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#8: The (Super) Power of a Leveraged Ensemble

Many advisors struggle to scale their business and effectively serve their clients for a simple reason: they’re forced into being what we call “low-power” advisors. That’s not to say they aren’t talented, or they don’t have the skillset to be high-powered advisors. Quite the opposite! Advisors often become “low-powered” as a result of their success.

Luckily, there’s a simple solution for advisors to step into their role of a high-powered advisor: the streamlined advisor ensemble. Let’s talk about how complexity and leverage can help you plug into a well-built ensemble and tap into your power as an advisor.

Creating a Scalable Practice with Physics

Did you ever imagine you’d use a college physics lesson to create a high-power advisor practice? We didn’t either! But the physics of power is incredibly applicable for advisors:

In physics, we learn that power is the quantity of work being done over time.

Engineers know that you can increase power by raising the amount of work done in a given time, or by reducing the time required to produce a quantity of work. But if you can do both, it’s like a superpower. If you can both increase the amount of work done and reduce the amount of time, then you’ve got superpower.

As financial planning practitioners and wealth managers, our work is not measured in watts or joules but in clients helped, good decisions made, and client self-sabotage avoided. This happens when knowledgeable professionals are engaged meaningfully in clients’ lives through meetings, calls, written letters, and email communication.

For shorthand, let’s call all of that “advice.” Advice is meaningful engagement in clients’ lives. We’re going to revisit our physics formula and say power equals advice divided by time.

Most advisors are far less powerful than they could be, because their time is not dedicated to advice. In fact, it’s swallowed up by all kinds of other tasks, chores, and other minutiae that is anything other than advice.

Everybody listening today knows that no matter how efficient you are or how well you work, you only have 168 hours each week to use in work and in life. If you’re averaging 40-50 hours each week at work, only a small portion of those hours are being used to actually give advice. This results in a lower output.

Low-Power Advisors

No financial planner starts their career looking to be a low-power advisor. Unfortunately, it’s something that tends to evolve over time. For example, an advisor may start out as high-power. All they have is time on their hands when they launch a practice or start a new job. Then, as they continue to get loaded up with tasks, they are unable to provide as much advice as they used to be able to.

These tasks might look like:

  • Reading the Wall Street Journal
  • Reorganizing your CRM
  • Following up with cold leads
  • Making trades
  • Performing admin duties
  • Technology due diligence

All of these tasks are important, but none of them make a direct and positive impact on the lives of your clients. If the goal of a high-powered advisor is to consistently be providing advice and powerfully impacting their clients, these tasks don’t make the cut.

High-Power Advisors

Now, a high-power advisor is quite a bit different. A high-power advisor is thinking about how to add value to their clients’ lives on a regular basis. They’re very solution-oriented. They really have a desire to know and understand the needs that their clients are going to have before the clients themselves actually know that. That’s really how I see that difference between that low-power and high-power advisor.

Essentially, a high-power advisor is focused on action versus thinking about acting. They’re tuning into how they can increase their power, or how much advice they’re able to give. This might mean taking on more clients, or providing a more high-touch service to existing clients. They’re not distracted by non-advice-oriented tasks, and are always thinking about client solutions.

What Limits An Advisor’s Power?

What plunders our power as an advisor?

Low output doesn’t necessarily mean that an advisor is lazy or has bad intentions, not at all. But we all know Superman’s superpowers can be canceled out by kryptonite. In the same way, there are forces lined up against an advisor’s power. A financial advisor’s kryptonite includes things that look like they’re important, but they don’t actually help clients. Here’s just a short list of some of the power thieves that we have both experienced and observed:

  • Meeting with wholesalers
  • Negotiating copy leases
  • Landscaping and office maintenance
  • Updating beneficiary forms
  • Entering trades
  • Processing redemption requests
  • Updating a CRM contact
  • Selecting software vendors
  • Analyzing investments
  • Paying bills
  • Managing payroll

All of these tasks are still important, but they’re not contributing to an advisor’s power. Every advisor ends up performing these tasks at one point or another, and when you are a solopreneur or a small business owner, it gets more and more difficult to avoid these tasks. They’re necessary to keep the lights on!

However, as a high-power advisor, it’s your job to ask yourself:

Is there a better way?

Luckily, there is an answer. There is a solution to these problems: the ensemble advisor practice.

Leveraged Ensemble to the Rescue

Advisors who maximize their advice, and therefore their power, have learned to rely on an organizational structure called a leveraged ensemble. Ensemble means that a whole team of people serve the clients. Of course, there’s a lead advisor to be the trusted point of contact and to deliver advice.

In addition to them, there is an investment team, operational team, support and service advisors, human resources, accounts payable, finance department, as well as technology and legal support to help the business run well. The leveraged part of the team means that as more and more non-advice tasks are removed from lead advisors, they get to spend more and more of their time delivering advice to clients.

This frees high-power advisors up to focus on the four most important aspects of supporting clients:

  1. Generating leads
  2. Setting up new relationships
  3. Making strategic financial plans (and plan updates)
  4. Setting expectations so their team can execute with consistency and precision

When we think back to our “power formula” (power = advice/time) these four key activities continue to level up an advisor’s power.

Of course, building a leveraged ensemble from the ground up is hard work. Still, the data shows that when you aren’t part of a data ensemble, productivity and profitability steadily decrease over time as more tasks get added to your plate. So, the answer many high-power advisors are seeking lies within finding an ensemble practice to join.

If you’d like to learn more about a leveraged ensemble, you can certainly check out our website, cxinstitutional.com, and you could schedule a call with our corporate development team. You can send a note to our email, info@cxinstitutional.com.

I want you to know that we’ve got a white paper about the superpower of our leveraged ensemble available at our website. It includes a little more detail on how an ensemble works and can act as a resource as you continue to lean into your power as an advisor. You can get that resource below.

 

Want more information on this topic? Download the one-pager below!

The (Super) Power of a Leveraged Ensemble

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