Unveil the transformative power of turning resolutions into tangible results. In this video, we explore the critical bridge from resolution to execution, emphasizing not only the productivity gains but also the profound personal growth that comes from reshaping your reality.
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Using AI to create content? Don't forget compliance!
As financial advisors, you may be using ChatGPT or other AI tools to write and distribute content to clients.
But this short clip from the most recent episode of Always On contains an important caveat to keep in mind.
Stream the full episode here: paretosys.co/AODM_ep52
2024 Game Changer! Unveil the transformative power of turning resolutions into tangible results. In this video, we explore the critical bridge from resolution to execution, emphasizing not only the productivity gains but also the profound personal growth that comes from reshaping your reality.
For more on this, and other actionable best practices, download Chapter 1 of Duncan MacPherson's book "The Blue Square Method" today at thebluesquaremethod.com
Is prompting AI a skill? It sure is!
To get the best results, it is important to ask questions a certain way and use effective prompts.
To learn more about strategically deploying AI in your business as a financial advisor, check out the latest release of Always On, featuring Craig Kirkpatrick. paretosys.co/AODM_ep52
In our on-going consulting work, we find more and more financial advisors want to position themselves to successfully:
From a demographic perspective, there are three distinct groups among the many financial advisors we talk to on a regular basis. There are the 50+ advisors who are looking down the road at the eventual sale of their business. These advisors have been in the business a long time, achieved a high level of success, and are now three to five years out from transitioning to the next chapter in their lives.
Then there are the 30+ advisors who are extremely ambitious and want to light the after burner in terms of growing their respective business. But these advisors don't want to rely solely on organic growth, they want to acquire a business (or two), ideally from someone who has patiently and methodically built a durable business and is looking to exit.
And then there are the advisors somewhere in between who want to remain in the business but have a unique view on succession. Rather than sell, they want to leverage their momentum and plan for the future by grooming an associate (often a 2nd generation) or partner with an advisor (be it a junior or equal). While there is no specific timetable for succession, this advisor gets to create some scale, liberate themselves to focus solely on top clients, and create options for the future in the meantime.
Remove the Mystery
In each scenario, the key is to multiply the outcome and there are specific steps that can be taken to add precision to the process and predictability to the results.
Partnering is Not for Everyone
In the traditional partnering scenario there are countless examples of success, mediocrity and failure. The shining examples stem from an emphasis on fit and process. The also-rans stem from the fact there were few if any true synergies and the only real alignment of interest was to enhance the payout until the older partner transitioned out of the business. And the worst examples of a $500k advisor partnering with another $500k advisor and in time the combined revenue became $800k stem from a lack of preparation, incompatibility, and poor execution. 1+1 = 1.5 and with it came an increase in overhead and hassle factor.
In the case of partnering with a junior advisor, especially someone related to the lead advisor, it is essential that the protege' understand:
Too many mentors leave the protege' to their own devices to figure things out. You can't play to maverick talent, you have to play to process. The most successful advisors to partner with a 2nd generation or junior created essentially a franchise-ready environment. This not only freed the mentor to focus on the top 20% of clients knowing that the 80% were well taken care of by the protege', it created an upgrade feel for clients rather than a hand-off resulting in uncovering untapped new business along the way.
There are countless examples of successes, anticlimactic outcomes and outright failures in the acquisition world too - both for the buyer and the seller. The old model simply came down to the buyer focusing on what the business would cost, while the seller was fixated on what the business was worth with very little emphasis placed on the key intrinsic and proprietary assets. There was also very little thought applied to deploying a turnkey and proven process to communicate with the clients involved prior to, during, and after the transition.
Don't Sell a Book, Sell a Business
Many advisors who buy or sell a financial services practice are really only buying a book of business, not an actual business. There are several Key Performance Indicators that go beyond trailing 12. So what is the difference between a 1X transaction and a 2X or better multiplied transaction? Well clearly one of the most important issues is the quality of the client relationships. That has been proven to be just as important as the quality of their assets. How loyal are the clients based on how they have been served to this point of the relationship? Have they simply bought investments, or are they bought-in to a professional process? Metrics on empowerment, referrals, demographics and commonalities, commissions vs. fees and several other issues are key as well.
Put Time on Your Side
The bottom line is this, whether you plan to buy or sell a business in the future, it is essential that you get out-front and be well prepared to multiply the value of the asset and make the outcome as smooth and predictable as possible. Deploying a process demystifies the experience and ensures there is minimal opportunity leakage and that you don't squander your time.
There are More Sellers Than Buyers
As a seller, when you tighten up your business through organization and structure as well as essential best practices, you unlock hidden value in your business that differentiates you from all the others with similar aspirations. In 12 months or less you can execute a panoramic practice management process that a suitor will recognize as extremely valuable. Remember what a buyer wants; only pleasant surprises. They want the transition to be smooth, and the integration into their core business to be virtually effortless.
Acquire a Real Asset, Not Just a Collection of Assets
As a buyer, there are so many tangible and intangible issues to address in your due-diligence process. The key is to look for a business that has been built on a foundation of predictable, sustainable and duplicable processes especially as it relates to service and relationship management. Again, the quality of the relationships driven by the expectations they have and the experience they've received will have a profound impact on relationship durability and untapped potential going forward.
Many buyers in the past have acquired sketchy books thinking there was a vein of gold or all kinds of low hanging fruit just waiting to be uncovered. As a result, the buyer was fixated on the price of the acquisition rather than the quality of the asset resulting in an outcome that spiraled downward. With the benefit of hindsight came a lot of regret.
Dig Your Well Before You're Thirsty - Confucius
Remember, quality relationships last long after you paid for them. So get clarity on the issues that will impact your transaction and get organized with a plan and process. As a potential seller, the longer you wait and the less prepared you are, the less value you will get from your asset. As buyer, the longer you wait and less prepared you are, the more revenue and momentum you will forgo. In both cases, the dollars you make will be lower, but also in both cases the hassle factor and frustration will be higher. Preparation will help you squeeze more juice out of the orange.
Continued Success!
Explore the evolution of AI in finance from testing to widespread adoption. Delve into the industry's approach to integrating AI with compliance protocols, ensuring every step from content creation to client communication aligns with FINRA and SEC guidelines.
This is an excerpt from episode 52 of the 'Always On with Duncan MacPherson' podcast featuring Craig Kirkpatrick, founder of Act-Three Consulting.
Stream the new episode of Always On by clicking here: paretosys.co/AODM_ep52
Time to amp up your reputational equity and be a thought leader!
Consistent content creation is a great way to establish yourself as an expert in your niche.
And with AI, it has become much easier!
Play this short clip to learn how AI can make content creation (and as a result, your client communications) more efficient.
Stream the full episode here: paretosys.co/AODM_ep52
AI: Teenager or Trusted Business Partner?
"AI is like dealing with a teenager. Trust, but verify!"
So well said by Craig Kirkpatrick!
Craig is the founder of Act-Three Consulting, a firm that assists financial professionals in adopting and deploying AI within their businesses.
We had the pleasure of interviewing Craig on our recent podcast, where he shared meaningful insights for advisors.
Stream the full episode here: paretosys.co/AODM_ep52
Explore how a forward-thinking financial advisor leverages AI, including tools like Pictory, to prepare impactful legacy content for clients and their families. Learn how AI streamlines content creation, from market analyses to tailored educational materials, marrying high tech with a personal touch in financial advisory services.
This is an excerpt from episode 52 of the 'Always On with Duncan MacPherson' podcast featuring Craig Kirkpatrick, founder of Act-Three Consulting.
Stream the new episode of Always On by clicking here: paretosys.co/AODM_ep52
In the ever-changing field of consulting and financial advice, staying ahead of the curve is a necessity; but it's also a duty we owe to our clients. As the head of Pareto Systems, I've witnessed various technologies promising to transform our industry over the years. However, nothing compares to the impact ChatGPT and large language models are having on the profession.
The Power of AI in Enhancing Client Relationships
ChatGPT, a product of OpenAI, is not just another tech fad; it's a tool that is rapidly becoming indispensable. It's a digital brain, capable of processing vast amounts of information from the internet, turning it into actionable insights for advisors. Unlike traditional search engines geared towards advertising clicks, ChatGPT is designed to provide direct answers and solutions.
Consider a scenario where a client presents a complex 30-page real estate transaction for review. Traditionally, this would be a time-consuming task, potentially taking hours or days. With ChatGPT, you can get a comprehensive summary, key investment takeaways, and a balanced view of pros and cons in mere seconds. This not only saves time but also enhances your ability to provide prompt and informed advice.
Real-World Applications and Prompting Techniques
ChatGPT's utility extends beyond just data processing. It can be a partner in crafting communication strategies tailored to individual clients. For example, suppose you need to write a thoughtful email to a client about a specific issue. By providing ChatGPT with detailed client characteristics, it can generate a draft that resonates on a personal level, strengthening the client-advisor bond.
The key to maximizing ChatGPT's potential lies in effective prompting. Crafting precise prompts is an art that, when mastered, can yield highly customized and relevant outputs. Here are a few examples:
Embracing the Future
As financial advisors, our role is not just about managing wealth; it's about understanding our clients' aspirations, fears, and unique life situations. AI tools like ChatGPT allow us to transcend traditional barriers, offering personalized and efficient service. It's not about replacing the human element but augmenting it with technology's precision and speed.
In the coming years, AI will not only be a competitive edge but a necessity. The transition to AI-augmented advisory is not just about staying relevant; it's about elevating the value we bring to our clients. As leaders in our field, we must not only adopt these technologies but also become adept at leveraging them to enhance our client relationships and operational efficiency.
In embracing AI like ChatGPT, we are not just adopting a new tool; we are stepping into a new era of advising. An era where our expertise is amplified by the power of AI, enabling us to provide unparalleled service to our clients. As we journey into this exciting future, let us remain committed to our core values of trust, wisdom, and personalized service, ensuring that as the world changes, our commitment to our clients remains steadfast.
By Duncan MacPherson
