Advisors: Do you Have a Job, a Practice, or a Business?

By John Anderson, Managing Director, SEI Advisor Network on Thursday, December 18th, 2014


Thanksgiving is my favorite holiday. That said, one of my least favorite Thanksgiving traditions involves trying to explain to distant relatives and others exactly what I do for a living. Believe me, I have taken my own advice and have a beautifully crafted value provision that fits my targeted clients. But the value prop doesn’t resonate with the manager of a nationally owned tire store, the owner of a pawnshop, or a couple of practicing psychotherapists. In fact, it may not resonate with some advisors, either. When I say that I work with financial service business owners, most advisors can’t differentiate whether they just have a job, a practice, or a business – and to me, that is a problem.

What have you built?

What I tried to explain to my extended family and what I say to clients is that financial advisors really have a choice in how they want to run their “businesses.” It can be about them or about building a legacy. It can be about working with clients for multigenerational wealth or selling the product de jour (even if they don’t know what it is). For me, it is almost a question of short-term or long-term perspective. One of the easiest questions that determine an advisor’s perspective is to ask, “What have you built?”

• Some advisors have given themselves a job. A job that allows them to provide financial advice for a nice revenue stream, but still, a job.

• Others have created a practice by adding some workflows, maybe team members to add some scale, and possibly a successor. At the end of the day, however, it still revolves around them and being a key-person-dependent firm.

• Few have built a business. Businesses are sustainable, can outlive the founder, and have the ability to provide advice for future generations. Businesses invest in marketing, rather than treating it as an expense. Businesses have a monetary value with higher multiples.

TCB – Taking care of business

For most of us, December means finishing your 2015 planning sessions (and for some, starting them). A couple of you will be creating your New Year’s resolutions that you can share with your staff or stakeholders. This year, resolve to take a look at the accompanying checklist and frame your planning around these questions:

• What have I built?
• What am I building for?
• Am I setting myself up for a nice job, or am I building a business for the future?
• Do I have the right plans, partners and processes in place to be a sustainable firm for multiple generations?
• Will this practice die with me?



John Anderson is a contributor for Practically Speaking and also serves as a managing director for the SEI Advisor Network. www.seic.com



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