Comfort Is Killing Your Practice
Comfort – it’s what happens when you stop showing up to your not-so-new-anymore job 30 minutes early. It’s what happens when you start letting yourself eat in the car because the new car smell has worn off. It’s even what happens when you decide to pass a little gas on the couch next to your significant other because you both have been dating for months now and you’ve got that on lock.
In this industry, comfort is what happens when financial advisors move to the independent channel and rely more on client referrals than active cold calling and aggressive marketing. It’s also when they realize they can work Monday through Thursday, 9 a.m. to 4 p.m., make a decent living, and have the oh-so-coveted “work-life balance”.
In case the sarcasm isn’t registering, comfort is NOT good. In my opinion, comfort is one of the biggest reasons most independent financial advisors fail to reach their full potential as business owners and entrepreneurs. Now, I’m not saying that advisors don’t want to evolve and grow. However, many advisors easily maintain enough fee-based assets to generate recurring annual net incomes north of $150k. For many, this means that there’s a sort of safety net hampering any motivation to evolve their practice. The two examples below illustrate the negative side of comfort.
Example 1: Branding
For the most part, advisors are the worst when it comes to branding. Many of them don’t even want to discuss it because they don’t see how it will get them new clients. To add to it, the ones that do attempt to brand themselves will pay some outdated marketing firm too much money for a blurry logo and a website that’s full of what I call Viagra pictures – random people positioned awkwardly in a meadow or conference room. They do this because they’d rather go with the cheapest option since they’re unsure of the actual ROI and they’re too comfortable to research further.
Example 2: Learning New Things
Comfort seems to prevent advisors from continued learning. Early in their careers, advisors are soaking in all kinds of knowledge and seek to understand the products and services they need to offer clients. However, as they gain experience, many of them become less and less willing to learn new things and adapt to changes in our industry. For instance, take the idea of multi-generational planning. The need is greater than ever for advisors to leave transactional business in the past and embrace planning, not only for a client, but also for a client’s children. This means pro-actively connecting with those children, and it could also mean learning how fixed insurance fits into a client’s overall estate plan; both of these would require LEARNING and EVOLVING as an advisor.
Comfort Affects Your Bottom Line
I suppose many independent advisors fail to evolve or don’t want to learn because they see retirement for themselves 5 to 10 years down the road. Sure, it’s nice to run a cash flow analysis based on recurring revenue at a 2x multiple and imagine a nice liquidation event that can fund a life of Mai Tais and couples’ massages. Even if that were the case, why wouldn’t you want to maximize that liquidation event? Consider this: 66% of heirs change financial advisors upon inheriting their parent’s wealth. Let’s say I, as a millennial advisor, am looking to purchase a practice from a retiring advisor. You better believe I’m going to discount my offer price if I see no effort by the advisor to cultivate relationships with the next generation or provide estate and insurance planning for his or her clients. If anything is going to motivate an advisor to get out of his or her comfort zone, I would think a hit to their bottom line would do the trick.
It amazes me how many people in life become comfortable with their situation and lose the desire to constantly strive toward greatness. If you’re a business owner of any kind and you’re not constantly paying attention to shifting trends in your industry and evolving your business as necessary, you’re robbing yourself and the world of your full potential. I’m sure as parents you wouldn’t tell your children that it’s ok to be comfortable with B’s and C’s, so why do so many of us settle for less than we’re capable of? Do more. Do better. Constantly evolve. If just one person hears this message and embraces it, then it’s been worth my time crafting it.
Want to get out of your comfort zone or talk about IFP? Send me an email and we can chat.