5 Point Plan – Developing A Book Of Business Everyone Will Want

The life of a financial advisor has a certain trajectory. As a ‘rookie’ you will generally take anyone and everyone, no matter the product and services they require. Assets and household counts matter. As your business matures most advisors pivot to a pure assets under management strategy. Gather as much AUM as you can.

But what if you’ve successfully navigated those initial stages and are looking to the second half, or twilight, of your career. How can the makeup of your book serve to maximize your value as a financial advisor?

We think there are five key points that will maximize value in the best possible way, here they are:

  1. Maximize total assets under management. A book of business that crosses the likes of $100M all the way up to $500M are immensely valuable. Beyond the $500M number you usually find yourself associated with institutional level assets that may serve to draw down your pure value ratios.
  1. Do more than annuitizing those assets. Turning commission into annual/quarterly fees has been around for more than a decade. That is the easy answer. Is that annuitization diversified across several asset classes, and more importantly, across two generations? Having annuitized relationships with those that will be holding the assets in the next generation makes your book incredibly valuable.
  1. Have a squeaky clean compliance and enforcement record. We’ve covered this point in other articles, but you should keep outside counsel on your personal payroll. Any settlement, slip up or otherwise will hammer away at the value of your book. Not only should you do the right thing in terms of compliance, but you should have a plan to protect your reputation at all costs.
  1. Be as visible as possible within the industry. Marketing yourself as an expert in a niche area of wealth management will serve to increase your books value long-term. Whether it is a podcast, internal presentations at company events, recognition clubs, local speaking engagements, radio, etc – do it and do it well. That visibility will increase the value of your book.
  1. Build a team focused on building relationships. The team you build to service clients should be as diverse as possible. Age, gender, race – each of these boxes should be checked to service the largest percentage of the population in the HNW and UHNW pools. The value of your book will only benefit from a diverse and effective team; a team focused on building relationships across all manner of demographic lines. 

All of the above takes time and commitment. Not only are you building a business focused on people and one of the (if not THE) most important issue in their lives, but you are navigating the legal and regulatory landscape as well. 

Gathering assets and building a book is hard enough. Doing it while building a ‘brand’ is just as difficult. But if you can pull it off you will be the ‘belle of the ball’ when it comes to valuation. 

Do you monetize via recruitment to a rival firm, or sell your book on the open market in the RIA space?  That’s a question for another day.

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