It's My Opinion
Best Business Practises for DRS
By: Peter Figura
For almost five years now I have had the opportunity to work with many advisors in the Exempt Market space. From seasoned professionals to those just starting to work in the private equities market. From advisors with previous experience in either IIROC or MFDA firms to those for whom EMD’s world was the only part of the securities industry they have ever known. From advisors that treated private equity as an important addition to their insurance or mutual fund business; to those whose exempt market practice was a full time career.
And I would often ask myself what makes some advisors more successful than others. What are the traits of the best advisors in the business? What distinguishes them from their peers? And finally, what makes them not only survive but thrive in these difficult markets?
A Clear Vision
Although this seems to be an obvious one, it is also the one that is very often either ignored or underestimated by those advisors who are less successful in business. They often use vague statements such as: “I know why I am doing what I am doing” or they say, “I am here for the long run.” Only the advisors that really dominate the business know exactly where they want to be in three, five or ten years, how they going to accomplish it, and what kind of commitment is necessary from themselves and their teams to get there.
Successful advisors are constantly involved in their businesses (not simply with the client accounts) making changes and adjustments, predicting future market trends, allowing them to succeed in the long run. Their vision is clearly defined at any point in business activities, and necessary changes are the result of their ability to assess situations quickly and respond accordingly.
I will never forget when I was starting out in the financial services business. The manager of my rookie class at one of the IIROC firms repeated this line every single day during our training program: “Be a student of the business you are in, educate yourself constantly.” And by education he did not mean just taking courses or attending presentations, he truly believed that to be on top of your game you not only have to know the product, understand its features, and how potentially it is going to benefit your client. You also need to truly understand the markets, know what is happening in the industry, the economy, and in the world. “Clients are paying you for having an opinion and not for just putting some mutual fund or some other financial product in their account,” my mentor would add.
Do not be afraid to have an opinion even if the future outcome does not match your predictions; being wrong only shows that your opinion was somewhat different. That is so much better than having no opinion at all.
The best advisors out there not only work in their business, they spend more and more time working on their business. They are constantly developing the skills to help them to become better advisors, better speakers, and better business writers. Simply to be better at what they are doing is what motivates them.
They also understand that in the complexity of the financial world that a team approach might be the best solution for the business and also for their clients. However, building the team does not mean just bringing in more advisors, or alternatively, having an accountant or insurance agent as part of the staff. It goes back to the vision and the long term approach to business by bringing people into the team that will make the process of accomplishing the clearly defined vision much more successful, and more resistant to the market conditions and sudden swings. The team, if run properly, will complement each other in the approach to excellence and leverage each other’s experiences and expertise, making the business resistant to the competition.
This also brings in the notion of coaching and mentoring. I was not really surprised to learn that some of the most successful advisors are hiring professional business coaches, or seek out mentors, to help them to run their practices. Professional coaches and mentors help advisors become better business people. They identify the strengths, and some of the weaknesses, and then leverage the strengths to make the weaknesses less of a burden to the growth of a business. A good business coach will help to identify unique characteristics of the business practice and find the solutions to create an environment in which the business will excel.
Persistence & Constant Improvement
A clear vision, passion, and involvement are key elements to success. But in my experience, persistence and a goal of constant improvement really differentiates successful advisors from average performers. In a very famous Nike commercial, legendary Michael Jordan says: “I missed 9,000 shots in my career, I’ve lost almost 300 games, 26 times I’ve been trusted with game winning shot and I missed. I failed over and over and over and over again in my life and this is why I succeeded.” This applies not only to sports but definitely to business; the investment business in particular.
The best advisors know that in order to succeed you have to persistently try. Also, they know that not each and every initiative they try to build their business is going to be a successful one. Some of them will prove to be a complete failure, some will bring a mediocre result, and some will meet the advisor expectations. But these advisors continue trying to see what works, where improvements can be made, and what causes the failure and then they will inevitably try again.
For Example, one of my colleagues told me of how, many years ago, he organized a seminar. It was January and a major snow storm came. The attendance at the seminar was down to only four participants. Even worse, the guest speaker was stuck somewhere on the highway because of the weather. The advisor was considering simply cancelling the seminar. But he didn’t. Instead, he got his guest speaker on the phone, changed the slides himself, and delivered the seminar for the four attendees as planned. At the end of the evening he was not really sure if it all worked out and more importantly whether it made sense. The following morning he found out that one of the attendees phoned the office to book an appointment to open a significantly large investment account.
All because the advisor did not give up.