Businesswoman with umbrella walking against strong wind

“Coach’s Forum” is a place in which you can ask your questions, tell your stories or give your opinions on any aspect of practice management. For each column, George selects the most interesting and relevant comments from readers and offers his advice. Our objective is to build a community of people with a common interest in making their financial advisory practices as effective as possible.

Advisor says: Here we are, approaching the end of another year and, once again, I am worried about my business. Although we’re doing well by most measures, I always get a feeling around this time of year that some disaster is lurking around the corner. That could be another market meltdown, more regulation, problems with my dealer firm, pressure on fees – who knows?

Of course, I can look back at my pessimistic, annual self-survey of the world from last year and see that most things have actually worked out quite well. But that doesn’t seem to help much.

Do you have any advice on how I can shake this gloomy outlook?

Coach says: Your message made me chuckle because it reminds me of one of my favourite coaching clients, Stu. He and I have been working together for almost 10 years and his business is leagues ahead of where he thought it would ever be. But that doesn’t stop him from calling me up as each yearend approaches and asking for my predictions on what’s going to topple his practice in the next 12 months. I have begun calling him “Dr. Doom” and, surprisingly, he doesn’t seem to mind.

Here is the truth: yes, there no doubt will be things that have the potential to disrupt your business – not only in the next year, but also well into the future. Rising costs and downward pressure on fees will make staying profitable more challenging. Clients will become more demanding and expect greater involvement in decision-making, higher portfolio returns and more customized attention and service delivered on demand with 100% accuracy. Thanks to an increasingly difficult regulatory environment and changing technology, the complexity of your business will increase. But, guess what? These are the same issues Stu and I have been discussing for the past 10 years.

Nothing is new really; just a different version of the persistent reality of being in the financial advisory business.

So, how do Stu and I try to find some comfort for him? We conduct a high-level review of his business to ensure that the foundation is strong and able to withstand whatever surprises may present themselves.

Here is our five-step process:


The vision you have created for your practice will determine the strategy you need to realize that vision. Strategy, in turn, points to certain tactics that you will employ to implement the strategy. Tactics are somewhat flexible, in that you can change tactics quite readily if something you are doing doesn’t show signs of advancing your strategy. Vision and strategy tend to be longer-term and more enduring.

That said, this annual vision review may reveal that a change in strategy is required. That’s what happened in Stu’s case this year. As is the case with many financial advisors, his client base is aging and there has been a steady and obvious change in priority for many clients – from accumulation to drawdown or distribution of their investment assets. Stu decided to make a conscious shift this year from being an “asset manager” to being a “relationship manager” in order to keep pace with his clients’ needs.

Stu had enjoyed managing his clients’ investments – making asset-allocation decisions, choosing mutual funds and ETFs, etc. He recently concluded, however, that he will prefer to outsource portfolio management and all that entails to a third-party portfolio manager.

This change will allow Stu to spend more time in a renewed discovery and planning process to address his clients’ revised goals, as well as enable him to sit on the same side of the table as his clients when dealing with the selection and oversight of an external portfolio manager.


Your value proposition is the foundation upon which just about every aspect of your business is built, affecting not just how others who come in contact with you and your business see you, but also how you see yourself. If you’re not confident in your value proposition and don’t convey it in a compelling way, you won’t believe you can deliver on your promises and, not surprising, neither will your clients.

Your value proposition is a brief statement explaining what you do, how you do it and why it is important to your current and prospective clients. It should differentiate you in some way and have relevance to your target market. For example, in Stu’s case, he revamped his generic value proposition from “We give our clients the confidence to make informed financial decisions” to “We specialize in protecting and maximizing the after-tax income our clients receive – to enable the retirement lifestyle they desire.”

After you develop your value proposition, display it on your website, stationery, email signature, signage and social media. In addition, you’ll want to make the key ideas behind your value proposition part of your ongoing discussions with your clients. With each meeting or phone call, your clients should have a sense of the value you add to your relationship.


One thing Stu has found very useful is to create a one-page explanation of what he does for his clients. It includes the full range of services he provides. As a result of Stu’s change from focusing on asset management to relationship management, he began to emphasize both broad and narrow categories of services, such as retirement-income planning, retirement cash-flow management, investment- manager oversight, family wealth distribution, philanthropy and tax minimization.

Stu also saw the wisdom in reviewing and refining his service delivery. We previously had implemented a tiered client segmentation with corresponding levels of client service. However, some changes were warranted, given Stu’s revised business model. For example, we incorporated more frequent contact for newly retired clients and more educational seminars on post-retirement issues.


Having the greatest value proposition in the world and enhancing your services and service delivery won’t do you or your clients any good if you can’t maintain an acceptable level of profitability in your business.

Clearly, there are two sides to the profitability equation: revenue and expenses. By definition, clients in decumulation mode are reducing their assets, which, correspondingly, reduces the revenue they contribute to your business. Stu and I recently estimated that his practice will lose approximately 15% of assets under management (AUM) to withdrawals over the next 12 months. Assuming a conservative market net gain of only 5%, he needs to add 10% in new AUM just to stay even. His target is to continue to grow his business by 10% annually, meaning he needs to add 20% more AUM through new business next year.

Stu foresees two opportunities for new business development. With his new value proposition, he can direct his marketing and prospecting efforts toward people who will be retiring soon and those who advise them, such as their accountants, their lawyers and their adult children. In addition, Stu believes he can ramp up the number of introductions he receives via a planned campaign among his existing clients who benefit from Stu’s new focus on maximizing after-tax retirement income.

Our review of Stu’s client segments and the levels of service he provides revealed several unprofitable clients. That left two options: transfer those clients to another advisor or reduce the cost of service to align with the economic value of each client. Stu has elected to do some of each. We prepared a letter to be sent to some clients that offers to assist them with a transfer to another advisor who is better positioned to provide the service they need. For other unprofitable clients, we revamped the service delivery to make use of technology to reduce costs.

As a result of Stu outsourcing the investment-management role in his practice, he believes he can add at least one day a week to business-development activities to improve the likelihood of achieving his business growth target.


Every business has the potential to be compromised by some unexpected event. The best way to deal with such an event is to prepare in advance by having a specific action plan. If you never have to implement the plan, the time and effort you put into developing one will have been cheap insurance. For Stu, the contingencies for which he has devised at least the critical steps of a plan include:

– Stu’s death or disability

– death or disability of a key team member

– reputation impairment, such as a disgruntled client holding forth on social media

– a technology crash

– a security breach of client information

– a fire or damage to Stu’s office

– a market collapse.

Following these five steps doesn’t guarantee your business will not be disrupted by some cataclysmic event. What the exercise will do for you, though, is provide a far better chance of weathering whatever storm besets you.

I hope the process also will ease your yearend anxiety.

George Hartman is CEO of Market Logics Inc. in Toronto. Send questions and comments regarding this column to George’s practice-management videos can be viewed on