Paul Kingsman

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

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

Last week I watched Man on Wire, the true story about Philippe Petit, the French tight-rope walker who walked between the roofs of the World Trade Center buildings on only a thin cable, 1350+ feet in the air with no net.

What struck me more than the actual event was his insistance that he needed a picture of the Twin Towers while he was planning his endeavor. He needed to visualize clearly the circumstances he’d be facing. When he decided to walk between the Towers, it was before they were built, yet he insisted on finding a drawing so as to frame his challenge. He eventually obtained an architect’s ‘final version’ of what they would look like at completion.

Learning Point: You must visualize the task that you’re undertaking and see the desired result clearly. The more vividly you can see the circumstances, the less unfamiliar you’ll feel during the actual activity and the greater your chance of success will be. Mentally you’ve ‘been there before’ and now it’s simply a formality of just ‘doing it.’ Imagine your appointment, ’see’ the client listening, ‘hear’ yourself asking the right questions and ’see’ them sign the documents and become a client for life.