$1 million Annual Revenue Roadmap

The 5 Secrets to Creating a $1 million Wealth business

The Chairman’s Council | Master Advisor Series

Whether you are starting out as a new advisor or have been doing this for a while, chances are you’ve got your eyes set on getting your annual revenues up to $1 million and greater. The good news is that this is definitely achievable, not at all easy, but it can be attained.  But you must know that the most successful financial advisors around you often take a different route to make their million dollar payouts, they tend to be good business managers and great dealmakers. Further, in most instances, the largest practices are built in one of two ways:

• old fashioned unstoppable marketing or

• tactfully consolidating many books of businesses over time. 

A survey of the top advisors would likely result in these five factors as the key to creating a massive business:

1. Ruthless Marketing

2. Don’t be Scared by the Numbers, it’s Hard Work

3. Build a Niche Business

4. Differentiate Differentiate Differentiate

5. Leverage Your Network

1. Ruthless Marketing

Great marketing efforts can lead to massive success in Wealth Management. Marketing can be any number of different activities, cold calling, seminars, social media, advertising, public speaking, media appearance, radio, tv, newspaper, blogging, YouTube videos, podcasts.  This might just be the single most important factor in creating a massive practice.  If you are starting out new, 95% of your efforts should be focused on marketing. Set a minimum target of 100 prospecting outreaches for yourself everyday. This could be in the form of telephone calls, emails, LinkedIn messages, twitter interactions with prospects etc. To really power up your prospecting, you must create a solid list of good investor candidates, that is targeted and consisting of individuals who are qualified and fit your defined client profile. If they don’t fit your client profile, don’t waste a moment going after them, it will be a waste of time. Your prospecting list should be at least 1000 contacts. Why so many, well that’s simple, each day when you reach out to 100 prospects, you will be eliminating many from the list, and that’s good, because in the end you are targeting about 150 client families to get to your goal of $1 million in annual revenue.

Yes all you need is 150 client families that fit your defined client profile.

Depending on what marketing endeavors you choose, your results will be different, cold calling will get you some success, perhaps for every 100 calls you may speak with 10 -15 people and book 1 follow-up. Networking will yield better results, but you must understand that marketing must be a combination of daily activities, with the primary object of making 100 contacts everyday. So figure what works best to get to your target group in the most effective and efficient manner.

2. Don’t be scared by the numbers, it’s hard work

The wealth management business is not easy, for this reason it requires huge upfront effort and thick skin because you will get rejected day in, day out, every single day you market, you will receive major rejection. To win, you simply must find a way to stay motivated, because success is cumulative, eventually the payouts are meaningful, they really add up and it could be substantially more than many other professions.  If you want to make it work, you need to understand your reasons for building, without personal motivation, you’ll not get very far. So here’s the fact, in order for you to get to $1 million annual revenue, you need to understand the numbers that make it work.  The business has become very simplified, most advisors are creating fee only businesses, and the reliance on stock commissions, new issues revenue, upfront mutual fund fees is becoming less of a factor. So if you are building a fee only business, you first need to set your fees, based of the real value you provide, it’s no longer enough to offer a financial plan and asset allocation to justify charging a fee. 

The average advisor charge fees between 1% and 1.50% depending on their service offering.  Next, it is crucial to set a minimum asset level per household, the higher the minimum the less clients you will require to get to your revenue targets, but will you be able to execute! Be realistic, start with a minimum asset level of $250,000 per household, this should keep you safely above the firm’s minimums at the larger firms as well.  

Focus your efforts on acquiring 150 family households, if done right, this will get you to your revenue target with ease.  Ideally you should be marketing to professionals, business owners or niche targets with $1 million per family, however that is not always achievable at the onset. So here’s how the pros do it, the top advisors, seek to establish a good mix of family relationships, targeting a small handful with $2.5 million & $1 million, all while growing with clients that are more achievable within the $250k and $500k range. As a practice every quarter strive to onboard a $1 million family and 3-4 families with $250,000 or greater in assets, while also targeting at least two $2.5 million families each year. Now your objective is to continue to move this minimum level higher as you grow, so reset your targets at different levels you hit, at $20 million in AUM, move your minimum asset per family to $500,000.

3. Build a Niche Business

If you want to grow fast, one trick is to market to an affinity group, and try to go viral within small communities. Here the idea is that if you are successful a landing a few clients in an affinity group or community, you have a higher probability of securing others by referrals and recommendations. For example, let's say you targeted an engineering firm and successfully acquired three senior engineers as clients over a period of a year, in the next year, your efforts at getting others in the firm are substantially higher. The other serious advantage in the niche approach is that you can become a specialist at understanding the needs of a very specific group, which really sets you apart from other advisors. In general, niches are not easy to break into, so your best bet is to select a niche where you already have some relationships or have some existing deep knowledge or experience in. 

4. Differentiate Differentiate Differentiate

Show your prospects that you offer big value, clients are becoming more and more conscious about value and budget. This is one area where smart advisors can really shine, show that your offering is different by putting yourself in your client’s shoes and try to solve their everyday problems beyond managing their retirement funds.  Find ways to add value outside of your work as well, one advisor shared how he negotiated a group buy option with a snow removal and lawncare company in his neighborhood, shared the discounts with his clients, his older clients were super excited by finding a way to save on this service, the owner of the lawncare company was grateful for the referrals and eventually moved his accounts over and made a handful of other referrals to the advisor, win win for everyone. This was a simply factor, but seriously impactful, because everyone likes getting a good deal on everyday expenses.  So the point here is that you have to be human, think of the different way to simplify the lives of your clients and then they will become advocates and tell their friends about you.  Differentiation is a big way to build moats around your clients with superior service and access to your network, there’s something exciting about being part of a club, create this with your clients and they will reward you.

5. Leverage Your Network

Hey let's face it, even your college roommate need a good financial advisor, ok maybe you don’t want them as a client but they definitely have relationships with people. The thing about having a network is the power to name drop or get introduced. LinkedIn is one of the best tools for figuring out who’s related to your network. Powerful stuff, many advisor are yet to leverage this tool, the ones that do are raving fans.  Another way to leverage your network, is to get involved in something, whether it is sports, or volunteering, every advisor needs a huge network, so set a goal to add 15 new people to your network of professionals and then leverage their relationships to get some clients. 

Partner with your colleagues, learn from the best and support each other in generating marketing ideas, there may be others in your firm having big success, network them and try to learn new techniques constantly. 

The Road Map

With steadfast commitment to a plan, and using these techniques, we envision an advisor’s roadmap to $1 million in annual revenues similar to this chart:

While this framework targets a 6 year time horizon, our Council Strategy Playbook Series provides a clear more aggressive path to achievable similar results in a much shorter timeline by focusing on strategies gears towards M&A strategies i.e. Monetization and Acquisitions.

Let’s now look at the Revenue numbers at the end of year 6. Assuming you’ve achieves AUM of approximately $96 million, your gross revenues and client breakdown should be similar to this: