Build a Scalable Financial Advisory Practice and Attract More Clients

Are you a financial advisor looking to take your practice to the next level? If so, building scalability into your business plan is the key to attracting more clients and achieving sustained success. Scaling is not just about growth; it's about efficiently increasing your capacity and versatility while keeping expenses in check.

In this blog, we'll delve into why scalable advisor practice management is critical for your long-term prosperity. We'll also explore different financial advisor service and compensation models to help you tailor your approach. Plus, we'll share five actionable tips to build a scalable financial advisory practice, from creating an effective business plan to leveraging technology and cultivating niche markets. So, let's get started on the path to building a growth-focused financial advisory practice that stands out in a competitive market.

Why is Scalable Advisor Practice Management Critical to Long-Term Success?

Scalability, not to be confused with “growth,” is your business’s capacity to grow revenue at a faster rate than expenses. Generally, building scale comes down to building efficiencies in your practice that allow you to increase capacity and versatility in a cost-effective way. A business plan is an important step in the scaling process. Building scale is critical to long-term success because, without scaling your business appropriately, you will struggle to adapt to changes in the marketplace and forfeit profits.

What are the Different Financial Advisor Service Models?

The different financial advisor service models include asset management, financial planning, wealth management, and transactional/commission business. Each has its own licensing requirements and client base, though there is an overlap among them. The products and services offered are a function of the service model, with financial advisors sometimes working with other professionals to provide comprehensive service to clients.

What Are the Different Financial Advisor Compensation Models?

There are essentially three different financial advisor compensation models: commission-based, fee-based, and fee-only. Commission-based financial advisors recommend and sell financial products and get paid by the transaction. Fee-based financial advisors charge clients a fee equal to a percentage of the assets they manage for the client. They can also charge clients a specific, flat fee for a particular service. A fee-only financial advisor only charges a fee for the services she/he provides. These fees can be in the form of an hourly rate, a flat fee per service, or a percentage of assets under management. It’s important to note that fee-only advisors are bound to act in their clients’ best interests at all times (i.e., they are held to a fiduciary standard).

5 Tips to Build a Scalable Financial Advisory Practice

While every advisor’s practice is different, there are time-tested steps that can be taken to build a scalable financial advisory practice. Creating efficiencies and leveraging technologies – as well as other resources – to put time back into your day and help focus your attention on business-building activities is the key to long-term success. Learn more about solutions to solve the scaling challenge.

1. Develop a Financial Advisor Business Plan

All successful advisor practices are built upon SMART goals – specific, measurable, achievable, and timely – that have been captured in an advisor business plan. Sharing the plan with employees and revisiting it often will ensure everyone is working toward common goals and those goals are relevant.

2. Explore Outsourced Tools for Financial Advisors

The most valuable asset a financial advisor has is time. Outsourcing certain tasks not only allows the business to leverage expertise it may lack in-house, it can expand product offerings, create efficiencies, and put time back into everyone’s day.

3. Implement a Financial Advisor Tech Stack

Technology continues to separate good advisors from great ones. Having the right platforms, software, hardware, and people available to support it all translates into an elevated client service experience for both employees and clients. Learn more about how to implement your financial advisor tech stack, and other fintech information.                      

4. Adopt Financial Advisor Marketing Strategies

There’s a big difference between having a great value proposition and making sure clients and prospects are aware of it. The difference is Marketing. Your client communications, social media footprint and other engagement activities are drivers of growth. Consider leveraging a third-party marketing platform to get your message out there… and keep it out there.

5. Cultivate Niche Markets for Financial Advisors

Being all things to all people is perhaps not the best use of an advisor’s time. Focusing on specific groups, aka niche markets – by gender, age, occupation, and interests – is an efficient means of targeting your engagement and forging stronger bonds with your clients.

Building a Growth-Focused Financial Advisor Practice

Building a financial advisor practice that is growth-focused and sustainable doesn’t happen by accident. It takes thoughtful preparation, efficient execution, high-quality solutions and resources, and ongoing diligence to ensure the practice’s business plan is being followed. Below are some best practices that can be implemented to build scale in your advisory business.

#1 Best Practice: Outsource

Deploying third-party firms to support your business is a common means to create scale. Outsourcing not only puts experts to work  for your business, it gives you and your staff time and resources to focus on business-building activities.

#2 Best Practice: Leverage Technology for Efficiencies

The kind of client experience and account access your clients expect are achieved with technology. Keeping up with the latest innovations isn’t easy, especially when you are running an advisory practice. However, it’s not something you can compromise on. Learn more about the importance of technology when building scale in your business.

#3 Best Practice: Communicate

Communicating with clients, prospects, your employees, and your centers of influence (COIs) can lead to increased referrals and smoother operational efficiencies in your office. Making yourself available to community groups or local media as an expert willing to speak at an event or be quoted in a story builds credibility and name recognition. All of this can put you top of mind for people searching for your expertise.

#4 Best Practice: Work With an Experienced Firm

Working with the right firm, one that brings experience, state-of-the-art technologies, broad offerings, and personalized consultation services, can make or break your efforts to scale your business properly. Be sure to work with a firm offering custom support and service, as well as capabilities and resources to invest in innovations that support you continually. To learn more about how AssetMark can help you scale your business, contact one of our consultants today.

Take Steps to Start Scaling Your Practice

Scaling your financial advisory practice is not just a desirable goal; it's a necessity for staying competitive and achieving long-term success in today's dynamic market. By developing a solid business plan, embracing technology, and focusing on efficient marketing and niche markets, you can build a practice that not only attracts more clients but also provides exceptional service. Remember that communication, both with your clients and industry experts, is essential for growth and credibility.

When you work with the right firm, like AssetMark, you gain access to the expertise, technology, and personalized support you need to scale your business effectively. So, take the steps to build scalability into your practice, and you'll be on your way to a thriving future as a financial advisor. If you're ready to explore how AssetMark can assist you in achieving your scaling goals, don't hesitate to reach out to our team today.