[In our current financial services business landscape of rapid change and hyper-competition, practice management and business development efforts take on a whole new urgency and purpose. While continuous training and practice management have always been long-standing features for the most successful financial advisors, RIAs, and advisor teams, the accelerating competitive and evolutionary business forces make them essential for ALL advisors and financial firms that want to survive and grow. The age-old resistance though by some successful advisors and firms against “training” and “practice management” efforts is harder to justify as accelerating rates of change are starting to compound and vastly altering the nature and business dynamic of the entire industry.
In the midst of all this operational, cultural, and technological change, businesses must make strong, conscious, strategic decisions on how to run and steer their firms in the face of these mounting challenges. This requires continuously learning new skills and approaches, adding new processes and systems, designing new client services, and rethinking firm purpose and goals. This is all driven by the fact that Change does not sleep, it has only been accelerating.
To explore where we are in the true nature and enhanced need for practice management, we reached out to Institute Founding Member Mark Spina, President of FLX Networks, and the Founders of their newly acquired practice management firm Focus Partners, Eric Sheikowitz and Michael Silver. We asked them questions to better understand how practice management education, coaching, and resources can practically help financial firms to not just survive but thrive in our new business operating reality.]
Hortz: What was the motivation behind FLX Networks’ acquisition of practice management firm Focus Partners? What are your plans for integrating them into your network for asset managers, financial advisors, and wealth management firms?
Spina: There has been a purposeful evolution with continuous enhancements in building the solutions available to the members in our network. For instance, we learned from onboarding new asset management members that many struggle with developing or sustaining a differentiated practice management program. It takes time, money, and effort, and, candidly, since it is not a portfolio management or a sales role, it comes under more intense budget scrutiny. As we have done in other areas, FLX has stepped in to create “synthetic scale” for our asset managers. Our acquisition of Focus Partners also offers our asset managers access to advisors, Centers of Influence, and home office professionals through a ready-built and time-tested practice management solution.
Focus Partners' extensive practice management capabilities are an industry-leading solution and a proven partner to many of the largest and fastest growing advisor teams. As a “compound company”, this acquisition represents a natural vertical integration of an existing partner on the FLX Solutions Exchange. Additionally, it provides a valuable, scalable, and customizable resource to the wealth management firms and their financial advisors joining the FLX Networks platform.
Hortz: What are the foundational views of Focus Partners on the purposes and goals for advisor practice management? How have you designed your firm to address and deliver on these goals in helping advisors grow their firms?
Sheikowitz: From a foundational perspective, it is very important for advisors and financial firms to take a step back from the day-to-day and spend time working “in” the business as much as they spend time working “on” the business. This may be antithetical to what they may have been told by others in rushing forward. The problem we have regularly seen is that advisors expend time and resources in trying to grow before they have built their practice into an efficient business with processes and systems to support and nurture that growth. To maximize results, a firm needs to think and restructure itself strategically.
Practice management and business development principles focus on the lifeblood of a practice. Having the right processes, procedures, and structure is just as important and acts as a catalyst to ensuring that business comes in the door, the new clients become loyal, and act as raving fans for referrals.
Silver: To address and deliver our practice management support to advisors, our firm was built around the concept of “customized but consistent”. While there are certain core concepts that we focus on with every team and firm we work with, we endeavor to purposely design a program around each engagement. This allows us to treat every client as if they were our only client.
Hortz: How do you help advisors change their traditional practices and habitual ways of doing business to implement improved strategy and operating capabilities for their companies?
Sheikowitz: We are very fortunate that the clients and firms that come to us are ready to embrace change and execute new initiatives that are impactful to their practices.
Silver: As to helping advisors change their way of doing business, we share best practices and introduce proven business operating ideas and concepts with our clients. Coupled with instilling a sense of constant accountability, our clients see added value and results.
Hortz: What are the key skills you feel that advisors need to develop in order to succeed and thrive in today’s rapidly changing business environment?
Sheikowitz: Advisors need to understand and embrace the fact that our landscape has changed forever in the past 3 years. They need to be willing to adapt to the needs of clients, prospects, and Centers of Influence (COI’s) that they want to build relationships with. Clients are looking to their advisors more and more for personalized services that transcend the traditional client-advisor relationship. Having real, meaningful, and engaging conversations with clients, prospects, and COI’s are going to be a critical skill to ensure that advisors hone in on their needs and continue to remain relevant.
Silver: We also see advisors becoming more skilled in the digital medium, whether for business development purposes or conducting client reviews. And finally, advisors need to develop leadership skills. Many advisors are leading teams, and this brings a whole new skill set into play. They are not just managing assets; they are managing people as well.
Hortz: Can you outline for us what your three-step Practice Optimization Approach is and how it helps advisors develop a successful business?
Sheikowitz: Our practice optimization approach has a three-pillar framework:
Plan and Position – focusing on defining strategic direction and creating a business and marketing plan that aligns with your goals and objectives.
Organize and Optimize – ensuring the practice is supported by the right team and infrastructure, managing resources effectively, and utilizing tracking systems for consistent execution.
Execute and Engage – implementing effective programs, campaigns, and tactics to execute the plan and engage with clients, prospects, and Centers of Influence.
Within each pillar there are dozens of areas that we can focus on - from business planning to roles and responsibilities to business development.
Silver: Because each advisor and firm is different, we leverage our approach to identify and target the specific areas of importance that are going to have the biggest impact. And the great thing is, we can work within different areas of the framework at the same time with different team members to leverage time and resources.
Hortz: With over twenty years of experience coaching solo advisors and advisor teams, what have been the most effective and practical tactics to helping advisors take their practices to the next level?
Sheikowitz: Let us look at it from two different perspectives.
On the business development side, it would be:
Leveraging digital mediums – From podcasts, to videos, advisors have so many fantastic ways to reach their audiences. Also, digital networking opportunities are endless as well.
COI relationships – Leveraging Centers of Influence for joint marketing has always been effective. Finding COI’s that are hungry to grow their business and are also looking to market in the same area as you can become great partnerships. And the icing on the cake is that this will also lead to referrals as well.
On the pure practice management side, it would be:
Roles and responsibilities – For teams, we always want to be doing the right things, at the right time, with the right people. Roles let you harness people's strengths, build processes where necessary, and create a scalable environment that can support growth.
Service Models – Every client deserves to be serviced fairly, but as a practice grows, it is hard to service everybody the same way. Having a consistent and fair service model allows you to create capacity and spend time with those clients who you want to replicate and who can help you grow.
Hortz: Besides coaching, Focus Partners can also become employed in an outsourced “Virtual Practice Management” capacity. What exactly is the service and how does that get deployed in a firm?
Silver: It comes down to the “build or buy” scenario. You can try to build it yourself, or you can buy/outsource the expertise. Virtual Practice Management is the concept of outsourcing your practice management needs (coaching, training, advisor development, sales management, chief operating officer) to us and our team.
It starts with an assessment of the firm’s needs (customized but consistent) and from there we create a program that delivers what the firm needs when they need it. We assign dedicated resources to each firm, this way there is a consistent face when it comes to delivery. Our ultimate goal is to ingrain ourselves in the firm so from their perspective, and their advisors’ perspectives, we do not feel like an outside resource but are just part of the internal team.
Hortz: How can advisors and asset management firms on the FLX Networks platform access your new practice management division? Any recommendations or advice you can offer on how to best work with and integrate them into your firm?
Spina: In short, firms should look at us and specifically Focus Partner as a natural extension of their team. We have an extensive curriculum ready for deployment and we pride ourselves on continuously developing capabilities tailored to our members’ needs. We see demand and utilization growing further, with engagements at enterprise, branch, and team levels.
Focus Partners has proven themselves as one of the best in the business. We are pleased to add this to our solution set for our members in traditional live settings and more modernized on-demand offerings. Overall, they will advance FLX's position as a modern network of investment and business solutions.
The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We operate as a business innovation platform and educational resource with FinTech and financial services firm members to openly share their unique perspectives and activities. The goal is to build awareness and stimulate open thought leadership discussions on new or evolving industry approaches and thinking to facilitate next-generation growth, differentiation, and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors — Ultimus Fund Solutions, NASDAQ, FLX Networks, TIFIN, Advisorpedia, Pershing, Fidelity, Voya Financial, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines).