critical importance, strategic planning is essentially a math equation. So I asked them to elaborate. He says, using appropriate benchmarks plus making accurate assumptions equals a realistic
five -year pro forma financial model. He says by calculating the forecasting and his strategic plan accurately and correctly, he can achieve far greater confidence and clarity knowing precisely when and how to make important decisions with his leadership team. You know, it's one of the great ironies in our industry planning, which I believe to be truly noble work. When you help one client make a difference, there's a ripple effect multi -generationally.
When you grow a wildly successful business and increase your client roster, well, you change entire communities. That's noble work. It's centered at the heart of our business. Yet most advisors still function as accidental owners who haven't effectively planned for their own business's future yet are making promises to clients as if they'll be around forever. Just look at the continuity planning statistics, the succession planning statistics. They're not great for our industry.
That'll be an episode for another time. So whether this is the case with your own firm, the planning for your future, the written plan, it's my experience that most advisors and their teams are overdue to update their five -year strategic plan. They have all the parts embedded in some shared file drive, the vision, the mission, the workforce planning, who to hire, when to hire. They've got values typed up in cubicles on walls.
Ray Sclafani (02:26.498)
But sustained success in this industry can only result from careful planning, dedication, and a clear vision for the future. Creating the five -year strategic plan serves as one of the most powerful tools for achieving your goals. After coaching thousands of advisors, the following are just some of the many benefits derived from a thoughtful and up -to -date five -year strategic plan. The first is simple. It's clarity of vision.
Your plan's gonna allow you to define your long -term vision and set clear objectives for the enterprise, providing greater clarity around understanding where the business is headed and what steps are necessary to get there. This well -defined and written vision is essential for attracting and retaining both clients and top talent, which is tough to come by these days. When clients and prospects, employees and recruits see that the owners of your firm have a clear plan for the future,
Well, they're more likely to trust in your expertise and subsequently commit to a long -term relationship. The second benefit is this goal setting and accountability. It's the learning and adjusting. It's the making decisions about the progress you're making and holding the team accountable to the long range plan. By setting specific key results and long -term objectives, while your plan then empowers both you and your team members,
to break down that long -term vision into very actionable, short -term goals that serve as these milestones that helps everyone track their individual progress more accurately and then know when to adjust. Additionally, your strategic plan creates a sense of accountability. So when goals are clearly defined, assessing whether they've been met, well, that becomes easier. Owners and team members can regularly review progress, make necessary adjustments, remain on track. This sounds so simple.
But yet it's interesting to notice how many firms do not have that accountability structure in place. benefit, know, Richard Branson once said, you don't learn to walk by following rules. You learn by doing and by falling over. This is a performative opportunity. That's the third benefit. If you're genuinely committed to your clients and to building an enduring firm, then you must start developing next generation strategic thinkers and strategic planners.
Ray Sclafani (04:46.85)
This process is an ideal performative opportunity to get future firm leaders involved in planning, execution, and adjustments. It's the only way they'll truly learn to plan for the firm's future. There's a great quote by Jack Welch, I'll paraphrase, before you become a great leader, success is about growing yourself. Once you become a great leader, however, it's all about growing others. So by identifying areas where the next generation professionals in your firm
can develop or acquire these new skills of strategic planning, the writing of the plan, the envisioning of the future. Well, you empower them to invest in their own growth, ultimately benefiting the firm's clients. And by engaging them in creating and implementing the firm's strategic plan, you further cultivate their problem solving and decision making abilities. The fourth benefit is risk mitigation. Our industry is not immune to economic fluctuations in market volatility.
which is deeply tied to firm revenue in the fee on AUM models that so many RIAs have adopted. A well -structured strategic plan outlines strategies for mitigating potential risks. And that allows you to effectively protect your clients' investments and financial wellbeing so you can identify potential challenges and have contingency plans in place. A plan also helps to diversify your offerings and revenue streams, better to buffer against unexpected downturns
in specific sectors or markets. The fifth benefit is improved time management. You know, there's only 168 hours in a week. Time is an advisor's most precious commodity. It is true for all of us. Effective time management is crucial. And a five -year strategic plan helps you allocate your time and resources more efficiently, avoiding distractions and unproductive tasks, and focuses all activities that align with these long -range goals. It also helps you to prioritize clients.
and prospective clients. By identifying those high value clients and allocating more time and attention to nurturing those relationships, this ultimately protects margin compression, increases client satisfaction and loyalty. The sixth benefit is enhanced client communication. Well, clients are expecting more more transparency and proactive communication. Your five -year plan serves as a valuable client engagement tool.
Ray Sclafani (07:10.902)
allowing you to share the firm's vision and long -term goals so your clients feel like active participants in the journey. It's so true among the transfer of trust. If you're building an enduring firm, water falling these relationships so senior partners that might've sourced a large client in the past must then transfer the trust and teach others in the firm the client story, the client plan, and build those relational connections, those technical abilities in the next generation.
All of this type of communication when embedded in your strategic plan is incredibly valuable, helping the clients understand where your firm fits into their life. Regular updates on the progress of your strategic plan also help strengthen these client relationships and build trust. So when you explain to clients what your workforce planning looks like, how you're developing team members, what technical training and education
and credentials they're acquiring and where they fit into the future vision of the firm, you build incredible trust with the clients, especially when you come true on executing on your plan. And by showing this commitment to achieving your specific objectives, you will foster greater loyalty and drive more loyal client advocates making introductions. The seventh benefit is a competitive advantage. Again, I said earlier in this episode that
Most financial advisors are accidental owners. They believe in planning, but have failed to plan for themselves. And that's true. A well -thought out strategic plan, however, helps set you apart from your competitors and demonstrates a full commitment to professionalism and sustained success. You can't build an enduring firm without a strategic plan. Potential clients are more likely to choose an advisor who can articulate a long -term strategy.
and demonstrate a clear path to achieving financial goals. Your plan must be a powerful marketing tool to attract new clients and differentiate your business in a crowded marketplace. The eighth benefit is about personal and professional growth. So when you create a five -year strategic plan, by the way, I didn't talk about a 10 -year plan or a 20 -year plan. We have a client that believes in creating a hundred -year plan. I don't know what the world looks like in five, seven, 10.
Ray Sclafani (09:29.078)
It's difficult enough, let alone a hundred years from now. Simply a five year strategic plan isn't just about the business. It also presents an opportunity for personal and professional growth. Add five years to your current age. Ask your leaders in your firm, add five years to your current age. What do you want to be doing five years from now? When you're that age, what does your day look like? What kind of clients are you serving? How are you serving them?
Using this process to reflect on your skills today, your strengths today, will also help you think about areas for improvement and the talent, experience, and skills, aptitudes, competencies you'll need to develop into the future. This will also help you develop your future leaders. Leaders who do invest time and effort into creating a five -year strategic plan for the long -term are far better poised to navigate the challenges of this volatile industry and deliver an exceptional service experience to clients.
it will be a valuable investment in the future that will pay dividends in both business success and personal development. So if your aim is to build an enduring wealth advising business, right now is the time to either start planning if you haven't already, or pull out that strategic plan and update it twice, three, even four times a year. And I encourage you to share these insights with your team, especially your next generation leaders. With each of these episodes, we include
coaching questions, they're future oriented, they're open -ended, and they're really designed from a professional development perspective to get you thinking about what we discussed in the episode. So today I'd like to share with you five. First, what are your long -term business objectives and key growth financial targets? One. Two, how do you develop your next generation leaders as strategic thinkers and decision makers? How are you teaching them to solve
problems and make decisions with a strategic mindset. Third, how do those goals translate into a strategic plan with actionable objectives and key results? John Doar wrote a powerful book called Measure What Matters, chapters four, seven, 10 and 12, or what he calls the superpowers. These are OKRs, objective and key results. By the way, if you're an Audible book fan, it's one of the best books to listen to.
Ray Sclafani (11:53.772)
because the other chapters are the actual CEOs who have implemented an accountability structure and rolled out the OKRs in their firm. I'd encourage you to check it out. Number four, what actions can you take as a leader to more effectively model being committed to and acting within the scope of your firm's shared vision and values? And number five, what issues must you address right now, such as building capacity, upgrading technology,
hiring talent to better position the business to meet your five -year goals. Thanks for tuning in. And that's a wrap. Until next time, this is Ray Scalfani. Keep building, growing, and striving for greatness. Together, we'll redefine what's possible in the world of wealth management. Be sure to check back for our latest episode and article. Have a great week.
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