Another Benefit of Independence: Selectivity
Things have been very busy lately and business is booming. There comes a time though when you need to take a breather. I decided I needed a vacation day, so I took one last Friday. While I was at home, I received a call on my cell phone from a prospective client I had spoken to months earlier.
He is a local business owner who said he was frustrated with his current advisory relationship. His current firm recently lost two of their three brokers and this client was subsequently “reassigned” (I love it when this happens) to another, less experienced broker. The client received a letter in the mail stating that the new broker would be calling within the next two weeks. Well, 4 weeks later…still no call.
The client called me to say he wanted to move his account to me if I was interested. I asked him to fax a statement so I could see what was in his account. We’ll see how it goes.
This is a story which repeats itself far too often. Some brokers have so many clients that they cannot properly serve the clients they have. Consequently, many clients are underserved and that’s where the independent advisor comes in. As an independent, you have complete autonomy when it comes to choosing how many clients you handle.
At larger firms, it is typical that the broker who hangs in there the longest ends up with the largest client base. When brokers depart, some clients follow, but others do not. Clients who are left behind are reassigned to a new broker. So brokers with longer tenures tend to inherit the most clients. That’s not how it works in the world of the independent advisor.
I began this journey without a “book” of business so I had to build it from scratch. Simply put, I had no clients and no assets to manage. In the beginning, things were lean. During this time, I had to be very aware of my cash flow. When your asset management compensation is derived strictly from fees, building your business is even more difficult. Ultimately, it was my financial planning fees which helped keep me afloat.
Now that the asset management revenue has grown to the point where it is the majority of my monthly income the pressure is off. Since the pressure is off I can be more selective in choosing clients.
Hi Mike-
What are you finding that works well to get your name out? I am in a similar position, but the prospects have yet to steadily knock on my door.
I am tempted to go back to my wirehouse days and start cold calling again (but I hated the type of client that it would bring in)
Thanks – Cal
Hi Cal,
I think first you have to get a few clients. Once you get, say, 4-6 clients (?), ask them what they like about your practice and what they’d like to see you implement (services, etc.) Make them feel a part of your business. If they are happy with you, ask them if they know anyone who might benefit from your services.
Another thing you can do is set up a regular schedule for meeting local attorneys, CPA’s (who are not in your business), etc. They are probably one of your best sources.
Also, try leaving your business cards with people you come in contact with. Even if they, themselves are not the type of client you are looking for (you certainly would not want to say it in those terms) they may know others who would be.
As an independent, I don’t need 100 clients to pay the bills. You have to get to your number (whatever it is) to take the pressure off and eliminate the thought of needing to cold call.
Hope this helps,
Mike