Winning Ways: Real world strategies to help you reimagine your practice

By Dwarka Lakhan

"I have no doubt whatsoever that every advisor who reads this book will find something with the potential to elevate their business to new heights."

George Hartman
CEO, Market Logics, Inc. and author of Risk is a Four Letter Word; Blunder, Thunder, Wonder; and Exit is a Four Letter Word.

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"A compelling, well written and easy to read book which provides potential and experienced advisors with comprehensive insights into how successful financial advisors build their practices by adopting flexible strategies to meet the ever evolving needs of investors. An educational tool for advisors and also a very helpful guide to what investors should be aware of when choosing a financial advisor."

Philip Armstrong
Past Chairman of the Investment Funds Institute of Canada and the Mutual Fund Dealers Association of Canada; and former CEO of Jovian Capital Corporation and Altamira Investment Services Inc.

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"A must read for advisors. Unbiased advice from hundreds of practitioners who successfully run their own businesses. You can spend a lifetime learning what you can find in this book."

Fidel N. Hinds
Consultant, Caprion Consulting International
Former Managing Director with the Royal Bank of Canada

• Language: English
• Publisher: Tellwell Talent
• Release date: Apr 6, 2020
• ISBN: 9780228804710

Dwarka Lakhan

Dwarka Lakhan's extensive training and corporate experience, combined with thousands of interviews in the course of writing more than 2,500 articles for dozens of publications, have provided him with deep insights into what works and what doesn't when building a successful business. He recognizes that strategies and tactics cannot be restricted to a box when it comes to running a business. That is why he shares the real world experiences of hundreds of professionals who live and breathe practice management to provide readers with a variety of options to execute their vision and reimagine their practice. Dwarka holds a Master's in Business Administration; an undergraduate degree in Economics and a postgraduate Master's Certificate in Integrated Marketing Communications. He is a Fellow of the Institute of Canadian Bankers and a Fellow of the Canadian Securities Institute®.

Book preview

Charting and Managing Your Course

Where is your practice headed?

You must plan for the speed bumps, road blocks and detours you might encounter along the way

Whatever the goals for your practice you must determine where you are today and what strategies you must put in place to get to where you want to be.

Along the way you will have to slow down at speed bumps and stop at roadblocks and may even have to make detours on your course. But with diligent planning and a sense of purpose you can overcome the obstacles in your path and get to your destination.

Often, you will have to pause to catch your breath and reenergize yourself to take your practice to the next level. Or re-examine your strengths and weaknesses in order to develop new approaches to face off against your competition.

The truth is: there is no scope to become complacent if you want to succeed. You always have to be at the top of your game. Opportunities will not just fall in your lap. You will have to find ways to realize growth and be able to constantly monitor your successes as well as your failures.

Keep in mind that if you do not know where you are going, you would not know when you would have arrived at your destination.

That is why it is always prudent to have a business plan which is like a roadmap to your destination. But your plan must not be written in stone. It must be flexible enough to accommodate detours along the road to your destination and allow you to change course just in case your path is blocked or if there is too much traffic.

Always be aware that the environment in which you operate is constantly evolving, fuelled primarily by technological innovation, regulatory changes and new entrants. But fear not, the principles of running a successful practice are pretty much constant.

It is therefore imperative that you have realistic goals and the determination, survival skills and resources to be able to swim with sharks in an increasingly competitive environment, and yet survive. You must recognize that attaining your goals is a function of reality and expectations. If your experience exceeds your expectations then you would have attained or surpassed what you originally set out to do.

You must recognize that the ultimate goal of all businesses is to be profitable, unless you are providing pro bono services or running a charity. So, while growing your book of business is critical, and is directly correlated to the size of your practice, your success will be eventually measured by how much money you make. Of course, the unquantifiable element of personal satisfaction derived from building your business is of equal importance.

There is no doubt that the success of your practice is in your hands and only you and the team you put in place can make it happen. Remember, one day, you will want to retire and sell your practice. And you will want to derive the greatest value for the many years of hard work you spent building it.

Establish your roadmap to the future

A business plan can help you get to where you want to be

A business plan is a powerful tool that can help you reach your goals. It helps you define where you want your practice to be within a certain time frame and how you plan on getting there.

It’s like a roadmap to get to where you want to be, says Lou D’Aversa, senior financial consultant with MD Physician Services Inc. in Toronto. It keeps you on track to achieving your goals and is paramount to your success.

Business plans come in many shapes and sizes and there is no single right way to create one, says George Hartman, managing partner of Elite Advisors Canada Inc. in Toronto. But they all serve the same function: they are the blueprint for the success of a business.

A business plan gives you direction and purpose, Hartman says. It also helps you to allocate resources and allows you to measure your success.

Here are some simple steps to consider when establishing a business plan.

Assess where you’re going

If you don’t know where you’re going, Hartman asks, how will you know when you’ve arrived? First, you have to define your vision for your practice, that is, what you want it to become within a defined period. Closely aligned to your vision is your mission which describes what you want to be to your clients.

These big-picture goals provide your practice with a purpose and the reason for your existence. They are the foundation for all other decisions, says Hartman.

Take stock of where you are

Understanding your operating environment and the things that can affect your practice is essential to executing your business plan, D’Aversa says.

At a macro level, you must be able to do a thorough analysis of the environment in which you operate. For example, you must determine who are your competitors? What external factors would impinge on your plan? Do I have the resources to do what I want to achieve?

Having answered these questions, you should then determine where you fit into the competitive environment.

Hartman recommends that you look at your practice and assess what you are doing now; your resources; and your strengths, weaknesses, opportunities and threats. Then determine whether you have the capabilities, knowledge and resources to follow through with your plan.

Develop a plan of action

Once you know where you want to go, you have to articulate how you will get there. You have to create strategies for achieving your objectives and define what needs to be done by whom, when, and how. You must get into an execution mindset at this stage, says D’Aversa. It’s all well and good to have a big-picture vision, but realizing that vision means taking appropriate action.

In addition to your strategic plan, Hartman advises that you must also develop marketing, sales, operational and financial plans. An important question to ask is: Do I have the money and resources to execute my plan?

Set measurable objectives

How will you know you are moving toward achieving your goals? One way is to make sure your objectives are attainable and measurable. Another is to develop metrics for tracking growth, costs and revenue.

Measure by activity, says Hartman. For instance, assess the impact of your marketing initiatives or calculate the cost of servicing clients. Make adjustments, if necessary.

And finally, adds D’Aversa, make sure your plan is flexible to accommodate changes over time.

Assess your growth potential

Evaluate the competitive landscape and implement strategies that differentiate you from the pack

If you want to grow your business you must first assess your potential for growth. To do so, it is important for you to have a thorough understanding of the market space in which you are operating, as well as your capacity to take on new clients.

Knowing your market will allow you to put measures in place to deal with competitive challenges, says Aiman Dally, CEO of Copia Financial Solutions in Toronto, as well as enable you to refine your value proposition and align your resources to take advantage of potential opportunities.

You must know what you’re up against, adds Dally. Otherwise, you will continually run into roadblocks. As a result, you could waste valuable time reinventing yourself and re-evaluating your approach to growth.

Here are some tips to help you assess your potential to grow your business.

Know your competitors

Identify those who offer services similar to yours.

Find out as much as you can about them, including the products and services they offer, their areas of specialization and any niches they might be serving, advises Dally. This information will allow you to implement strategies that differentiate you from the pack. The more you know about your competitors, he adds, the better you will be able to face off against them.

Know your target market

Different markets have different characteristics. Ask yourself questions such as: Are you targeting the broad market or are you planning to serve a particular niche, such as women or retirees? Do you have an idea of the size of the total market or the segment of the market you are planning to serve? Research will help you to identify new trends and emerging needs among target members of your market.

Plan for growth

Dally points out that persuading clients to choose you over existing providers or to switch their business to you can be challenging. Find out if there are any unfulfilled needs in your target market, he says, which may give you an opportunity to attract the interest of potential clients.

Once you have developed a strategy for attracting new clients, Dally says, you should also create a detailed plan with clear timelines so that you can track your growth. For example, how many new clients do you plan to recruit on a monthly, quarterly or annual basis?

Evaluate your resources

Executing your growth plan must take into account your ability to handle the increase in your client roster, your assets under management and the services you provide. Assess whether you have the resources to implement your growth strategy. Do you have the staff, marketing support, systems and funding to pursue and take on new clients? If necessary, Dally says, fill any gaps.

Also, take advantage of your strengths and fix the weaknesses that would prevent you from achieving your targets.

Once you have identified potential sources of growth, ask yourself questions such as: Do I have the resources to grow my practice? Do I have to make changes to my existing practice to take advantage of potential opportunities? How can I differentiate myself from my competitors?

Market yourself

Being able to get people to choose you over your competitors is a challenge to growing your business, Dally says. Find out if there are any unfulfilled needs in your market. That will give you an opportunity to fulfill those needs.

Get involved with trade shows, associations and other events aimed at members of your target market. You should also build relationships with centres of influence and educate yourself about the needs of potential clients.

Look at institutions that offer services to groups you have identified, Dally suggests, and spread the word about your services. If you believe opportunities lie within groups of engineers, or farmers, for example, offer to conduct lunch-and-learn sessions or educational seminars with these groups, he says.

Measure your success

Devise a process to track your progress, which should help you determine your rate of growth in new clients, assets and revenue. Should your growth targets fail to materialize, your tracking process should tell you why. If you are not achieving the growth you projected, then you should re-evaluate your strategy.

Three key pillars of business building

Basic ways to increase the size of your business

In general, there are three primary strategies that provide the foundation for building your business: client acquisition, client retention and increasing your share of clients’ wallets.

Each strategy has its own merits, says Mahesh Dwarkaprasad, project manager with Octane Capital Inc. in Toronto. But choosing the right strategy, or a combination of strategies, can make a big difference in how successful you are.

It is difficult to separate one strategy from the others completely, Dwarkaprasad adds. For example, referrals often come from existing clients, thus linking retention and acquisition activities. As a result, you must be flexible in implementing the most effective strategies, given your costs and resources.

Your growth strategy should focus on various types of costs rather than on just dollars, says Dan Richards, CEO of Client Insights in Toronto. Cost refers to the full range of factors, such as time, effort and energy that you will have to expend to increase the size of your business.

Existing clients are the easiest to work with. Richards recommends giving priority to increasing your share of their business. He says It is the best opportunity to earn revenue in the short term.

Dwarkaprasad agrees: You already have access to them, making it easier for you to talk to them about their needs that you do not currently fulfill.

To implement this strategy, which is part of retention initiatives, George Hartman, managing partner of Elite Advisors Canada Inc. in Toronto, says that you must offer a full range of products and services. He notes that the more products and services that clients own, the stickier and more loyal they are.

Indeed, if you don’t do this, Hartman says, someone else will. He suggests engaging clients in the process over the years, but be cautions that it may take time for you to satisfy all their needs: You must understand the total financial affairs of the client, and recognize that you do not have to do it all at once. But, he adds, persistence pays off.

Richards recommends starting with a financial plan for clients to gain an understanding of where opportunities may exist and where they may have assets that you can attract to your practice.

Dwarkaprasad suggests explaining to clients the benefits of having all their assets and services with you, such as simplified reporting, less paperwork, potentially lower fees, and more efficient and effective asset allocation. For example, he says, you can tell your clients that it is more efficient to manage their portfolio if all their assets are in one place, especially when it comes to matters such as efficient asset allocation, maximizing income and minimizing taxes.

Joanne Ferguson, president of Advisor Pathways Inc. in Toronto, also links retention to client acquisition and increasing your share of wallet. She emphasizes that happy clients trust their advisors and will provide the right kind of referrals. She views the business-building cycle as a progression: acquisition, followed by good service, leading to retention and resulting in increasing your share of a client’s business.

Regardless of which approach you take, there’s no doubt that client acquisition is central to building any practice. You must, however, note that it costs much more to acquire a new client than to retain an existing one. There is no consensus on how much more acquisition costs but estimates range from five to 10 times the cost of retention.

Ferguson says the true cost of acquisition depends on the service platform on which you operate. For example, the expenses incurred by advisors working for a large corporation would be different from those of independent advisors.

However, says Hartman most advisors do not understand the metrics of their business. They have no idea of what they are spending, and need to track new clients and new dollars to get a sense of the efficiency of their efforts.

Hartman recommends that the cost of retaining a client be compared to the revenue generated by the client. He notes that the longer you keep a client, the more likely it is that you will eventually receive more of that client’s business.

In fact, looking at the long term can be a highly profitable strategy. Hartman suggests assessing the potential value of a client if he or she is retained for their lifetime: the value can be far greater than the initial compensation received from the client. Hartman notes that there is a multiplier effect when you also consider referrals and a greater share of wallet. Indeed, the primary source of new business for most advisors is from referrals.

It is therefore critical to settle on the best fit for your own, unique practice from among these three basic pillars of business growth: acquisition, retention and increasing your share of clients’ business.

Breaking through the growth barrier

Five ways to take your business to the next level

Many advisors reach a point in their careers when the growth of their practices reaches a plateau. Even though it continues to be profitable, it is no longer growing.

Perhaps you have plugged away for years to achieve certain asset or revenue targets but just can’t seem to get to the next level. Or it may simply seem so much tougher to acquire new assets to grow your practice.

Getting past that barrier, suggests George Hartman, practice-management coach and author of Blunder, Wonder, Thunder: Powering Your Practice to New Heights, comes down to the question: Where do I want to go from here?

Adds Prem Malik, chartered accountant and financial advisor with Queensbury Securities Inc. in Toronto: Each advisor is different. Some might be comfortable being on a plateau.

But most advisors want to take their businesses to the next level, says Raymond Yates, financial advisor and senior partner with Save Right Financial Inc. in Mississauga, Ontario. Their ultimate goal is to achieve sustainable growth, Yates says. That’s the challenge of running a successful practice.

Here are some ways to help your business break through the growth barrier:

Revisit your vision

It’s always about the vision for your practice, says Hartman. And your vision is tied to your growth aspirations. To stay motivated, be sure you have clear priorities and targets. You must also have a strategic plan to guide you along the way. It should help you determine where you are today, where you want to go, and how you are going to get there.

Re-examine what you do well

You got to where you are today not by chance, Hartman says, but by doing certain things well. Look at the things you do well and build on them, he says.

Fix areas that need improvement, Malik says. If you continue to do things you are good at, your business will flourish.

Also, look at what your competitors are doing, Yates says, and introduce fresh ideas to get the attention of existing and potential clients.

Reposition your practice

It might be time to introduce new strategies, methodologies and branding, Hartman suggests. This may imply overhauling or adjusting the operations of your practice to keep up with changes in the environment. Revisit your marketing plan and your value proposition, says Yates.

Perhaps what got your practice this far just doesn’t cut it anymore, Yates adds. Don’t be afraid to make changes, if necessary, he suggests, such as adding new revenue streams.

Re-allocate resources

If, for instance, you are doing all the marketing, then you should re-allocate roles within your team, advises Hartman.

Some clients may consume a lot of your time, he says, holding you back from building your practice. If that is the case, he suggests segmenting your client base and re-allocating certain clients to other team members.

Acquire a book of business

Often, organic growth can be tough in a competitive environment. Instead, try growth by acquisition. Yates suggests that you buy books of business to fuel your growth. You would be able to grow, he says, by integrating new books of business into your existing practice.

Repositioning your practice for growth

It might be necessary to look at your business

with a new pair of glasses

Expanding beyond a stagnant period or growth barrier can be a challenge for some advisors who have built a successful practice, says Sara Gilbert, founder of Strategist Business Development in Montreal.

You might have set yourself a target to achieve a certain asset level and, once you got there, found that growth has become elusive.

Part of the problem may be that you have been doing things the same way for years, Gilbert says. You may find it hard to change your ways or adapt to a competitive environment — which might have changed since you first achieved your growth target.

Additionally, some advisors become too comfortable and complacent once they have attained a certain size of practice. They are not hungry enough to look at different ways to grow their practice. Yet, like most advisors, their desire is to achieve sustainable growth.

Here are some ways to help you break through the growth barrier:

Revisit your goals

Take a step back and re-examine your practice, Gilbert says. Establish what you want and why you want it. You must know what your goals are before you can begin to determine how to achieve them.

You must know what motivates you, Gilbert says. You may have to try on a new pair of glasses.

Once you have established your objectives, analyse your business. Creatively deconstruct your practice, she says. Take it apart and rebuild it.

Take stock of your strengths

You obviously did some things well to get to where you are today. Look at the things you do well and build on them.

But be cautious: what worked for you several years ago might not work today. For example, Gilbert says, you might have to find new ways of networking and getting referrals. Or you might have to change your fee structure.

Seek outside help

Gilbert says it is often necessary to ask for assistance in repositioning your practice for growth. That could mean hiring a coach, seeking the assistance of a mentor or speaking to other successful advisors.

Surround yourself with people who are more successful than you are, she says. Do what you can to get some of the vibe that accompanies success.

Make necessary changes

You might find it necessary to make changes to your practice, Gilbert says, and reposition yourself in the way you want to be known. This might involve introducing new strategies and changes to the way you operate your business. For example, you might have to redefine what type of clients you would like to attract and how you would serve them, she says.

Restructure your team

It might become necessary to re-allocate roles and responsibilities within your team to improve efficiency and free up your time to focus on your growth initiatives.

Gilbert recommends involving your team in the process of making changes. It is not always about doing more, she says, but rather about being more efficient.

Taking cues from the competitive landscape

Understanding your competition is critical growing your business

Having a good understanding of the market space in which you operate is critical to growing your practice. This knowledge will allow you to put measures in place to deal with competitive challenges, refine the range of products and services you offer and align your resources to take advantage of opportunities.

For example, if you’re prospecting for clients, you should find out who your competitors are, says Jim Vlahos, senior vice president of sales at Franklin Templeton Investments Corp. in Toronto. You should also find out their backgrounds. What do they do? Who do they do it for? How do they differentiate themselves?

You can stay on top of what your competition is up to through industry research, media reports and professional publications such as whitepapers, and by networking with your peers, Vlahos says.

Your own clients are also a good source of competitive information, he says.

Here are some tips to help you assess the market space in which you operate:

Know your competitors

Identify financial advisors who offer products and services that are similar to what you offer, Vlahos advises. They are your closest competitors. Find out as much as possible about them, including the products and services they provide, their areas of specialization and any niches they serve.

Learning about your competition is also helpful in retaining your existing clients because you will be kept up to date on issues such as fees, communication trends and product mix. To stay ahead of your competitors, watch for emerging trends you can capitalize on.

Determine your target clients

Different markets have different characteristics. Determine which segment of the market or niche has the best potential for growth.

Based on your understanding of the competitive landscape, find out whether the segment you are planning to serve is large enough to support your growth plans. Also, look at the capabilities of your competitors who serve the same market, Vlahos says, and how they differentiate themselves.

How do these advisors interact with centers of influence such as lawyers and estate planners? How do they educate their clients? How do they construct their portfolios? Answers to these questions can help you develop appropriate strategies to take on your competitors.

Put information you acquire to use

The information you gather from your assessment of the competitive landscape should allow you to plan for the growth of your practice. Persuading clients to choose you over existing providers or to switch their business to you can be challenging. But information you gained by analysing your environment might help you locate unfulfilled needs, Vlahos says.

You can capitalize on what you know by building your business around meeting those needs.

Five ways to ‘leapfrog’ your competition

Identify and promote your points of differentiation

Leapfrogging your competition can put your practice on the road to success. It might seem challenging in a highly competitive environment in which the products you sell and the services you provide have been commoditized. And your peers are flogging the same fare.

But therein also lies the opportunity to jump ahead of your competition, says Nadira Lawrence-Selan, communications and public relations consultant with Hathleigh Consulting in Woodbridge, Ontario. Your peers are most likely travelling the same road day after day. So, you’ll have to find ways to differentiate yourself and take another road.

Differentiating your business will take significant planning and commitment, Lawrence-Selan says. But at the end of the day, it can be very rewarding.

Here are five ways to leapfrog your competition:

Analyze your competition

Conduct a detailed review of the competitive landscape, says George Hartman, CEO and co-founder of Elite Advisors Canada in Toronto. Make a list of your competitive advantages and disadvantages, Hartman suggests, and determine the unique characteristics you have.

Then, determine whether you can leverage your competitive advantages or take advantage of your competitors’ weaknesses.

Also, assess what you have done well in the past, as well as the mistakes you have made, adds Lawrence-Selan: Can you duplicate your past successes? What did you learn from your mistakes? The answers to these questions can give you an opportunity to develop unique strategies to leapfrog your competition.

Get input from your clients

Your clients are the best source of information about what you do well. Ask them why they do business with you and what can you do better, Hartman says.

For example, a client might say, I like the fact that you’re always available or I like the fact that you’re flexible. Use their input to help you develop your plan to overtake your competition.

Revise your value proposition

Review your existing value proposition and revise it to incorporate the unique differentiating factors you have identified.

For example, you may wish to differentiate yourself on fees, service and flexibility. Make sure your value proposition is unique, not just boilerplate, says Lawrence-Selan. Otherwise, you would not be seen as being different from your competitors.

Establish a plan

Put together a comprehensive and realistic plan made up of strategies and tactics to help you differentiate yourself from your competition. Your plan might include a communications strategy to show what separates you from your competition.

For example, Hartman says, you would not say you’re better than a bank, for example, but you might wish to promote the fact that you’re more flexible.

Once you have established a plan, Lawrence-Selan says, you must stick to it diligently.

Create a buzz

Promote yourself to a target group, Hartman says. Adds Lawrence-Selan, be entrepreneurial in creating a buzz about the new you.

Use all available media, including social media, to build your new brand and promote your new value proposition.

How to re-engineer your practice

Re-evaluate your practice as well as the way you serve your clients

It will become necessary at some point for you to re-engineer your practice as your business and the environment in which it operates evolve.

As your practice grows, it becomes more complex, says George Hartman, managing partner and co-founder of Elite Advisors Canada Inc. in Toronto. You might find that you’re spending more time managing your business than building it.

That is when it becomes