Pathways to Growth
60 MIN WEBINAR
1 hr.: CE credit
Pathways to Growth: 3 success factors of the highest-growth firms
Moderated by Will McKenna, featuring Mike Van Wyk, Leslie Geller and Paul Cieslik
Will McKenna: Welcome to the PracticeLab webinar series. I'm your host, Will McKenna. I want to thank everybody for joining us. Great to have you on thecall. Our topic today is Capital Group's new advisor benchmarking study called Pathways to Growth. And this is a truly comprehensive national study of 1,508 advisors, just like many of you on the call today, and we're going to give you a clear view of what's working and what's maybe not working so well in practices just like yours. Now, this research shows that some practices are growing a lot faster than others, and we're going to dig into just what those advisors are doing to achieve that kind of growth. So to help us break it all down, we’ve got three great speakers today: Mike Van Wyk, Leslie Geller and Paul Cieslik.
Now before I introduce these guys, let me cover a couple of housekeeping details. On this call, you can earn while you learn. We've got CE credit available for both CFP and SEMA designations. And to get that credit, you need to stay on the call for at least 50 minutes to the end of the event. And then you'll need to complete a short quiz, and you can find that quiz in your additional resources tab. You'll also find the slides from today's event. I'd go ahead and open those up now, so you have them and some other really good resources in there. Also, you're going to find the Q and A screen there. We love your questions throughout the event, your comments. Keep them coming; we'll try to answer as many as we can. And you can use that same Q and A window if you do have any technical problems; we'll take care of it right away.
So now let me introduce today's speakers. Mike Van Wyk heads up Capital Group's customer research and insights team. Mike has 23 years of industry experience. He's been with Capital Group for five years. Prior to joining Capital, Mike was with Procter & Gamble, where he was a director of global strategy development and advanced research methods. And now he's bringing those techniques to help us at Capital Group study the wild world of financial advisors. Leslie Geller is a wealth strategist at Capital Group in our high net worth business. Leslie has 14 years of industry experience, has been with Capital Group for the past two years. Prior to joining us, Leslie was a tax and estate lawyer and a partner at a prominent Los Angeles law firm, where she advised high net worth clients on all matters related to taxation, wealth transfer and family governance.
Paul Cieslik is a senior vice president with Capital's advisor practice management team. Paul's a business coach who works with thousands of advisors every year to help them build and strengthen their business. And as a former financial advisor himself, Paul really understands what you all need to do to take your practice to the next level. Paul has been with Capital Group for the past 17 years. So Mike, Leslie and Paul, welcome to the program; great to have you guys with us.
Paul Cieslik: Thanks, Will.
Will McKenna: So with that, I want to just jump right in. And Mike, let's start with you. The research shows us, really, that advisors' growth comes down to how they spend their time. So that's not a shocking surprise. But what did we learn about how those faster growing advisors are using their time?
Mike Van Wyk: Will, this slide on time, this is a great place to start, because an overarching theme from our study is that it's incredibly important for advisors to be intentional about how they spend their time. What we see is advisors spend an average of about 50% of their time on client relationship management, about a third of their time on investment management and about 20% of their time of practice management. And one of the findings that we found just striking within the study is shifting just 1% of time from lower, such as over-preparing for client meetings, to activities — like prospecting, like digital marketing, like team management — can lift practice growth by 3%. So to put that into really tangible terms, 1% of time, that's about 30 minutes per week. So shifting how advisors spend 30 minutes of time can yield 3% overall growth for their practice.
Will McKenna: OK, that's great. And, you know, I mentioned in the intro, Mike, that this was a really national study of 1,508 advisors. What else should we know about the methodology and the advisors that we surveyed?
Mike Van Wyk: Yeah, so we set out to create a very comprehensive and practical study. It's comprehensive. As you said, we surveyed over 1,500 advisors as part of this work, and we worked with a company called Escalent, they're a behavior and analytics firms, as we collected these data. And within those 1,500, we have a range of different ages, different assets, different channels, different experience within the industry. We can also dive deep and profile advisors based on [those who] have a high net worth book of assets, and those who have heavy retirement plan assets. And so [we] can profile what the average advisor does, dive deep into specific profiles. And for an advisor who's interested in seeing how they compare to the average, whether it be based on age, on assets, around industry experience, we can speak to how those individual advisors compare.
But we didn't want it to just be comprehensive. We're not here to just collect data; we wanted it to be very practical. And so we focused on what we think is most important for advisors, which is how they can drive growth. And we looked at growth three ways: We looked growth in revenue, we looked at growth in new clients, and we looked at growth in assets. So we combined this very comprehensive approach to collecting the data with a very practical focus, which is on driving growth.
Will McKenna: I love that idea of a really practical focus, and you said growth is kind of a multidimensional thing, and that's really going to drive the rest of our conversation today in terms of how we talk about how advisors are growing. And what you see on the screen now is a key finding from this research. What we found is that there are three of these key success factors, or three, really, pathways to growth, which are: always-on acquisition, which we're calling an intentional, strategic focus on getting new clients; relationship alpha, I love that term, you're going to have to tell us more about that, Mike, which basically means providing a broader set of services beyond just investment management to create stronger relationships with your clients; and then third is strategic scale, and this is this idea of running your practice like a business. Sounds simple, I'm sure there's more to it. So Mike, you know, what can you tell us about these three success factors?
Mike Van Wyk: Yeah, so these three success factors, they should all feel somewhat familiar to advisors. This isn't a call for reinvention. We're not taking these study results and saying that you should approach your practice in a way that's completely different than some of the things that you're doing today. So it's not a call for reinvention. What it is is a reminder to do, to refocus and refine the tactics that you may be using today, and make sure that you're shifting against those lower value activities to higher value activities. So these three success factors, we found them to be the catalyst for growth.
Always-on acquisition, Will, as you said, that's about bringing in new clients. If you're not growing your client base, it's unlikely that you are one of the practices that's emerging as one of the higher growth practices. So ways that you can bring in new clients: prospecting, bringing in that lifeblood of the practice, that's success factor number one. Relationship alpha, that's a nice term, we like that term. In simple expression, what that means is broadening and deepening your relationship with the clients that you have, offering more services, doing those things that create more value for them, that bring more assets from their book and brings a higher probability of loyalty and referrals into your practice. Strategic scale, that's really where you can create efficiencies that free up your time to be focused on those things that grow your practice through always-on acquisition and relationship alpha. Standard operating procedures are great way to do this. It's also using technology as your friend to be efficient in your use of time and, again, refocus those minutes that you're gaining into things that are going to grow your practice at a faster rate.
Will McKenna: Thank you for that, Mike, a great overview. Let's go ahead and jump into each of these three factors, and that's what we're going to do for the next chunk of time. And let's take a look here at this first factor: always-on acquisition. You know, Mike, I think what you see on the screen is it's not a big surprise that new clients come from referrals. And, of course, referrals are great, but, you know, when I look at this chart, it makes me wonder if there's almost too much reliance on referrals. Certainly, as a marketing guy, I'm a little disappointed at the low numbers from marketing, but, you know, Mike, give us some insight here. How can advisors be more strategic about getting new clients?
Mike Van Wyk: Yeah, so ... and the first point we should make is referrals are a good thing. Using your relationship with existing clients to get more referrals, that's something that we certainly encourage you to do. But there's other things that you should be doing. And so, this isn't a replace referrals recommendation, this is an “and.” And what we see is the highest growth practices, they're definitely using referrals, but they're also using different marketing techniques to get more prospects to come into their firm. It's pretty logical. Referrals, you're relying on yourself through the client reaching out to new clients and bringing them in.
When you use marketing and the full capabilities of marketing to reach out to a broader audience, you're able to touch more people with your message, and therefore bring in from a larger population the potential for growth. So what we recommend to you is: Continue doing what you're doing with referrals. Ask for those referrals from your clients, ask for those referrals from the businesses with whom you have relationships, but broaden out your impact and use some of the marketing capabilities that are available to you to reach a broader pool of potential prospects.
That is exactly what the highest growth practices are doing. We see them doing it; it's proven to have success; we suggest you start to think of this and referrals and digital marketing in order to broaden out the pool of prospects for your business.
Will McKenna: That's great. Mike, take that a step further. Any specifics around what are the techniques that folks are doing? I know we're going to get a little more into this later, but give a few highlights there.
Mike Van Wyk: Yeah, so think of it as a three-step process, and certainly we can help you think through the way to bring this to bear. But the first is, make sure that your overall value proposition is something that you have expressed and that you're able to take into an environment where you're expressing it digitally for the prospects that you're reaching out to. And then, as you're reaching out to them, using multiple channels, and you see that expressed here within the data, high-growth practices are reaching out through the multiple different channels in order to get to the prospects that are going to be receptive to their messages. So develop the marketing capabilities, reach out with your message in a clear, tangible way, and, again, you'll start to see the dividends from that.
One of the questions that we've gotten as we've talked about this is whether or not smaller practices would be able to execute this. And what we encourage everybody is to realize regardless of this size of your practice, you are able to tap into these resources and use them. You don't have to have them in house, you certainly can contract out in order to get the capabilities in place to bring in prospects through these different marketing practices.
Will McKenna: OK, that's great. And, you know, I want to ask the audience actually here, maybe you can use the comment window to let us know what are some of the things you're doing to take a strategic approach to your client acquisition efforts. What are some of things you're finding that work? And we can bring that into the dialogue that we're having. You know, Paul, I want to bring you into the conversation. I know you spent a lot of time working with advisors on their marketing, their branding, their value proposition. And we'll tell our audience, you're going to hear me say this a lot, we've got [this] site called PracticeLab, and there's a link in your resources. Paul has some great articles on there that go into those topics, and I'll come back to that later. But basically, Paul, the study shows that the highest growth advisors are using marketing to a greater extent than their peers. You know, does that track with your experience? What's your perspective on this topic?
Paul Cieslik: Yeah, it totally does, Will. It really begins with the decision, right, to use marketing to your advantage. And you know better than anybody, that it's all about creating what we refer to as a motive resonance. It's building a connection when it comes to successful marketing. Our team can help you think through, to your point made earlier, and implement strategies to enhance your brand. The first takeaway here, as my teammate, Wassan Kasey, often reminds me, is the importance of a consistent, distinctive digital storefront to include your website, LinkedIn and your office environment. Are the pictures displayed, the personal connections being made, and the stories that you're sharing on your website pulling people towards you? Working in a virtual world, what do you want your client to see when having a Webex meeting? Is your lighting, your camera positioned correctly? Does your environment enhance your brand? It's critical that your messaging identifies and you can clearly articulate your key differentiators.Lastly, Will, consider who your ideal client is by focusing on their motivations, their goals. Think about the client's needs, wants, wishes — or, said differently, through their fears, passions and insecurities — as you align your messaging, your marketing, right? To ultimately who you're trying to pull in to your practice.
Will McKenna: That's great, I love this idea of a digital storefront. What a great phrase, and that's kind of the only storefront we have right now. To your point, Paul, in making sure your virtual world reflects the brand that you want to reflect. And there's a lot of great resources there on the PracticeLab site as we think about this idea of being intentional about your acquisition capability. And again, I'm going to refer back to the study and ask you guys, we're going to make sure you grab a copy of this, but let me just touch on some of these summary points. Setting acquisition goals: 57% of the highest growth practices have defined, measurable client acquisition goals. And that compares with only 43% for that broader advisor universe, so really being strategic about that in your practice.
Referral-driven segmentation, I thought this is interesting. The most successful firms include the potential for referrals in the way that they segment their client base. And we've got more detail on that in here. An optimized marketing mix, that's what Paul was talking about, what we found is that advisors are two and a half times more likely to say that they're expert in capturing and marketing their digital presence, and twice as likely to do marketing through direct email, digital channels, social channels, and so on. And then this idea of client onboarding: It sounds simple, but I think it's very valuable. What we found is that 62% of the high-growth group was really using these, and it helped them cement those relationships, and strengthen them as new clients were coming in the door.
So, more great stuff there. What I'd like to do now is pivot to our second success factor, and that's relationship alpha, and let's put that up on the screen. And the idea here, and I'm going to bring Leslie into the conversation shortly, but basically, the idea here is that some firms are offering a broader menu of services, beyond investment management and retirement planning. What we found is that, when you look at the top of that chart, services like investment management, retirement planning, those are really table stakes. Basically, everybody is offering those services. Whereas, when you look at those blue bars on the bottom, some of the services like estate planning, charitable giving, generational wealth planning, those are more value-added, and really differentiate those faster growing advisors.
So, Leslie, let's pull you into the discussion. I know this is absolutely your sweet spot. You work with a lot of advisors, help them build out their tax and estate planning skills. What's your perspective on these findings?
Leslie Geller: Great, thanks, Will. So we talked about earlier how relationship alpha is this idea of offering a broader array of services with the intent of building deeper engagement and loyalty. And like Will said, I spend my days talking to advisors all over the country, at all different firms, about a couple of these topic areas, where there's really a lot of potential for this deepening of engagement — so, estate planning, family education and wealth transitions. And what we find is that most advisors very readily recognize the opportunity here, because of the visibility these types of topics provide to additional assets and relationships, both with the client, their family, business partners.
But advisors are hesitant to pursue some of these conversations, because of the complexity of the topic. I did tax law for a very long time, and I recognize how hairy it can get, very, very quickly. And so it can be an intimidating topic to broach if you're not in it every day. What I try to convey to advisors is that the involvement here, right, this additional service doesn't have to be a service in the traditional sense, or the full-service sense. Like Mike emphasized in the beginning, this is all about those small shifts in your practice. The little things, the small additional conversation around tax and estate planning, around charitable giving, around family legacy, right?
Something as simple as checking on the status of a client's estate planning documents, right? Just bringing that up: Have they updated them recently? Have they updated their retirement plan beneficiary designations, now that we're in this brave new world of the Secure Act? And I liken it quite often to being, what would I call, the issue spotter — being the one to identify the issue that's relevant to the client, and pointing out the conversation that they should be having with their estate planning attorney or CPA. We're seeing a lot of this right now, with all the potential for policy changes, for new tax legislation. [I] can tell you from these conversations I've been having with advisors and investors all over the country: Estate planning attorneys, CPAs, they are not being proactive around some of these conversations, and there's a real opportunity here for advisors to fill in the gap, to be the one to identify this potential concern for a client. And it's going to be a new conversation for them.
We're going to talk about this a little later, but this is a great example of these little things that make a big difference around some of these complex topics. But we have this great article on the PracticeLab website, on how advisors can facilitate and support the family meeting process for families with generational wealth. And this idea is one of those ideas in the family transition topic that just seems like maybe something you don't want to get involved in, because it seems really complicated.
But what I try to tell advisors, and what this article tries to drive home, is that it's really just all about identifying the issue, pointing out the need, and then being the facilitator, right? These are the little things that lead to those larger conversations that expose other assets that you didn't know about before, that expose potential additional relationships and aspects of the client's life that are really going to deepen your engagement, both with them, and potentially their family members, business partners, friends. There's a lot of opportunity there that's not tapped quite yet.
Will McKenna Well, that's great, Leslie. And I was taking a ton of notes as you were talking. I like this idea of … Some of these topics, as you put it, they can seem hairy. And I don't know if that's a technical legal term, Leslie, or what that is, but it can be intimidating, and, and your point that, "Listen, you don't need to go out and offer this as a full-blown service." Clearly, you're not going to learn the state law overnight, but it's the small shifts, as you said, Leslie. Having those conversations, being that issue-spotter, really interesting point that estate attorneys are not being perhaps as proactive in this environment. Given all the changes that have been going on, what a great opportunity for the advisor to step in, be helpful to the client, and ultimately expose other assets and relationships.
Great message there. I'm going to come back to you in one second, Leslie, but I want to circle back, because we got some great comments from the audience about always-on acquisition and what you guys are doing. So let me just read a few of these out to the audience. Here's a good one: "We've created verticals within the firm that target specific niches, with language that relates to them more directly." So, a smart niche strategy. Here's another one: "We're working hard on consistent messaging across all platforms." So Paul, that's right up your alley. Thank you for that comment. Here's a great one: "We created an ideal client profile. It caused us to reduce our household count from 500 down to 40” … which is fantastic … “plus, I added a protege to take over another 50 households. We have a new screen to determine whether those new introductions fit that profile. If they don't fit, we will acquit.” (laughs) OK.
But that's a great focus on the ideal client strategy, and communicating to COIs what our ideal client looks like and what kind of referrals we're looking for. So, thank you all for some great stuff there, and I might ask you to do the same thing, when it comes to this topic that Leslie is focused on, around these additional services. What are you doing in those areas? What would you like to learn more about? And Leslie, let's come back to you, because I think we've got a slide here that talks about how else advisors might be able to drive this idea of relationship alpha. What can you tell us about that?
Leslie Geller: So I think the key point here is that relationship alpha is very client-specific. And Paul alluded to this earlier; some of the comments you just brought into the discussion really made reference to this. But it might be charitable giving for one client. It might be implementing a retirement plan for their business, for another client, but again, it all starts with these little conversations, to help uncover what the client's motivation is. I like to refer to it, when I'm talking to advisors, as the client's hook or their hang-up: hook, meaning what gets them to move in a positive way; hang-up being what is preventing them from moving, either because of fear or dislike or paralysis.
And if you can figure out what that client's hook or hang-up is, you can then determine where the most potential is, from a relationship alpha perspective, right? I'll give you an example: if a client adores her grandchildren. If they are her life, and her goal is to provide for them in every way possible, from paying for their education, family vacations, anything they could possibly want. But she's also very mindful of them being productive members of society, and going out and having fulfilling careers, and transitioning money in a healthy way. For that client, that hook, her motivation is going to be that healthy family legacy, right? Both from a monetary perspective, a value perspective, there's a lot of potential support you can provide there.
An example on the hang-up side, is the client paralyzed? They can't do much, because they're just so nervous about giving up control of their family business — that business they built from scratch. So they won't talk about wealth transitions. They won't talk about this idea of moving money down generations. For that particular client, it's going to be about business transition planning, helping them through that process. That's a particular relationship alpha that you can see being very effective for that particular client profile. I think it's really all about being flexible and being responsive to the client's needs. It's, it's not one-size-fits-all, but it doesn't have to be a big thing.
Will McKenna: Yeah, that's a really fun framework too, Leslie, this idea of what's the hook or the hang-up, and using that conversation to try to understand what those kind of points of entry are with each client and whether they're focused on business transitions or, kind of, their family legacy, and just being flexible and responsive. Great advice. I'm going to read one more quick input from the audience, and then I think we're going to transition to a quick poll for the audience. So here's what one of you wrote in about your service offering: "We created a 127-point clients' standard of care checklist." Wow! "These are services we've provided to clients over a 30-year span of time. We don't show the clients or prospects the actual checklist,” so it's more of an internal thing, "but we tell them we follow that checklist, so that no stone is unturned in their world."
That's amazing. That's great. Thank you for that input. What we're going to do is ask you in the audience to complete this quick poll: "Which client service are you most likely to add to increase in your practice this year?" And I can see you're already answering it. … It looks like estate planning, and it's about 33% of you said that was number one, generational wealth transfer at about 39%, so that was the number-one idea. Charitable planning was down at about 16%. So generational wealth transfer at number one, estate planning number two, charitable planning number three — really interesting input. Does that ... Leslie, I see you nodding, does that make sense to you, that order?
Leslie Geller: It does. I think that makes sense, based on the conversations I've been having with advisors. I do think it's interesting how charitable planning kind of falls to the bottom there, and I think because it's one of those topics that, you know, I spoke to about ... I spoke about being responsive and flexible. Charitable planning can be a fantastic hook for a certain client, or a particular family, but it can be can be completely useless with another family that's not interested in charitable giving. So it's often touted as this kind of one-size-fits-all solution for bringing in younger generations into the wealth transfer conversation for advocating for a healthy transition of wealth down generations, but it doesn't always work. And so I think that number probably reflects that idea.
Will McKenna: Right. So it's this whole idea of, you have to fit the client's philosophy, probably almost wherever they are in the high net worth spectrum. It's really more about their mindset about this. Let's shift now to talk about our third factor, which is strategic scale. And again, the idea here is running your business like a business. Sounds simple, but I think probably, Mike, there's more to it than that. Talk to us about, Mike, let me bring you back into the conversation now. What are the faster growing advisors doing to increase their productivity and run their business in this way?
Mike Van Wyk: Yeah. Will, what jumped off the screen when we are looking at the data was the fact that higher growth practices, they were really focused on creating efficiency on those repetitive tasks that they could either use technology in order to make it more efficient, or they could have a standard operating practice that could be used across all the advisors as part of that practice to make it more efficient for them, and again, free up time that they can use for those higher growth activities. So whether it be client onboarding, whether it be the way that they do team management and making sure that they are growing their team, their team's capabilities, or the investment in technology. And you see here are the examples of higher growth practices, they're about 10% more likely to use technology such as portfolio management software, CRM. So they're using technology as their friend in order to create efficiency.
They're also much more likely to use model portfolios, which is something that we would encourage. About two-thirds of high-growth practices are using model portfolios. So standard operating procedures, very common among those high-growth practices, using technology as your friend, taking those things that are repetitive, that are not necessarily adding to the growth of your practice, and standardizing those processes, using model portfolios in order to create, again, more time and more consistency in terms of results. Those are some of the things that we saw the higher growth practices doing. As they do those things, time is freed up. That time can be freed up to prospect. That time can be freed up to do all those activities which we see driving in new clients and creating deeper relationships with existing clients.
Will McKenna: That's great. And I love this idea of looking for ways to be efficient and incorporate standard business routines, standard operating procedures. This idea of: Make technology your friend. I think there's also a fair amount when, when those of you in the audience dig into this report after this call, we also talked about a fair amount of areas that you could be tracking in your business and how tracking is such an important part of this to understand, you know, the vital signs of your business. Where do you stand? What are you tracking? Obviously it's a well-known saying, you know, we manage what we measure, and this is an important part of that, whether that's revenue growth, growth in your client acquisition, measuring your productivity and your efficiency, your return on your marketing investment, your return on your technology investment. So the study goes into depth in each of those areas.
And Paul, I want to bring you into this topic again, because this is right in your sweet spot as well. I know you work with advisors on productivity and efficiency and what they can be doing. Tell us about your experience and why does allocating more time to, you know, business management, practice management lead to potentially higher growth?
Paul Cieslik: Yeah, thanks, Will, and I'll piggyback a little bit on where Mike left off specific with time. But before I do, whoever has that 127 checklist, you might want to share that with me, because it's always great to borrow and not recreate. So you've definitely piqued my interest out in the audience. Mike mentioned time and you've mentioned time, Will, and I think let's go back to that phrase that we heard earlier in today's conversation, that 1% equals a 3% shift. So, in other words, deciding, right? To make a 1% investment in how you run the team and where you allocate your time has a net result of nearly a 3% increase in AUM. So if you just hold onto that number and you just hold onto that theory, the highest growth group that we've identified in the research has allocated 81% more time to team management.
So if I just multiply that out, that's a two and a half time net result in AUM. And where does, hint, it's all about a conscious decision to do something that's not as comfortable for most of us. And I know having sat in your seat, and it's been a long time that you do what you do, when you're done doing that, you're asked to do even more, and, you know, I can produce, but how do I run the team? And that's what we're really talking about is how do you step back and invest in yourself and take a breath, hit pause, and think about the decisions that you're making for the team and for the business in addition to obviously portfolio construction management and client engagement? And having consulted with dozens of high-performing teams and thousands of advisors, our team knows, back to Mike, that outsourcing portfolio construction and utilizing models is the single activity that they have chosen to make, to free up, time to align what we call that value prop to the market.
The client expects something different than what we were delivering 10 and 20 years ago, right? It's not to say that we, you know, are not important. That's not the case, but it's actually aligning to the expectation. And second, Mike uses a phrase, standard operating procedures, that is not a habit, and there's a clear and distinct difference from having something work well over time than being able to pull out a document that's in writing, which is actually the definition of a standard operating procedure. Will, process is the key, and outsourcing seems to be a trend that's not reversing. So I would leave you on those two thoughts.
Will McKenna: Oh, that's great. Thank you, Paul. And I'm just chuckling a little bit, because we're having a little bit of a dialogue in the comments here with your ask for the checklist. I'll share that with Paul. What's his email, please? So we'll connect you two (laughs) after the call. And in fact, a couple of other advisors saying, I'd love to see the 120-point checklist, too. So, you may be onto something there, and I won't reveal your name to protect you from a barrage of requests. Also seeing a fair amount of comments coming in around estate planning, how important that is, and people want to work on that part of the business. So, Leslie, we're going to touch on that a little later in our commentary as well.
Let me come back to you in the audience, because, let's put up on the screen, there's kind of a five-point summary of what we've covered so far, which I think is helpful. And again, I will hold up this report, and I'm kind of old school, I like to print these things out and of course you can print it out after you get off this call. But there's a lot of great detail in here, statistics around these five steps. While I'm touching on these, let me ask you in the audience, please come back into the comment box. Let us know what you're looking at trying to improve in your business over the next 12 to 18 months. What are you most focused on? You know, where are some of your limitations that you want to shore up? What are you trying to get better at in your business? And, and I'll, I'll go through this now, but send us some of those thoughts.
So look, these five things help to summarize what we've talked about so far, and I might touch on a couple of these in a little more detail. So establish goals for client acquisition and prospecting, and that's what really we were talking about before. As Mike said, be intentional about it, be purposeful. And, and as Paul touched on this, advisors with expertise in marketing disciplines like branding, prospecting, really crafting their value proposition and their environment, as he said, tend to do better. And we've got some resources that I'll get to in a minute, and Paul will get to in a minute, that I think can be really helpful to you after this call.
Expand your service offering — that was all about those value-add services, whether that's generational wealth conversations, whether that's estate planning. And, as Leslie pointed out, you don't have to be the expert. It's really about taking small steps, getting in there and having the conversation and helping lead your client to solutions. And we've clearly found that those who offer that have faster and higher growth. Standardize as many practices as you can related to the service. Again, this goes back to where we started today: Time is your most valuable asset. If you can standardize those things so that you can spend more of your time on the higher value activities, that's really important.
Again, you might be surprised to hear Capital saying, spend less time thinking about the investment piece, less time monitoring the market, and try to build that scale and efficiency through model portfolios. We found that the most successful advisors were using model portfolios at a 13% higher rate. And again, it brings scale and efficiency to their practice so that they can focus on things like client acquisition and other services. And then spend more time optimizing your team. And, I think Paul mentioned this, high-growth advisors spend 81% more time on team management and 21% less time on just, kind of, the mechanics of client book management.
So a lot more detail in the study. Let me look at my comment box here and see what's coming through. And thank you all in the audience for being so engaged, really making this fun. And we'll look through here. I'm seeing a few comments like, oh, “Does Capital Group have a standard operating procedure template?” Good idea. And in fact, you'll see later, we'll talk about some articles on PracticeLab that have checklists, that have workbooks you might find very helpful. Here's an idea, team efficiency is coming through streamlining operations, shrinking to grow — interesting phrase — adding additional revenue streams aside from AUM fees on managed portfolios, prospecting in the right pool. So being more targeted about that.
Um, trying to get better at website management, blogging, group emails, marketing. There you go, Paul, somebody you can connect with. And so on. A lot of great, great comments here. Thank you … developing a more specific ideal client. So this gives us a lot of great fodder to reach out to you folks after this call. Thank you for that. What I'd like to do now is actually switch gears, because more than one of the comments come through [to] say, “What resources does Capital Group have to help us in some of the areas that we're bringing up today?” And I'd love to throw that on the screen and talk about a couple of these in particular.
The first thing you see here is essentially a picture of PracticeLab. Now this is relatively new, so you may not have had a chance to go there yet, but PracticeLab is essentially our digital destination for advisors about advisers, chock-full [of] resources for you. Really, I'm going to encourage you to go there and see what you can find. … One of the really featured parts of PracticeLab is a program called Elite Engagement that Paul, Chris Gies, Wassan and all that team created that includes not only great content, but also some of their coaching services. Paul, let me bring you back. Talk to us about Elite Engagement. What can you tell us about that program?
Paul Cieslik: Yeah, I appreciate that Will, and thanks for the time and representing the advisor practice management team. As you mentioned, we also offer and what we refer to as an infield, which lately (for obvious reasons) is a digital experience offering to the marketplace: seven modules that are called the Elite Engagement Series, focused on practice management. It's actually a guided learning program, which includes prework and, most importantly, post-implementation guides. Where the rubber meets the road for any advisor on this call is the how, and it's typically delivered to groups of advisors in a workshop format connecting them to their wealth management consultant at Capital Group as their accountability partner, holding their feet to the fire, right?
Again, where the difference is made is actually implementing an idea. We share strategies that help advisors differentiate their brand, identify their ideal client — which we just heard about — align to client expectations, price their value accordingly, and even build a COI referral network with a client-centric approach. The curriculum is delivered from our team led by Chris Gies, who you've mentioned, which I'm a part of, and by Wassan Kasey, another advisor practice management consultant. All modules focus on increasing wallet share, acquiring new clients, and building efficiencies within your business. If a more hands-on approach tailored to your practice is of interest, please don't ever hesitate to reach out to your wealth management consultant at Capital Group. Back to you, Will.
Will McKenna: Yeah, and we're going to touch on one of these articles you see on the screen right now, but first I want to pick up on something you said there, Paul, which is this idea of guided learning. And it's funny when we, before we launched PracticeLab, we had reached out and done some, had a bunch of conversations with advisors like you all on this call and said, you know, tell us about practice management, what you're looking for from folks on Capital Group? And, and a couple of the things we heard back from you, and this phrase has really stuck with me is that, you know, most of the practice management that's out there is a parade of good and entertaining ideas, but very little follow-through. And I think what we've tried to do and tried to pride ourselves on is this idea of really having follow-through information that goes into what you can do to improve — the how-to, the checklist, the programs. And I think that's what you mean by guided learning, Paul, but say a little bit more about that philosophy behind what you're doing.
Paul Cieslik: Yeah. It's interesting. We tend to have some pushback, and it's early, but it goes right away when we suggest that advisors, even the best out there, including you all, always want to get better. They're willing to be challenged. We are challenging them with what I refer to as that pre-work to engage them to level set before we deep dive on a topic, which we do on a Webex. And then again, what really matters is to take those one or two ideas from a whole host of many and find a partner to hold their feet to the fire, which again, most advisors are comfortable with, whether it be, again, a peer you know, someone in leadership or maybe even somebody here at Capital Group, their wealth management consultant, is to say let's put the idea into practice.
And when you kind of think about that guided learning program and that curriculum, it's not a one and done. To your point, it's not a, hey, here's another great idea and go figure it out. When we really think about working the hole backwards, in a sense, from golf, we are focused on the how, and then developing the messaging to get there. It's really the end game here is how can an advisor implement an idea that would make, again, that 1% of that incremental change, back to Mike's comments, to allow them the space, the time and the capacity to invest in their business? And I think we've gotten it right. It's taken us a few years, but I think we've gotten there.
Will McKenna: That's awesome. We put on the screen one of the articles that Paul wrote on the site, it's called “Five ways to improve productivity in your business.” This is just an example. Paul, a couple of the highlights here, and obviously we're going to send you to all to look at PracticeLab to dig into this, but give us a couple of highlights.
Paul Cieslik: Yeah, very quickly. I mean, Will mentioned, you know, checking your vital signs. We introduced the concept here, the KPIs or key performance indicators, are really important. In other words, not just your top-line growth — I did more revenue this year versus last — there are other metrics which we would suggest strongly would help you analyze and assess the health of your practice. Number two, track time. I mean, if the best out there (including you) are shifting away, and the value prop and the expectation has changed, where are you, literally? Not guessing, but where are you literally spending your time? It's not an unlimited commodity, so we want to really introduce you to the concept of managing time. Think about assessing your capacity with regards to who you serve, how you serve and when you serve them. Delegate, assign formally roles, formally. Who owns what piece of the business?
And I think when you see that and/or you get your team involved, which we do have a checklist and an intake form, is actually asking the people amongst your team, what they're doing, what they like to do, and what they don't so much like to do. And that really brings the team together to have, to align the delegation with the tasks and responsibilities to ultimately what you're all trying to achieve. And then lastly, one of the things that's most overlooked that we've had a lot of luck with, Will, is what we call our crucial client conversation. It's an example of building efficiencies, it's literally a proven four-step format to allow advisors to compress their client conversations and actually have the same effectiveness, but gain that time back as you heard Mike reference to reinvest in their business. So there are-
Will McKenna: Yeah.
Paul Cieslik: ... a whole host of takeaways here, Will, and I think there's a vast amount of insight here that I would strongly suggest the audience just take a peak at to kind of get going.
Will McKenna: That's great. And that four-step client conversation has been, I think, really powerful for folks. And Leslie, I'm going to bring you in right now. I wanted to get back to the audience, a couple of folks were asking about, hey, did we do any cut here around solo practices, solo practitioners? So I don't know that we did, and that might be one for us to take away and work on Mike, as I think about, you know, we're going to be, I think, getting, wringing much more insight out of this study over time. So expect us to really make this a year-long focus. So more to come on that. Leslie, you also have some great resources on PracticeLab. You've got this kind of brilliant series around tax, estate, other financial planning topics, but it's kind of built around people's key milestones in their life … but tell us about your series that's on the site.
Leslie Geller: Right. So we've been calling this series the My Client Series, and we talked earlier about how getting involved in these areas with clients does not have to be complicated; it doesn't have to be deep; it doesn't have to be full service. And so, what we set out to do is pretty much reformulate that same old planning content that everybody's seen in a way that's specifically directed towards advisors and supports them in this 1% shift — this doing the little things to become more efficient and to grow their practices. And particularly in this area of tax and estate planning, advisors need wide shallow knowledge, right? They need to know enough to be able to spot, identify the topic that is most relevant to the client, ask the right questions and point the client in the right directions.
So we came up with this series that's specifically designed to support this, and it categorizes the content by life stage or common client situation, very easily recognizable. So as you click through that Rolodex in your head, immediately comes to mind the group of clients that the information is going to be relevant to. And then it gives you three or four really actionable ideas or conversations to bring up with the client who's in that life stage or situation. So, for the client who just got divorced, we give you a list of areas in their estate planning documents that should be revised. We indicate some of those factors that determine whether you should be asking their estate-planning attorney about a QDRO, you don't even have to know what a QDRO is, right? But it's a really important topic around divorce; you can help the client identify that's an issue.
For the client that's just received an inheritance, come into a lot of money, we give you a list of questions that the client should discuss with their estate-planning attorney. What's the form of their inheritance? Do they get it in trust? Do they get it outright? Should they be thinking about a disclaimer. Some of those issues, that it's not your responsibility to help them make the decision, but just to identify them. And we really wanted content where there was no synthesis required. It was, you read it, you can use it in your meeting that you have in an hour.
Will McKenna: Oh, that's great. One of the most popular articles I can tell you that we have on PracticeLab is this idea around how to run a family wealth briefing. Leslie wrote this, and I have to say, again, back to the point I made earlier, super-comprehensive, tons of value, tons of great information in there. And again, you're going to see checklists, workbooks, plans, steps. Leslie, give us a few highlights for this piece, and then I'm going to bring us home.
Leslie Geller: So we talked a little bit earlier about this, but we very deliberately call this a family wealth briefing, not a meeting. We wanted to drive home this point that this type of support for clients is all about facilitating communication and transparency, because these are really the foundations of healthy wealth transitions. And what this article does is it lays out the advisor's role in the family wealth briefing very simply, right? Back to identifying the need to the family, identifying the issue, and then providing the infrastructure and facilitating the process. And that can be family-specific. It can be sending out the email, sending out the Zoom link, coming up with the agenda, having the follow-up items, determining who is actually going to come to the meeting. All of those things that the family is not going to do on their own, but that you can provide a tremendous amount of value just by pointing them out and then helping them execute.
And my favorite part of this article is it goes through a list of family archetypes. So those common types of families that we all encounter — the family with the matriarch who doesn't want to give up control, the family with the patriarch who thinks they are immortal and never going to die — and then it customizes the type of support you can provide through this family wealth briefing process. Back to that whole idea of being responsive and flexible to the family's particular needs. The benefits of being involved in this family wealth briefing infrastructure and process is so multifaceted, and I think that's one of the reasons this article is so popular. But being involved in these conversations around family wealth transitions give you automatic exposure to wealth that's above your clients, and wealth that's below your clients, right? Those connections to the older generations, to the younger generations who are going to inherit the wealth. It also gives you exposure to the client's other assets that you don't have. It gives you exposure to the client's other COIs: their estate planning attorneys, their CPAs, their grandparents' estate planning attorneys and CPAs. It's also makes you a key part of the conversation and the process around wealth transition, and we all know that that is a key time when money changes hands, right? And you can either get more or lose some, and being involved from the beginning in these wealth transition discussions is going to make it a lot more likely that you keep what you have and also bring in more.
Will McKenna: Wow, that's awesome. And, and now I'm sitting here thinking, “What kind of family archetype am I?” … so you have me puzzling over that for a little while. Suffice to say guys, we have some great resources on this site, and I'm seeing some questions come through. How do I get these resources? Where is PracticeLab? So let me bring this home, and in the interest of time, close this up here and leave you with a couple of final maybe next steps. First of all, I believe you should have a link to PracticeLab in your additional resources tab, but basically you can just go to practicelab.com, all one word, practicelab.com. That's our call to action number one, please go there and do that.
Number two [is] related: Download this report — this study, this Pathways to Growth — spend some time with it. There's a lot more detail and richness in there [that] I think that can be helpful for you. And then number three, maybe most importantly, reach out to your Capital Group team and talk to them about what resources Capital Group can bring to bear to help you with, whether it's PracticeLab, this study, connecting with Leslie's team, connecting with Paul's team. Boy, I got to really say, what a great audience today. I'm delighted at all the comments that came through, really fun, really helpful and great, and we're going to be combing this and seeing what we can do to improve what we're doing.
Just to read off a couple of these: “Are these resources free or is there a charge?” They are free. “Do you have versions that are client-facing?” Some of it is. “How do we get access to this PracticeLab?” Here's one for you, Leslie. I'd like to know about the beach scene behind Leslie. Thanks. So …
Leslie Geller: (laughs)
Will McKenna: Really love what we've gotten from you guys. Thank you for making it so interactive. I hope it was worth the hour for you. Don't forget to make use of the additional resources, the CE credit link there. That's all the time we have today. Thank you, Mike, Leslie, Paul, what a great conversation, lots of fun. We hope you in the audience found this as helpful as we hope it is, and don't forget to take advantage of all the resources of PracticeLab, the report. Thanks again, and enjoy the rest of your day.
Paul Cieslik: Thanks everybody. Thanks, Will.
Will McKenna: Thanks guys. (silence)
Get primed for growth!
The highest-growth financial advisors engage in specific best practices that help them grow more than 60% faster than average. Learn how they did it in the Pathways to Growth: 3 success factors of the highest-growth firms webinar, which unveils the key findings from our national survey of more than 1,500 advisors.
Join Mike Van Wyk, Capital Group’s vice president of customer research and insights, as he provides insight on some critical practice management activities and behaviors that are associated with growth … and some that aren’t. Plus, get practical tips on how to bring these success factors into your practice from Practice Management Consultant Paul Cieslik and Wealth Specialist Leslie Geller.
What you’ll get:
- Three strategies behind the success of the highest-growth practices.
- Success stories and high-impact strategies you can implement now.
- Pathways to Growth: Capital Group’s 2021 Advisor Benchmark Study.
- Continuing education (CE) credit for CFP and CIMA.
Who will benefit:
- U.S.-based financial advisors at any career stage seeking accelerated growth.
Watch on demand for one hour of CE credit for CFP and CIMA designations. Take the CE credit quiz.
Mike Van Wyk is a senior market research manager at Capital Group, home of American Funds. He has 23 years of industry experience and has been with Capital Group for four years (as of 12/31/2019). Prior to joining Capital, Mike was director of global strategy development and advanced research methods at Procter & Gamble. He holds an MBA from the University of Texas at Austin and a bachelor's degree in horticulture from Michigan State University. Mike is based in Los Angeles.
Leslie Geller is a wealth strategist at Capital Group. She has 13 years of industry experience and has been with Capital Group since 2019. Prior to joining Capital Group, Leslie was a partner at Elkins Kalt Weintraub Reuben Gartside LLP. She received an LLM in taxation from New York University School of Law, a juris doctor from Boston College Law School and a bachelor’s degree from Washington and Lee University. Leslie is based in Los Angeles.
Paul Cieslik is a senior vice president, advisor education specialist and national speaker at Capital Group, home of American Funds. He has 28 years of investment industry experience and has been with Capital Group for 19 years (as of 12/31/2019). He holds a bachelor’s degree in business and economics from St. Anselm College. Paul is based in Boston.