Penny Phillips, the co-founder and president of Journey Strategic Wealth, shared with WealthManagment.com four common practice management mistakes advisors make when building a business while simultaneously working in the industry. Advisors should pay close attention to avoid these common mistakes as they grow and scale.
1. Failure to Have A Clear Vision
According to Phillips, advisors must differentiate between maintaining a lifestyle practice and building an enterprise. In an enterprise business model, there is a particular strategic focus on driving long-term value, whereas, in a lifestyle practice, an advisor can prioritize maximizing cash flow or income. Deciding on which business model will effectively help advisors prioritize their strategy and business decisions down the road.
2. Adding New Personnel Without Auditing Systems and Processes
Advisors must ignore that gut feeling to add a new hire and do a proper gut check instead. Before hiring additional personnel, advisors need to audit systems and processes such as data gathering practices, meeting prep procedures, and repeatable processes so they can create automated workflows and save time.
3. Adding New Technology
First, advisors should optimize three core tech pieces, including portfolio management software, planning software, and a CRM. Secondly, auditing technology twice a year ensures that advisors know what they are paying for and getting their money's worth. Lastly, Phillips suggests only adding new technology if it is valuable to clients and you are willing to adopt it fully.
4. Failing to Set Proper Expectations With New Hires
According to Phillips, when advisors hire younger advisors, the new hire's expectations frequently must be clarified. Advisors should consider setting proper expectations for themselves, provide a roadmap for success and effectively determine success by assessing how much capacity the new hire can create.
Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.
