Paul Kingsman

In 1990, Keith Bell wrote a book for competitive swimmers with a great title.

While the title, “Winning Isn’t Normal” is easy to say, it’s a lot tougher to do but definitely worth thinking about.

Obviously we could write and speak all day about what constitutes winning. It is subjective so let’s keep it simple and define it as succeeding at what you want to achieve.

The reality is that most people will not achieve their deepest desires before they die; winning and succeeding is indeed unusual.

People who succeed in life, who achieve their objectives and who truly triumph, do stuff that the majority of people won’t.

Whether it’s in business, sport, personal relationships, fitness -whatever the instance, people who set objectives and targets typically get what they want because they’ll push harder, strive longer, contend further than most. That’s usually all that separates them.

So why won’t more people do this?

Over the next several weeks, amongst other business-building ideas, we’ll look at this.

The first reason that so many people have dreams, New Year’s resolutions and desires, yet fail to reach them, is that they don’t count the initial cost after they have the vision of what it is they wish to achieve.

For instance, if you wish to get fit and lose weight, there is initial losses on several fronts.

To begin eating more correctly,maybe you’ll need to change some eating habits. You’ll need to plan meals better, drink more water and structure your day so your maximizing the effectiveness of your metabolism.

If you wish to get fit, you’ll need to do exercise. Therefore, you’ll need the correct gear, maybe a gym membership, and you’ll come away with sore muscles. It’ll cost you money, time, and effort.

You’ll be tired for the first few weeks as your body adjusts to your new routine. You’ll need to go to bed earlier, meaning that schedules will need to be altered.

While getting fitter, losing weight, getting healthier and living better has clear advantages, the reality is that the first step after the goal has been set is loss.

It’s the same with building a great practice. You might want 40 clients with the correct amount of assets and right attitude, but finsing them will take time, perseverance and sometimes frustration.

Moving from generating money transactionally, and embracing a fee-based model will take time and explaining to your clients. Some won’t get it. There maybe financial loss…initially.

Maybe to reach your objectives, you’re going to have to bring on some part-time admin help. This will take time to do the numbers to make sure fiscally it is a prudent move. You’ll have to spend time trying to find the person then train them in your system, explaining to them why and how you do what you do.

To move forward, there is a cost. Often people overlook this or underestimate it. Once you’ve set your pathway for what you intend to reach, anticipate the cost or sense of loss that may come about. Then, keeping your objectives front and center, continue taking those incremental steps toward your final destination.

-Paul

After specifying exactly how many clients you’re going to pursue this year, ensure you have your internal systems in place.

By doing this you take care of two key things:

1) You maximize your return from what you currently have. While it sounds more fun to head out and find new clients, it always costs less time and money to ensure the ones you presently have stay with you. By reviewing your current client list, you’ll see people who you can contact to set up appointments or reviews. By doing this, you can build your servicing platform, routine and habits.

2) By doing that, you not only maximize what you presently have, but also begin creating a system where you’ll maximize your return when you bring in new clients.

By looking internally first, you essentially kill 2 birds with 1 hit.

Mine your current client list. While I’m not a huge fan of the A, B & C client label approach, you must know where the bulk of your income is derived from, people to pay attention to and ensure they remain clients, and people who possibly take a lot of your time and provide little return back to you.

By having a better handle on this, you’ll sum up conversations you’re about to begin having with prospects and potential clients quickly, knowing exactly how bringing them on will look relative to your overall business mix.

Happy Hunting.

-Paul

Once you’ve taken time to seriously consider what you want then put down the numbers as to how you’ll get there.

From last week, you can see the numbers in our scenario are:

Goal: Within 4 years, to annually generate before expenses, $340,000
Independent adviser on 85% payout.
Charging 1% on assets managed

You’ll need to generate $400,000 to your grid. The company will take 15%, leaving your 85% payout at $340,000.

To achieve the above scenario, you need to be managing $40mm.

Over 4 years, that means you’re hunting $10mm each year.

Add ‘real people’ numbers:

3 $1mm clients ————— $3mm
4 $750k clients ————— $3mm
8 $500k clients ————— $4mm

That means you’re looking for 15 clients.

Sit back and look at those numbers.

15 people is all you’re looking for this year.

15 right, good people to make your clients.

15 AAA-rated people. Clients who have Assets & the right Attitude, and who will become Advocates for you.

If you get motivated by lists, print a piece of paper with 15 slots. Keep it in your draw or somewhere where you’ll see it easily and regularly. Make a master copy because you’re going to be using it 3 more times over the next 4 years.

Look at that number and how it breaks down.

By being as realistic as you can, you’ll relate to these numbers constantly. Some people would put down 10 clients with $1mm each to make it nice and neat. But a book of business isn’t quite that cut and dry, so be realistic about the potential mix of clients and asset values you’ll bring in.

Stay focused on your numbers. If a client brings in $680k, he counts as one of your 8 $500k people – not one of your 4 $750k people. The extra $180k is cream on the top and you can count it at the end of the year. That way you’ll still remain hungry and focused on getting your 4 $750k people.

Get excited about searching and finding your 15 people this year. They’re around, in need of talking with you, and they’ll want to tell you everything about their dreams and ambitions.

Have a great Thanksgiving week, and we’ll continue next week.

-Paul

Remember our scenario:

Independent adviser on 85% payout.
Goal: Within 4 years, to annually generate before expenses, $340,000
Charging 1% on assets managed

You’ll need to generate $400,000 to your grid, the company will take 15%, leaving your 85% payout at $340,000.

If you’re looking to generate the above scenario, you need to be managing $40mm – it’s that simple.

Over 4 years, that means you’re hunting $10mm each year.

The next step is a combination of you deciding how many clients you’d like to work with and what their ideal asset level will be. This goes a little deeper than just doing numbers as it forces you to think about how you’ll structure your business and which type of client you’re looking for. For the purposes of this series, we’re assuming you want to be gathering assets by offering different planning and investment platforms for your clients. We’ll cover what those look like a little later in the series.

Once you’ve solved that issue, come back to the numbers.

Remember, you’re looking for $10mm in Year 1. $10mm at 1% is $100k – of which you’ll keep $85k. If your expenses are running at roughly 20%, you’ll keep $68,000 before taxes. Depending on your cost of living, etc, the first year might challenge you a little, but keep focused on what Year 2 and beyond will look like.

If you decide your sweet-spot are clients between $500k and $1mm – great. Now figure out what that looks like.

It might look like this:

3 $1mm clients ————— $3mm
4 $750k clients ————— $3mm
8 $500k clients ————— $4mm

That means you’re looking for 15 clients. That’s a little more than a new client each month and way less than 2 new people a month. Can you see and feel how achievable this is?

They’re out there needing to meet you. Who are those 15 people who will be blessed to work with you this year? If you get more than the 15 great people this year, and they’re the right people – fantastic. Obviously looking forward from here, you’ll build a practice of 60 or so ideal people. We’ll look at just what this might look like later on also.

By having a number of right people you’re pursuing rather than an asset level, you’ll become discerning as to who deserves to be working with you and who doesn’t.

By being specific about what you want to be generating in your practice, you can see clearly the number of clients you need and the respective number of assets each must have.

Next week, we’ll look at some different criteria for finding and selecting clients. Some people prefer a niche strategy, others prefer the AAA approach. We’ll look at each next week.

Happy Hunting.
-Paul

Start building the practice you desire by being clinical and putting down some real numbers.

Often advisers aren’t as realistic and practical as they need to be so here’s an example of what thet can look like. Although things don’t happen as neatly as we’d like them to, you must begin from somewhere. It’s not as hard as what people think it is. Just because there are so many opinions available to listen to, doesn’t make building a successful practice a complex thing.

Scenario: Adviser who is increasing clients, but none too significant enough to skew the book.

Independent adviser on 85% payout.
Goal: Within 4 years, to annually generate before expenses, $340,000
Charging 1% on assets managed

Adviser needs to generate $400,000 to their grid, the company will take 15%, leaving their 85% payout at $340,000.

If you’re looking to generate the above scenario, you need to be managing $40mm - it’s that simple. There’ll be bits and pieces – maybe an insurance contract here, a transactional payment there, but by and large, lets get some larger guidepost numbers down first.

We’ll set a 4 year goal, a fixed date with which to reach that by – let’s say by December 31, 2014. Not 2014, not December 2014, but by December 31, 2014.

That means you need to bring in $10,000,000 in year 1.

Note: The more realistic you are with first year numbers, the easier you’ll survive. You’re covering overhead yourself, so I’ve factored this into the scenario somewhat. Obviously expenses will vary relative to location.

Next week we’ll look realistically at how that will be made up.

As you’ll see, with a realistic, focused, clinical approach to finding the right number of right clients, along with a great relational demeanor you develop, getting the money you need, clients you want and having time to do what you love, is closer than you think.

See you next week.
-Paul