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

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