As we approach NCAA college basketball’s March Madness tournament, a common refrain is “survive and advance.” Teams just want to win the next game so that they get one step closer to the championship. This idea may work for one year’s title run, but it may not be sustainable for the long term, and it certainly doesn’t work if you are trying to run a successful advisory business.

In a study conducted by JHI and the Financial Planning Association^®, and highlighted in our 2024 Wealth Planning Trends, we found that many advisors may be using a similar approach to running their practice. This “win the next game” mindset can lead practices to meet their growth goals only temporarily and partially. As a result, they survive to live another day but don’t have a game plan that allows them to unlock their true potential so they can fully realize their growth goals.

Luckily for those of you reading this article, our study also revealed six key characteristics of those advisory practices that are consistently seeing organic growth. More specifically, we defined successful organic growth as bringing in 10 or more new clients in the past year.

1. The anatomy of a business plan matters

Many of the advisors in our study had a business plan, and although the plan may have been comprehensive, it lacked a structured approach to growth. More specifically, when we asked what metrics advisors were using to track growth, they mentioned assets under management (AUM), new clients, and new revenue. But these metrics only partially answer the question of how to continually grow because they focus on lagging indicators. While these are certainly important, there are a number of leading metrics that lead to these outcomes. Notably, we found that practices focusing on client satisfaction and prospect meetings were able to achieve greater growth.

2. Knowledge vs. action

Many advisors in the study knew what they needed to do to foster growth. However, the gap between knowing and doing was often a stumbling block.

For example, 64% of advisors thought it was important to have a clear plan for growth but only 30% said they actually had this plan in place. In many cases, short-term circumstances got in the way of advisors being able to implement and focus on their growth plan. For example, many advisors noted that client requests about cryptocurrency, or not wanting to appear too “pushy” or “salesy,” got in the way. In other cases, the lack of a clear growth plan stemmed from not taking the time to develop individual or team skills.

In the end, success and growth comes down to taking the time to implement a growth plan, but also focusing on what you’re good at and the services that will truly drive growth.

3. The power of teams

Our study revealed that firms with teams grew faster than solo practitioners. In fact, growing from a sole practitioner to a team of just two to three people nearly doubled the chances of bringing on 10 or more clients in a year. Now, this isn’t to say that if you’re a sole practitioner you should instantly go out and partner with the first advisor you run into. Creating the right partnership or team is key.

The study also found that making sure every team member understands their role and how it contributes to the practice’s growth plan is a significant driver of success. For example, those teams that strongly agreed with the statement “team members fully understand goals for the business” were more than twice as likely than those teams that only “somewhat agreed” to have added 10+ clients.

4. Systems and processes

A strong foundation of systems and processes was found to be crucial for sustainable growth. An overwhelming majority (89%) of advisers agreed that having the right processes and systems is critical to business growth. However, only 59% agree that they have completed this work.

These processes are necessary for advisers to attract and onboard new clients, keep staff from burnout, and achieve desired client satisfaction levels. And while an informal process was used by a number of advisors in the study, I think we can all agree that a formal process is much more sustainable and likely to produce results. Specific to organic growth, that process should focus on making sure the prospective client experience is documented and leverages workflow automation where possible

5. Engaging the ideal client

Defining the ideal client is one thing; actively engaging them is, as we found, another. Those practices that achieved the greatest growth did two things.

First, they defined their ideal client. Second, they made sure they were actively engaging with them. This included marketing materials, strategic wording of their value proposition, outreach and educational efforts, and even their office décor and setup.

To succeed in this area, I think it important to ask yourself, “How are we communicating or ‘speaking’ to our ideal client in our marketing efforts and experience design?”

6. Mindset matters

Finally, we asked advisors to describe themselves. Specifically, we asked if they would describe themselves as resilient, optimistic, gritty, and/or curious. Many respondents described themselves as more than one of these, but what is interesting is that the advisors that achieved the greatest growth described themselves as optimistic and/or resilient.

I don’t mean to suggest that you need to change who you are, but I think this finding speaks to an opportunity to review how you communicate to prospective clients through your marketing materials, website, or other modes. Are you highlighting the ideas of resilience and optimism? If not, is there a way to enhance these ideas?

I think we’ll see all six of these ideas play out during the NCAA basketball tournaments. Teams that ensure they’ve practiced as if it’s a real game, teams where every player understands their role and plays to their strengths, and teams that take the court with the mindset that they’re going to win.

As you watch, I encourage you to think about those teams that are not only surviving but thriving, year in year out, and how those characteristics have been built into the program’s DNA. In addition to being one of the year’s more entertaining sports events, March Madness may also be the perfect catalyst for you to achieve your practice’s growth goals.

 

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