On this episode of Advisor Skinny, Mike Walters shares some surprising statistics about investors and their actions after a death in a family. By understanding these forces, an advisor will be better prepared to retain clients’ assets.
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Category: Entrepreneurial Thinking
S2:E6 The Four Gaps
On this episode of Advisor Skinny, Mike Walters explains the four gaps: value gap, advisor gap, valuation gap, and gap value. We learn which can be the most costly to an advisor’s business and some methods to close or mitigate these gaps.
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S2:E5 Buying a Practice
On this episode of Advisor Skinny, Mike Walters discusses business valuation from the buyer’s perspective. He explains what it means to buy a business rather than a job and how that will ultimately lead to a more successful transition and future growth.
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S2:E4 Selling Your Practice
On this episode of Advisor Skinny, Mike Walters discusses business valuation from the point of view of the seller. He shares his thoughts on finding the right buyer, how to structure a practice so it’s more valuable to a buyer, and how to approach the sale with clients to allow for a smooth transition.
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S2:E2 Maximum Enterprise Value
Join us for this week’s episode of Advisor Skinny where Mike Walters discusses enterprise value. Not all business is weighted the same and Mike offers some ideas on how to think about maximizing enterprise value.
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S2:E1 Business Value and Alignment
On this episode of Advisor Skinny, Mike Walters starts the discussion around business valuation. He shares his thoughts about beginning the process, engaging professionals to help, and mistakes to avoid.
Join Mike for this engaging new season of the Advisor Skinny podcast!
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S2:E1 – Business Value and Alignment
Or
Moving a Few Miles can be as Difficult as Going Cross-Country…
Target Readers:
- Advisors struggling with change in their business.
- Advisors who are friends with Mike.
- Advisors who work with USA Financial.
Talking Points:
- Once you begin, you might as well keep the momentum going.
- Short-cuts are seldom short-cuts.
- Pruning & purging are liberating.
Here’s the Skinny,
I apologize for my recent absence. Very unexpectedly, we have moved homes.
My two oldest are in college (so mostly out of the house), which leaves just me, my wife, and our youngest. We had been halfheartedly (read as lackadaisically) looking for a new home over the past two years. We were in no rush. But then my wife stumbled onto a home she really liked and we could “see” ourselves in for many years to come.
And if you know the Walters, once a decision is made, we hit the gas pedal and get to high gear as quickly as possible.
Bang – bang real estate conditions in our area had a bit to do with the speed of things, but in a nutshell, we bought a new home in 24 hours and sold our existing home (of 15 years) in under 48 hours. Bang – bang – done. And to make things even more interesting, the previous owners of the home we purchased were relocating to Hawaii, so we bought their furniture as well. Then the buyers of our home expressed a desire to buy our furniture as they were relocating from Chicago. Bang – bang – done.
Its like we were in college all over again, throw the cloths in the car, bang – bang – done.
Or so I thought. We soon learned, the traditional moving companies were not interested in “our small job” as there was no furniture involved. That left us to do all the packing (not something we had anticipated) ourselves. But the good news is that we were able to prune & purge 15 years of accumulated clutter. This cut the moving job in half, literally.
In the end…
- It turned out that once we determined we were moving, it would have been just as easy (or easier) to tackle a full-on move, including the furniture. I think many businesses underestimate this truth in managing their projects. Once you green light a project, often times the small to mid-sized project isn’t any easier than the big monster project. The hardest part is just starting and gaining momentum.
- Getting rid of clutter is good for EVERYONE. Its liberating. It increases productivity. Satisfaction skyrockets. And efficiency becomes the norm. Again, I think many businesses (and advisors/executives/staff) overlook the need to prune & purge in order to keep focused on what really matters.
In that vein, below is a link to a great article from John Jones, Digital Marketing & Communication Manager at USA Financial. He shares great insight on using Facebook as a marketing & seminar tool. May I suggest you focus on John’s article while thinking how you could revamp, streamline and enhance your seminar/event marketing?
Here is the article link from July 24, 2018, Investment News, “Why advisors are turning to Facebook ads to fill seminar seats”.
I’ll be back at it with regular blogs and podcasts in August.
That’s the Skinny,
How Advisors Get Left Behind (hint: it’s only by choice)
Target Readers:
- Advisors seeking growth and direction.
- Advisors struggling to adapt and change as the industry evolves.
- Advisors looking to increase profits and/or the value of their practice.
Talking Points:
- How has your business changed over the last 10 years?
- Do you wish to retire or transition, but your practice valuation is stifled?
- Are you continuing to nurture your business successfully?
Here’s the Skinny,
We’ve all heard before the statement, “the only constant is change”…
Take a moment to reflect upon your business 5 years ago, even 10 years ago. Was it exactly as it is today? Or is it dramatically different?
Many in our industry started out as agents in the insurance/annuity business or as registered reps in the securities business. Yet today, a primary focus is more often directed toward assets under management. But even that segment has evolved.
Years ago, many advisors were managing their own portfolios for investors, Rep as PM (portfolio manager) is the common terminology today. Yet, now, the Rep as PM model is dwindling as advisors embrace the scalability of using third-party asset managers and TAMP programs like USA Financial Exchange. Indirectly, this new model has solved two crucial problems for advisors…
- Asset gathering (not asset managing) is the revenue lifeblood of a retail practice. The more time an advisor spends managing money, the less time they spend growing the practice and attracting new assets. Therefore, profits often go up in direct proportion to reduction in directly managing assets.
- Rep as PM and/or advisor managed portfolios, stifle the value of an advisor’s practice. They choke out scalability, which can crush the valuation of a practice (no buyer wants to buy “a job,” they want to buy “a business,” and it’s impossible to climb inside the head of the advisor managing the money), but the advisor focused on gathering assets can turnover their systems and processes along with the scalability of third-part asset management. Therefore increasing the valuation of the practice.
The point is, to use another true cliché, “if you aren’t growing you are dying.”
If you do not adapt and remain agile, eventually the marketplace may diminish your worth to the point of disaster. I am not a close follower of Sears, but it did not surprise me to see hundreds of stores closing. (Sears previously announced 166 stores to close this year. Now they’ve added 68 more to the list. There are less than half the Sears stores today as there were just 5 years ago.)
Strictly from my own consumer perspective, they do not appear to have kept pace with digital or online sales, their storefronts have fallen out of favor and seem out of touch with today’s shopper, and the few times I’ve wandered into a Sears store they struck me as being almost vacant on product and in a state of disrepair. At some point simple math will grind such a business to a halt.
Similarly, in our industry, think of the advisors who have not evolved. Conducting their business as if it’s from the 1980’s or 1990’s. Trying to live on commissionable products alone. It’s an uphill battle and we’ve all seen their decline. Business models need to adapt and evolve as the business changes… Or you end up feeling like Sears in an Amazon world.
So how do you stay ahead? Keeping your business on the cutting edge?
- You continually enhance your offerings and services, making yourself indispensable to the investor/client.
- You continually strengthen the relationship you maintain with the top 50% of your clients, targeting replication of the top 20% (not the bottom 80%).
- You automate and utilize technology to reduce the mundane and increase the culture, value, and experience of your staff.
- You monitor trends for the future valuation of your practice, which almost always will parallel the future appeal to new investors and clients.
- You run an “experience-based” business model that delivers an elite client experience. Not a discounted fee, or diminishing returns model.
- You affiliate with institutions that help you accomplish everything listed above.
Things are not the same… Thank God… Are you ready?
Everything can (and will) always get better and better with time, as long as you continue to nurture your business as if it is a loved family member. It’s a mindset. And the beautiful option is that you get to choose… Adapt and grow rather than decay and decline.
That’s the Skinny,
USA Financial Trending Report – Second Quarter 2018
On April 1, 2018 we celebrated 30 years in Business at USA Financial. I’m assuming most who are reading this have not spent their career in the financial industry, so rather than focus on the minutia and details of “our” story… I’d like to share a few crucial high-altitude observations I’ve gleaned over 30 years of evolutionary corporate leadership (albeit, my leadership experiences are derived from steering a financial services holding company and its collection of synergistic subsidiaries).
Looking back, our growth falls in to 4 stages:
Cornerstone 1 – Walking Flatlands and Climbing Mountains
Cornerstone 2 – The Corporate Security Fallacy (aka Avoiding Valleys)
Cornerstone 3 – Give ‘Em What They Want, Followed by What They Need
Cornerstone 4 – Moonshots are Crucial
I wrote about each of these Cornerstones and my biggest breakthroughs and learning experiences in the latest USA Financial Trending Report. I invite you to take a look and hope you find the cornerstones valuable and entertaining. Next time I’ll get back on task with my financial writings.
That’s the “30-Year” Skinny,
Are you an Entrepreneur (or are you Self-Employed)?
Target Readers:
- Those trying to determine how they want their business to grow.
- Those who are not sure if they are an “income earner” or a “business builder.”
- Those who have hired staff and/or need to hire staff.
Talking Points:
- Most do not understand the difference between self-employed and entrepreneur.
- Do you want to build a great career? Or a sustainable business? Or both?
- Consider the lifestyle you desire before building your business model.
Here’s the Skinny,
Most of the world does not understand the difference between being self-employed and being an entrepreneur.
The vast majority of small businesses are comprised of self-employed individuals as opposed to entrepreneurs. Yet, in error, many self-employed folks will refer to themselves as being entrepreneurs when they are not.
What’s the difference? Well, let’s start with the definitions from dictionary.com:
Self-Employed [self-em-ploid]
Earning one’s living directly from one’s own profession or business, as a freelance writer or artist, rather than as an employee earning salary or commission from another.
Entrepreneur [ahn-truh-pruh-nur]
A person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.
As you can see, there is a distinct difference.
This month, USA Financial celebrates its 30th year anniversary and I’m blessed to have shared in the growth over all 30 years (except for the first 2-3 months anyway). When I reflect back over those three decades, hindsight 20/20, for the first 2 years of USA Financial’s existence, we ran solo and were undoubtedly self-employed. For the next 8 years we were a more sophisticated version of self-employed, as we had support staff, but we were not much different than a business manager who has gained success and respect enough to be assigned subordinate staff and/or personal assistants by their employer/boss.
It wasn’t until ten years into the life cycle of USA Financial that I can confidently reflect back and realize we transitioned from being self-employed to being entrepreneurs. In fact, our turning point was a one-two punch beginning in 1998, when we…
- officially killed our business structure that emulated the financial services “external wholesaler” model and then;
- launched USA Financial Securities, our broker dealer.
Together, this combination of change required we reconstruct an entirely new business model (and strategy) that took two full years for us to completely re-tool, re-educate and re-deploy. By year 2000, USA Financial was unrecognizable from its former self.
That was our watershed moment in time. From 1998 to 2000 we transformed ourselves from being self-employed to being entrepreneurs… And we’ve been growing ever since.
Someone who is self-employed is simply their own boss, working “in” the business. Whereas an entrepreneur is building a sustainable business model that is not solely dependent upon them for the entity’s ongoing success – and therefore – they tend to spend more time working “on” the business (versus “in” the business).
In our case, the visual transition from self-employed to entrepreneur was dramatic. Notice the permanent and dramatic change in our revenue growth line in 2001 vs. previous years. Prior to 2001, we had minimal incremental increases as we worked hard and performed better at our jobs. But in 2001, we started running an entrepreneurial organization. And for us, that was the ticket.
Please understand, that being self-employed is a perfect choice and solution for many business owners. Not everyone desires to grow an organization and take on the entrepreneurial status. The key is knowing which you desire to be, considering exactly how you desire to intertwine your work life and personal lifestyle so that they successfully co-exist, then structuring your business model and staff accordingly.
That’s the Skinny,