Subscribe
Share
Share
Embed
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 (00:00.366)
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 Schlaffani, and I'll be your host.
At ClientWise, we get asked frequently by advisors, hey, should I take on the role as CEO? Should I step back from day-to-day duties and engage in long-term strategic planning while focusing on aligning personnel and technology and thinking about what does it take to build an enduring firm? Well, in today's episode, I'll share with you 12 simple considerations that every advisor, controlling owner, founder, and CEO, if you're in the C-suite, you've got to begin thinking about a major mindset shift.
and perspective if you're committed to building an enduring firm. Recently, I was having a coaching session with a client of ours who is the leader of a multi-billion dollar wealth advising firm. And I asked him a really simple question. said, hey, when was the last time you had white space in your calendar just to strategically think? And he paused and I could see in his eyes and I could hear the silence. He was actually thinking through his schedule. And he looked at me with a straight face and said,
With all of the &A activity we have going on with the cap table restacking and private equity, growing our firm, and I frankly, he said, hadn't had the time to really carve out that white space. If you want to build something that's truly enduring, that's durable and sustainable, a shift where you step away from the business to make major decisions about aligning key personnel, strategic planning, technology, marketing.
All of that requires a dedication of time and attention. I think we all know that, but take a look at your calendar. When was the last time you audited where you spent your time in order for your business to be durable and sustainable? This is a shift that must be taken. You want to invest time very specifically to consider what does the future look like? I'd like to provide you 12 vital areas of consideration and focus every enterprise leader who wants to ensure
Ray Sclafani (02:22.434)
that their wealth management business endures ought to consider. So there are 12. Let's dig into it. First, it's culture. Enduring firms set the right tone at the top of the organization around empathy, transparency, purpose, vision, and mission. We call it leaving a set of tracks. What are the guiding principles that you want to impart to the next generation of leaders? And how do you create a culture of inclusivity and diversity of thought? Second,
It's about people. People will either stay with your firm or leave based upon four key factors. And in this order, the nature of the work, do people really like what they do? The nature of the workplace, that's that vibe. What's the culture about? The nature of the relationship with those in charge, other team members. And then lastly, money. Having professional development plans in place matters. Having career paths in place
for future leaders in your organization matters, empowering employees to continuously improve all of this matters. And yes, of course, hiring strategically and ahead of when you need the talent, looking for people all the time, always be recruiting those people who will be change agents for the organization is paramount. Number three, leadership. Sounds simple, but in order to truly professionalize your firm,
You need people who are willing to and experienced at helping others grow. You need those pathways for professionals to become income partners and pathways for partners to become equity owners. And you need to set guiding principles for the next generation of leaders and provide performative opportunities so they have hands on the tiller while they're guiding the firm with you at their side as a mentor, as a coach. Number four, value creation. Seems obvious.
but becoming a preferred partner in your markets that you're focused on is all about focusing on the client and looking for new ways to create value. We see this expansion of wealth management as a service in a big way in our industry. In fact, what we're seeing in terms of value creation is that many of the successful best in the business are focused on sort of these micro family offices. They're not doing all the services related to family wealth office.
Ray Sclafani (04:41.58)
Not all of the clients have a hundred million or more of investable assets, but they're starting to provide all the aspects of financial planning and going one step deeper with giving strategies and philanthropic approaches. You want to institutionalize your client advising so that you can scale this expansion of value. And you want to make sure that brand of the business has its own set aside from any advisor in your firm personally. You've got to continually innovate, looking for new solutions.
new technologies and staying up to date on the latest developments and strategies. Number five, competition. Enduring firms recognize what the potential threats in the marketplace are and always act as if the competition's coming. Who are your competitors? How do you stack up? Not just on a local and regional basis, but against national competitors as well. And looking out for those black swans. Who else might be getting into the business that could be a massive disruptor?
and what is your firm prepared to do about it? On the competition front, one of the things I'm noticing is that competition is coming after your talent. With such a shortage of financial advisors and top talent entering the profession, we're noticing sharp elbows and lots of recruiting from one firm to another. Number six, growth. There are essentially three ways to grow, intentionally and profitably. We've got the organic growth, that's harvesting additional revenues from existing client relationships.
We've got inorganic growth, getting out of the marketplace and generating new clients. And then there's acquisitive growth via &A. Everyone who's an owner or partner in the firm needs to be focused on some aspect contributing to growth of the firm. Commit to building capacity in advance of your need. Number seven, focus. Narrow your focus and place strategic bets on the areas you see as most likely to help you grow your firm.
grow your people and grow your enterprise value. Rather than trying to tackle too much, go deeper on two or three initiatives that present the very best opportunities for your firm long-term. Number eight, this may sound crazy, but what we've learned about those C-suite executives who are thinking about building an enduring firm, they are great listeners. Advisors and leaders who successfully build enduring firms
Ray Sclafani (07:06.518)
are listening to the brutal facts of reality, both internally and externally. They're tuned into the issues around their business like margin compression, attracting and retaining the right talent. They're listening for issues and listening for opportunities. And then they adjust quickly and accordingly. Consistently asking questions of your team and your clients to gain information and insights is what the best in the business are doing. Number nine, technology.
consistently creating structures where you're evaluating all of your technology and being open to change when something incredibly better comes along. The year 2020 is a great example. Firms that were agile enough and flexible enough to quickly transition to meeting platforms like Zoom and Microsoft Teams and adopting productivity tools like Slack and Slido and Smartsheet.com, they all had a clear competitive advantage.
I would also encourage not getting too wedded to current technology. New tools like AI are entering the marketplace and expanding operational efficiency in great ways. So not getting wedded to your CRM system or thinking about ways to bolt new tools into the platform and tech stack that you have is a real key operational differentiator. Number 10 is a brand. The best in the business know how to tell their story in a quick, clear and compelling way.
I often say ditch the pitch. This is not that elevator pitch. This is really about how do you tell a great story in a very cogent way about what differentiates your firm from others in the marketplace? What does your marketing and messaging machine look like? Take time to really get better at framing your firm. And I wouldn't say your current firm. Think about where you want the firm to be three and five years from now. What do you want your firm brand to look like? Number 11, financial security.
Know your numbers, know your P &L inside and out. It's a math problem and it's worth solving. It's about profit targets, growth targets, enterprise value metrics, revenue per professional, revenue per team member, revenue per client. Build a dashboard that allows you to track these and other metrics more easily. Build solid performance spreadsheets for the next three years, five years and 10 years. And make sure that in your financial forecast, you're considering steady state growth.
Ray Sclafani (09:31.618)
You're considering crash and burn, man, what if the market declines by 20 % in one or more years? What does the moonshot look like? Number 12, succession. Every enduring firm has a strong succession planning strategy. They establish a never-ending succession and leadership transition planning process, and they don't hold too tight onto the reins. When you focus on creating value for others, you in turn drive and grow the value of the enterprise.
bring as many partners as possible into the firm that can help you grow the business and who want to be great leaders. Remember, dilution is good so long as you choose partners wisely. I do hope that these 12 considerations sort of weave their way into your next partner meeting. I hope these 12 considerations end up in your quarterly offsite meeting. And maybe, just maybe, you look at each and every one of these items and score yourself on a scale of one to 10. How is our firm doing in building truly an enduring firm?
and ask your next generation leaders what role they want to play in enhancing and improving your firm in each of these areas. Well, thanks for tuning in. And that's a wrap. Until next time, this is Ray Sclafani. 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.
Ray Sclafani (10:57.934)
you