How I Saved My Practice
Two months away from the likely close of his RIA firm, Dave Grant changed to a specialty practice from a niche approach. It worked, he says.
Two months away from the likely close of his RIA, a columnist changed to a specialty practice from a niche approach. It worked.
TWELVE MONTHS AGO, I THOUGHT MY entrepreneurial journey might be over. I was two months away from closing my RIA because of client attrition and low funds. It seemed the sensible option. I had a safety net in the form of unsolicited job offers.
But in the year that followed, things not only improved, they accelerated to a level that I couldn’t have imagined.
I WAS GOING BROKE
For four years, my focus had been on teachers in Illinois who were nearing retirement. But while my potential audience was large, my actual client numbers didn’t provide enough income. I loved serving teachers, but I was going broke.
After long reflection, I decided to leave this niche and rebrand my RIA to focus on people nearing retirement in the suburbs of Chicago. The result? My target market grew significantly and my expertise and services became available to a broader market.
This move has been a blessing. In the first week, I met a 62-year-old prospect who runs her own business and was looking to move assets from Morgan Stanley. I went into the meeting feeling apprehensive. I held my breath waiting to be found out as a teacher specialist and not a business owner expert. When I asked how she found me, the response was “online, and seeing who was in Barrington,” where my office is located. She’s now a client and paying almost a fivefigure annual planning and investment management fee.
It continued to happen. People would find me through an internet search. They didn’t seem to mind that teachers had been my specialty. It led me to believe personality is a crucial part of choosing a planner. Prospects assume you have the expertise and want you to listen to them, understand their concerns and offer guidance.
As the number of meetings increased, so did the caliber of prospects. Local executives and successful business owners were talking to me and signing up for services. Even raising my prices by 50% didn’t hurt. My attempts at managing the flow didn’t stop five comprehensive planning clients from signing up within a two-week period.
The move away from the teacher niche was, and continues to be, working well.
I loved serving teachers, but I was going broke. Rebranding to focus on people in local suburbs nearing retirement greatly expanded the target market.
A DRAMATIC SWITCH IN FOCUS
Not surprisingly, I didn’t do this alone. Once clients understood my new brand and ideal client, they sent referrals who needed conversations about retirement.
It occurred to me that I was moving from a niche to a specialty practice. A niche centers on a specific problem you solve for people, while a specialty can be a demographic of people you serve. Previously, my focus was teachers navigating retirement and I was unable to convert prospects as I needed.
By moving to a specialized practice of
pre-retirees — with a multitude of problems that need discussion — it was easier for those around me to refer potential clients. My target client base had widened without becoming as broad as “anyone who can pay.”
While other advisors and a CPA sent me clients, many weren’t a good fit. Referrals remain integral to my success, but most new clients found me through online searches and professional networks. It will be interesting to see how this trend progresses.
One relationship, fostered over Twitter, is with a marketer. Throughout 2016, I followed his career. As he started building a content company, I contacted him to offer my writing services. While I reached out from a place of desperation, little did I know he had landed some institutional contracts that were far larger than he and his team had expected at this stage in the company’s growth. By building a relationship — initially online — and then offering to help in someone’s perceived time of need, I landed a wellpaid six-month writing contract.
The lesson? Yes, relationships are key to building long-term business success. But so is a willingness to help without an expectation of anything in return.
A TWINGE OF SADNESS
In the summer, my family spends time at a family lake house six hours away from our home. This year, we decided to spend two weeks at the lake, and I challenged myself to step away from work and allow myself time to think.
I realized I was living two professional lives. I had built a brand as a teacher specialist but was now moving into the general retirement-planning space. I had built two websites and was maintaining content on both. It was becoming burdensome.
After reflection, I decided to sell the brand and all of the assets of Finance for Teachers to fellow advisor Jeff Rose of Alliance Wealth Management and the blog Good Financial Cents. Jeff’s practice is in Illinois so the content was relevant to him, as were the potential client leads that came with various press mentions. I have confidence Jeff will transition the site and content into one that suits his needs, while also continuing to educate Illinois teachers.
There was a twinge of sadness as we finalized the sale, but it was combined with excitement at how much time this would free me to work on other things.
THE ANXIETY OF SUCCESS
I’ve experienced many emotions in the past 12 months. I started off in a low place. But each new client brought confidence that I could take into the next prospect meeting, into raising my fees and eventually adding premium services. Seeing things grow brought a huge sense of relief and pride.
But I didn’t expect to feel anxiety and fear when things started to go well.
Before this rebranding journey, I reverseengineered my personal income goals so I could relieve the pressure I was feeling. In my ideal world, I would be working 30 to 40 hours a week and earn $75,000 after business expenses.
As I write this, I’m working 20 to 25 hours a week and my income for 2017 will be close to $80,000 after expenses. This compares with earnings of $35,000 in 2016. The rest of my time is spent brainstorming business ideas, spending four to five mornings a week in the gym, indulging my creativity in landscape design and exploring other interests.
But this seemingly ideal scenario has created feelings of unrest. I’m concerned that my income will drop to prior levels, as about 50% of my income is based on writing work and one-time financial planning fees. I am frequently embarrassed when others talk about how hard their job is — even my wife.
I wonder if it seems as if I’m not fully committed to building my business. I keep reminding myself that it’s not the hours, but rather the results, that matter, If I can achieve my goals in less time, that should be celebrated. Reaching my income goal has not made me as happy as I thought it would. I hope that once I see it’s sustainable, my fears will subside.
I didn’t expect to feel anxiety and fear when things started going well. I wonder if it seems as if I’m not fully committed to building my business.
Dave Grant, a Financial Planning columnist, is founder of the planning firm Retirement Matters in Cary, Illinois. He is also the founder of NAPFA Genesis, a networking group for young fee-only planners. Follow him on Twitter at @davegrant82.