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| > The Practice > Practice Builder |
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| 'Being Done' for the Smaller Firm |
| by
David J. Drucker
| 07-17-08 |
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Continued from page
2.
Technological tools and other resources available these days to advisory firms of all sizes do tend to make the picture a bit fuzzy.
"When I first started my practice, I thought that if I ever made it to 100 client families, I'd be 'done,'" said Wayne Titus of AMDG Financial in Plymouth, Mich. Yet he's well past that mark now and still doesn't know exactly where the end point is.
"I never felt the need to maintain a client minimum, nor decide that when I reach 'X' dollars of assets under management, I'd be 'done,' " he said. "At some point down the road, if it makes sense to add more personnel to support delivery of services, I may decide to do that, but given the processes we've put into place and the excellent support I have, I don't see the need for that for quite a few years."
Some might say that the advisors I've quoted are too new in business (although most have long careers in financial services, working in other capacities before starting their own firms) to know what they're actually going to do in five or 10 years. For example, we get a cautionary tale from Ted Feight, who operates Creative Financial Design of Lansing, Mich., with two assistants and has worked in financial services for 34 years:
"During the late 1980s and early 1990s, I thought I had grown my practice to the point that I stopped taking new clients. What a mistake that was," he said. "Now, I have about one funeral a month. My older clients, who have the larger accounts, are dying off. I had slowed down my marketing and now find it hard to get the rusty wheels moving again."
Feight suggested that advisors who are capping their practice growth should never consider themselves completely done with growth.
"As someone once said, 'The first step to moving down the ladder of success is when you stop moving up it and try to stand still," he said.
As Feight pointed out, "being done" isn't impossible, but advisors should take precautions to prevent their practice from declining before they're ready to leave the business.
The more interesting question to me, though, is why some advisors so readily take to the "being done" concept while others have trouble relating to it. The former tend to be advisors with operations they've deliberately limited, in some fashion, so as to preserve a work-life balance that is, for them, of the highest priority. Does that mean that other advisors who don't "get" the "being done" concept have unbalanced lives--or do they simply have a different view of what it means to serve clients?
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An independent financial advisor since 1981, David J. Drucker, MBA, CFP has also been a journalistic voice since 1993. Collections of Drucker's entire body of work can now be purchased at www.DavidDrucker.com.
The author is not an employee of Morningstar, Inc. The views expressed in this article are the author's. They do not necessarily reflect the views of Morningstar. |
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