To Grow a Successful Wealth Management Business, First Focus on the “Business”

Stop and ask yourself this question, and answer honestly.  Are you a good financial advisor, or are you a good business leader?  Many of you would pick one or the other, some of you would say yes to both, and a few of you might ask “what’s the difference”.  The simple fact is that over the span of my career, the one constant characteristic I’ve seen in very successful wealth management practices is a leader who possesses the strategic and tactical wherewithal, or has surrounded himself/herself with right personnel, to run a powerful business.

Don’t get me wrong, the financial services landscape is dotted with skilled wealth managers.  These wealth managers have talents and experience that span a broad spectrum, whether it’s asset management, relationship management, or financial planning. But a skilled wealth manager does not (necessarily) make a skilled business manager. 

Let’s consider this in the context of the breakaway advisor, who is at the forefront of one of the biggest trends in our industry – the move to independence.  This advisor is immediately confronted with whether they can (or want) to be an effective business manager in addition to being a good wealth manager. 

Managing the Business

Breaking away to start your own advisory practice is a heady process. There are many things to take into consideration. It is essential that you focus on the basic elements of your business – your infrastructure, your technology stack, and your growth strategy – almost before you focus on wealth and investment management.

In my last article, I talked about how Financial Advisors can outsource to win. As a refresher, we discussed the importance of evaluating yourself and your business:

  • What you love to do?
  • What are you good at?
  • What do you do that adds the most value to your clients?

Anything that falls into “adds the most value”, but not into “love it” or “good at it” is an outsource opportunity. Do the work to find a reputable, outstanding third-party firm to help you.


Infrastructure looks a little different these days. Rather than finding the right office space, you will want to make sure all your employees have reliable computers and the ability to securely communicate and manage client information as they work from home.

Some things remain the same – choosing the right RIA and custodian partner, tracking the key performance indicators for your advisory practices, and making sure you’ve surrounded yourself with the right team (and are taking care of them!).  

Your strategic partners – namely custodians, broker/dealers, RIAs, and technology and investment partners – have come a long way in providing resources to support your business management.  At Kingswood, one of the resources we provide that is very popular for business owners, especially to new independent advisors, is the access we provide to comprehensive and affordable healthcare.  If you think about it, an advisor who has worked as a W2 employee for the bulk for their career has never had to worry about researching and implementing a benefits plan for themselves and their employees.  Now they do. 

It’s also more important than ever to track how your business is performing. You and your team should establish a shared dashboard to track and review the following on a monthly basis:

  • Revenue
  • Expenses
  • Profit
  • Client performance (on target vs. needs adjustment)
  • New client pipeline

I would argue that building and managing your team falls squarely into the concept of your business infrastructure. It should be a priority to surround yourself with talent, and then give them what they need to thrive. You should evaluate your team and their roles annually, with the following objectives in mind:

  • Development of job descriptions for each role
  • Identify training requirements for new and existing staff
  • Areas where there is lack of clarity or duplication of activity
  • Single point dependency for key tasks
  • Contingency planning in the event of staff absence

Technology Stack

Technology is your friend, and having a well-integrated tech stack is the secret sauce in running a solid business.  If you truly want to pursue aggressive growth and maintain above-average profit margins, you must think of your technology solutions as an investment, not just an expense.  Leveraging the work the tech stack can do for you and the pay off on this investment will be huge.

You and your team should conduct an annual technology audit to make sure you are up-to-date and maximizing your investment. Look at:

  • What systems do you operate? What do they do? Are there redundancies?
  • Is your technology integrated, or must your team carry information from one to the next?
  • Who is trained on each system?
  • What reporting are you getting out of your system?
  • Are your workflows current and reflected in how your systems operate?
  • Are there client engagement tools that you can use to empower and engage with clients more effectively?

Growth Strategy

When thinking about your marketing plans, what is it you hope to achieve? Larger clients? Attracting a new niche of prospects?  Perhaps you’re looking to build brand awareness? Brand recognition is valuable whether your goal is local, regional, or national in scope. Start by thinking about the information and education you already provide to your clients. Are there different and more efficient ways to deliver those messages across your website and other resources to help your business be more current and achieve your goals, such as:

  • Podcasts
  • Videos (a YouTube channel?)
  • Social media
  • Local organizations looking for speakers on financial services topics

If you’re not sure where to start, it’s fine to try new methods of marketing. But be sure to track the money you spend, on what it gets spent, and what you get for those dollars (aka your ROI). That will help you evaluate and plan for further marketing efforts.

Last, but not least, manage yourself

You have a lot going on. It is easy to get caught up in and overwhelmed by everything you feel you need to do. Cultivate the discipline to focus on doing those things that add the most value to your clients and to your business. Everything else should be delegated or outsourced.

Related: Financial Advisors Should Outsource to Win