The Fact:
Of the total amount that advisors invested in their practices in 2001, about 70% went to overhead and team salaries.

The Implications:
The average financial advisory practice is characterized by high fixed costs, making them vulnerable to downturns in the market. In 2001 advisors responded to that vulnerability by cutting variable costs, such as marketing and client appreciation, which may have a negative impact on long-term growth.

The Idea:
Practices with high fixed costs must focus on leveraging their investment in the business by increasing productivity. Delegation, technology and standardizing key processes are key to this process. For example, many advisors will lose valuable time by completing paperwork during client meetings. The most efficient advisors will speak to clients about a specific opportunity and have an assistant complete the paperwork following the meeting. At that point, the advisor is on to the next activity. If the process is managed professionally and conducted in a private meeting room, then few clients will object.

The Next Step:
The Business Success Kit provides you with the tips, tools and templates that you’ll need to enhance practice productivity and profitability. It’s the most practical and comprehensive guidebook available for financial advisors. For more information, visit www.caifastore.com and click on the Business Success Kit.

Attend CAIFA’s National Conference to learn more ways to achieve long-term success. Visit www.caifa.com for more information and to register.