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

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

While advisers are provided with a load of information about the importance of focusing on relationships, the most important thing is to know the ‘X’ number of perfect relationships you need based upon the assets you need to manage to enjoy the lifestyle you want – it’s that simple.

It sounds great to talk about deep relationships, but you can have 5 awesome relationships and chances are, unless one of them is Warren Buffet or someone of his bank balance ilk, you’re going to starve to death. You have to know the ‘X’ number of people you need at that particular asset value, then go relentlessly hunting, find them and bag them.

There’s nothing wrong with getting clinical. In fact, by getting clinical about exactly what you need, you’ll more quickly set up strategies to then find the people you wish to work with.

If you intend to charge 1% on AUM, and are on an 85% payout structure, you’ll gross (without office, admin. and other operating costs being removed) $8,500 for every $1mm client you find – $4,250 for every $500K client.
If you want to make $85K annually, you’ll need to find 10 of these people if you average $1mm each time – 20 of these people if you average $500K.

If you want to be generating $340K in 4 years, you’ll need to find 40 people who have $1mm, or 80 people who have $500K.
You could find 10 or 20 per year for the next 4 years straight and there’s your $340K!!

Not bad.

Whether you need 40 or 80 clients, who gives a rip – once you’ve got them, there’s you’re $340k. That’s pretty good and I say worth shooting for.

Yes, first you must know why you want what you want. But after that, once you have your dream TARGET goal locked in your mind, go and get it.

It’s that easy…well actually, the next steps take some effort, but they’re worth it.

Stay tuned to learn them.

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.