young businessman thinking about alternatives

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: As a senior executive in a mid-sized dealer firm (250 advisors) who has been tasked by the board to create an advisor development and retention strategy to serve the firm for the next 10 years, I’d welcome any general advice regarding an overall approach to this assignment.

Recruiting obviously is a priority. However, I also know that the real value in the firm is the advisors we have today. My quick calculations revealed that we have approximately 50 advisors in their mid- to late 60s and, while they represent only 20% of our advisors, they collectively manage client relationships that represent 50% of our revenue. We must not only retain them, but also secure their books of business through an internal succession program.

Your thoughts?

Coach says: First, congrats on starting this extremely important initiative. Assuming you are a regular reader of this column, you will have noticed my partiality toward both assisting long-term advisors in preserving the value of the businesses they have spent years building and offering advice on how to plan for their eventual (and inevitable) transition.

As your research shows, this issue can be critical for dealer firms, where margins are tight and the potential loss of revenue from key producers could conceivably put the firm at risk.

If there is any solace, know that you are not alone. I have a very large dealer firm as a client, and its executives are trying to cope with the same issue. Despite having lots of internal resources to apply, they still are concerned about the threat to billions of dollars in assets under management and to the tens of millions of dollars of associated revenue.

I am happy to share some of the high-level discussions we have had (anonymously, of course). I am sure they won’t mind because my advice essentially is the advice I have been imparting for years, whether in the context of a large organization or a sole practitioner.

My belief is that there is a natural order to the creation of a long-term plan for any business. As a big fan of Stephen Covey’s book, The 7 Habits of Highly Effective People, I subscribe fully to Habit No. 2: Begin with the end in mind. To me, that means you should begin your planning with a clear vision of what you want your business to look like at some point down the road – in your case, 10 years.

With that vision in mind, you then develop a strategic plan describing how you are going to realize your vision, followed by a business plan that describes the tactics you will use to implement that strategy. In more simple terms: vision determines strategy, which defines tactics. Here’s how this process could apply to your assignment:


Experience tells me that even among senior management in your firm, there can be different ambitions regarding the future course of the business. Some may want a large, national enterprise with many career advisors across the country, a prominent market presence, lots of integrated systems and uniformity of process.

Others in management would opt for a smaller, more intimate firm composed of a smaller number of high-producing advisors who are associated with specialized characteristics, such as market, book size, degree of independence, certifications and operational approach.

Of course, there is every variation in between and no right or wrong choice; it depends on your leadership’s aspirations.

Because people characterize success in their own way, I define “vision” as “what your business will look and feel like when it is as successful as you want it to be.” While the examples given below certainly aren’t exhaustive, the kind of questions your vision statement should answer are:

Do we want to be a regional firm of 250 top-performing advisors or a national organization of 1,000 advisors with various levels of experience? Or some variation of both?

What business model will appeal to us and the advisors we want to attract?

What will the advisor experience look/feel like in his or her association with our firm?

How will we differentiate ourselves in the marketplace?


Strategy is your high-level “big picture” of what you are trying to achieve. In more familiar terms, it is the “forest,” not the “trees.” Typically, you will have only one core strategy at a time. For example, your core strategy might be “to become the marquee firm in our market area for top- performing, independent-minded advisors.” Or it may be “to become the standout organization for attracting and building career advisors.” But it can’t be both.

Strategy communicates direction. It tells everyone: “This is where we are headed and here are the boundaries within which we are going to operate.” Strategy does not say, “Here’s what we must do next week.” Nor does it say, “Next year, we’ll add X number of new advisors.”

However, your strategy might tell us: “To realize our vision, we need to double our market penetration over the next five years.” Or “We need to change our positioning from a small, staid regional firm into a multi-dimensional national enterprise.” Or “We must broaden our focus from investment management to full-fledged wealth management.”

Because your strategy is deep-rooted and based on your vision, the former should be very slow to change. Jumping too quickly among strategies not only is inefficient, it also is confusing to everyone.


The best way to describe tactics is to differentiate them from strategy. Whereas strategy provides direction, tactics are about implementation. Strategy is what you want to achieve; tactics are how you are going to achieve it. Strategy is future-oriented; tactics focus on the present.

If strategy is your high-level “big picture” view, then tactics are what you see on the ground. They are the trees, not the forest.

While you typically will have only one core strategy, you are likely to have multiple tactics for achieving that strategy.

Tactical plans usually are designed to achieve incremental improvement, whereas real strategic intentions can change the path of your business radically.

Setting strategy is a “top down” exercise that determines the nature and direction of your business. It is something that you, as the person in charge of this project, must be confident in recommending to your board.

Implementing tactics, on the other hand, is more of a “bottom up” operation and, as such, can be delegated to someone else, although you should keep a close eye on choosing the tactics to ensure they are appropriate for your strategy.

Let’s look at one of the strategic examples above: “To become the marquee firm in our market area for top-performing, independent-minded advisors.” Your tactics should be wrapped in a business plan that includes:

Recruiting plan – objectives, advisor profile, recruiting activities, incentives, contracting.

Retention plan – advisor service, marketing assistance, training, contingency and succession planning.

Marketing plan – branding, communication, promotional activities.

Resources plan – technology, systems, staffing.

Referring to the example above, you may decide that the most effective approach to building your firm’s profile and reputation among top-performing advisors is to create a business in which the advisors look upon their relationship with your firm from the perspective of being a “partner” in the business rather than regarding the firm as just a place to purchase support services. In the case of the former view, one tactic you might employ would be to offer equity participation or profit-sharing based on criteria commensurate with the advisor’s performance.

A note of caution: wanting to minimize the time spent on strategy and jump right into tactics is human nature – because we want action right away. The problem with that, however, is if you are travelling in the wrong direction, how fast you are going won’t matter: you won’t reach your destination. In other words, if the vision and strategy aren’t right, the tactics won’t work either.

Therefore, I encourage you to expand your research beyond your own perspective. This is such an important assignment that it should be grounded in an unbiased, broad-based view of the world today and an insightful outlook for the future.

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