Having interviewed hundreds of successful financial advisors over the years, I’ve noticed that the best advisors share many common traits. And while we often assume that success means doing many things better than anyone else, it’s also true that we can fuel success by ditching what’s not working.
Here are five examples of what successful advisors give up:
1. Fear of the unknown
A great entrepreneur once told me that the difference between success and failure is the ability to accept the unknown. You have to be okay with not knowing all the details – and move confidently forward, through uncertainty. It’s the old “nothing ventured, nothing gained” maxim.
The most successful advisors I’ve interviewed over the years are constantly changing, innovating – and taking risks. They leave their old firms, ditch their old investment philosophy for a better one and feel confident and at ease with continual change. If you hadn’t accepted risk, you wouldn’t be an independent registered investment advisor – you’d be working for someone else drawing a steady salary. But what fears of the unknown are holding you back now – and preventing you from reaching your potential? Do you need to break out of a stable holding pattern you’ve been in for years?
2. Too much focus on the downside
Common sense says we need to consider downside risk – whether it’s in our investment portfolio – or jumping out of an airplane without a working parachute! But too much focus on the downside can limit our progress. I just interviewed a financial advisor who started his RIA in 2008, and who has gone on to create a successful retirement income and technology software niche. Upon hearing his story, I said, “Whoa, 2008, talk about starting in rough waters!” He replied, “It was a great time to start because so many people needed our advice.” There’s always an upside to every downside!
Wherever you’re at in life, try seizing on the positive. If you haven’t lived up to your potential – don’t see it as an anchor, but as a platform. Learn from your mistakes and move forward. Like the RIA did in 2008, try turning a potential negative into a positive. For instance, if your income took a hit recently because you were distracted from business development, look at areas of your business (or life) that did improve. Maybe you developed some relationships that you can now tap for future business. Maybe you created a better foundation for success in some aspect of your business. Try to list the good things that happened (before focusing on the bad.)
3. Refusal to delegate
Your team won’t grow if you don’t let them. And that means giving them meaningful responsibility and holding them accountable. If you’ve hired people who share your values and understand your goals – give them wide leeway in running their spheres. Tap into the creative intelligence of your team. I’ll never forget talking to an advisor in Kansas City who teamed up with an ambitious sales assistant and went on to increase his revenue by 400%. He completely delegated client service to her. Eventually, they became full partners. She was able to develop the relationships, and he honed the investment and financial planning offering. They had complimentary skills – and learned how to work together to run an amazing business.
4. Inability to accept loss
Along with being okay with the unknown, you have to be ok with losing – and know that it’s part of the bargain. Not every venture will turn out. There is a cost to success – and the cost is sometimes financially painful. It’s good to know where the hazards and the exits are. In the above example, the team that increased revenues 400% at one point went through a rough patch where they almost broke up the partnership. The junior partner likened it to a near divorce. But because they had a partnership agreement that spelled out how the partnership would end – in the event of a “divorce” both of them felt like they were covered. Having an “exit strategy” actually helped them work through their difficulties and continue on with the partnership to even greater levels of success.
Likewise, with clients, if you’re using an investment policy statement that explicit tells them, “You are willing to accept X % loss in any given year,” it gives them context and sense of calm when things go wrong. In effect, it’s saying – “we planned for this – and we have a plan for this.” In your business, you should likewise have a plan for what could go wrong – and an applicable exit strategy.
If you watch a lot of sports, you’ve likely seen many talented athletes flame out. They’re in their respective leagues maybe just one or two years, and they never realize their potential. Sometimes it’s the random bad luck of injuries, but most often it’s not putting in the work and implementing the systems that will lead to continuous improvement. Continuous (steady) improvement is the lynchpin of success.
Do you have systems in place to make sure that you’re continually improving? This might entail hiring a business or accountability coach, a marketing guru or publicist as well as technology consultants to help you become more competitive and efficient. Are you continuously adding components to your game? Maybe you need a better business development system – or a revamp of your retirement distribution techniques.
The best financial advisors realize that haphazardness has to go – if you’re going to rise to the top.The above list is certainly not comprehensive – but it’s good place to start. Give it a try today!