For over 15 years, the concepts used in Practice in Action! have been delivered in practice management/business coaching programs for independent broker dealers, bank broker dealers, bank trust departments, law firms, investment technology firms, and independent advisors. Across these firms, Practice in Action! deals with the business-building issues of business planning, time budgeting, marketing, sales, service, and execution, all of which are grounded in the day-to-day realities of running a professional services firm.
Selling Knowledge: Developing Tangibility
Out of college, I was trained in IBM’s sales school for eighteen months. My sales territory was large banks and my years in the selling trenches were successful. However, it wasn’t clear to me then that a large measure of my success rested on the fact that “no one gets fired for buying IBM.” (Note: in the 80s, IBM was to technology what Apple is today.)
My view of selling changed drastically when I began my thirty-year career selling financial services. I lost the comfort of demonstrating tangible products like computers and was faced with proving benefits in a knowledge-based service as captured in an investment style or performance history.
Also, instead of selling from a position of market dominance, I marketed investment services as a decided underdog with New York Life’s 401(k) retirement division in which we competed against the likes of Fidelity, T. Rowe Price, and Vanguard.
There was no quick brand or prestige fix. The answer came in active listening to companies’ frustrations about investing’s complexity to an uneducated employee base; a reality at the time largely ignored by the top players.
You see, these 401(k) plan sponsors had customers too: the employees investing in the retirement plan. New York Life’s market stature deficit proved much less significant when solutions actually solved problems with clearly understood benefits.
Over the years, these lessons proved valuable time and again as I sold services across a range of circumstances, from my own investment software start-ups to turnkey investment solutions to venture capital investments for direct investment by high net worth individuals to business consulting services.
Amidst Complexity: Finding Understandable Differentiation
Financial services across all its segments is highly fragmented. While this offers opportunities for small firms to succeed, the noise created from one firm’s marketing campaign to another is unlike any other industry.
Over the years as both a chief marketing officer and founder of four services businesses, I’ve seen the evolution from traditional marketing tools such as brochures and direct mail to fully digital campaigns. Where we sit today, common marketing tools more and more prove to be expensive and ineffective; a decidedly bad mix.
There’s nothing tougher than marketing into strong negative forces. Whether it’s the crash of 87, the technology bust of 2000, or the Great Recession, I’ve dealt with running marketing operations during all these calamities. And, I’ve done it with large companies and start-ups alike.
Wastefulness occurs when the marketing goal is flash and polish. I saw this so clearly during the late 90s when marketing venture capital investments during the technology bull market. When the boom turned to a bust, I carried forward my insights from my time at New York Life and focused on identifying demonstrable benefits that reshaped the role that private equity played in an investor’s portfolio.
This truism holds: “Necessity is the mother of invention.” In other words, only through marketing and selling through the crucible of tough markets do new approaches arise.
When people have been hurt financially, they’re also hurt emotionally; fear, uncertainty, anxiety, and distrust take over. Through the years, people, aware of the underlying complexity in financial services, really don’t want to deal with it (that’s why they’re in the market to hire a professional). What people want to know is: 1) how problems will be solved in terms they can understand and 2) what’s the plan to deal with two core issues: financial security and emotional security.
Much More than Paper: Business Plans that Work
I’ve founded four companies in which I wrote extensive business plans for each. In the venture capital business, I read through countless business plans for start-ups and emerging companies.
Comprehensive plans are expected when raising capital. Investors want to understand how you see the markets, validate your experience, and verify that you understand financial relationships.
After the deal is done, I appreciate the disappointment in seeing hours upon hours spent producing a polished business plan go to waste when the assumed world is supplanted by the real world; these are tough lessons I’ve learned. Yet, planning is essential to success.
Instead of a diffuse light pointing skyward (the traditional business plan), successful businesses (or any endeavor for that matter) require a pointed spotlight that guides and focuses.
Understanding this necessity, and designing a planning system to execute it (i.e. the Practice in Action! 45-day business planning methodology), allowed me to experience the satisfaction of seeing strategic plans materialize while linked to the day-to-day importance of getting work done.
The Fuel for Accelerated Growth: An Engaged Client Base
For over 15 years, my practice management/business coaching experience has involved me in the strategic and operational details of investment and advisory firms (traditional and alternative), law firms, financial technology companies, broker/dealers, and banks. Across the scope of these engagements, there were two formative experiences that forged my belief that an engaged client base was a true asset and like no other.
First, Spencer Trask Ventures was unusual in that its sole fund-raising channel for its array of start-up and emerging technology firms was high net worth individuals in the US and Europe. Much more than a financial network, we developed an investor community that engaged deeply in helping these fledgling companies solve business challenges, provided guidance to a firm’s functional leadership, sourced names for executive and board positions, and, most important, delivered a stream of business plans before other venture firms gained access.
Certainly, one part of the network’s motivation was self-interest (i.e. solving problems increased the likelihood of a strong ROI), but more than anything, this community enjoyed the challenge of building something. The key to engagement was being specific about the need for help and asking for it.
The second experience involved a much more rudimentary business: selling insurance advisory services. Given my experience with private placement life insurance, combined with my leadership of investment operations, I was engaged to consult for a combo insurance and advisory firm.
A few weeks after the engagement began I was in the field working with the firm’s founder. While my role was to serve as the investment expert, I observed the power of the in-home visit (quite a departure from my past, corporate experiences).
In a prospect or client’s home, there were no barriers to conversation. This atmosphere arose because the home environment served up ripe conversation starters pertinent to the insurance services themselves—family pictures, the home’s history, displayed heirlooms, and the neighborhood. Of course people were comfortable in their own home, but they also displayed their lives in far more detail than could ever be discovered if the meeting were in an office.
Although there was time getting to and from the meetings, it became very clear that this approach was far more productive (i.e. faster) in building a loyal client base than trying to do so in a string of in-office visits. Sitting in a person’s home emphatically communicated these powerful messages: the prospect/client was important; their time was valuable; we cared about their personal lives; solutions flowed after cementing the relationship.
Business Coaching Credentials
Financial Advisor Industry–Thought Leadership:
- Regular blogger for the FPA’s Practice Management blog
- Author of Journal of Financial Planning practice management articles:
1) “Creating a Trade Secret Protection Program”, October 2013
2) “Achieving a Higher Growth Profile with Multidisciplinary Teams (MDT)”, March 2014
- Editor and lead author of “The PPLI Solution”, published by Bloomberg Press, 2005
- “Move from Client Satisfaction to Client Loyalty”, a whitepaper written with George Kinder
Chief Investment Officer:
- Spencer Trask Asset Management
- Concord Wealth Management
Chief Marketing Officer:
- New York Life Investment Management
- Spencer Trask Ventures
Professional Services (as founder):
- Wealth Planning Consulting
- Concord Wealth Consulting
- Investment Software Solutions
Software Design and Development Businesses:
- The Balance Sheet Methodology (BSM)
- MBA, Harvard Business School (1987)
- Bachelor-Marketing, University of Colorado, Boulder (1981)