Practice Made (More) Perfect: Transforming a Financial Advisory Practice Into a Business
A new and revised edition of the eye-opening, no-nonsense handbook on managing and growing a financial-advisory business, Practice Made (More) Perfect is packed with industry insight and practical ideas that every leader and manager within a financial advisory practice needs to know in order to get the most out of their business. Regardless of how little time is available or how seriously challenged a firm may be, this book contains the information that can help. The principles of sound management apply to firms of all types, and the tools provided in this book are guaranteed to be applicable under practically any circumstances.
- Written by industry expert Mark Tibergien, one of the "25 Most Influential" people in the financial services industry
- A new edition of a bestselling Bloomberg title
- Includes fresh insight on recent topics, including how advisors responded during the latest meltdown, the implications of the aging advisory profession, the challenges of attracting and keeping both clients and staff, the role of organizational design in a growing business, recent changes in compensation planning and implementation, and key information on leadership and management in today's financial world
Many financial advisers run their businesses as if acquiring more clients will solve any and all problems, but without a strategic framework, more clients just lead to more demands and less time to meet them. The truly successful firm will build strategy, structure, and processes that will ultimately translate into increased profits, cash flow, and transferable value.
CHAPTER 1. The Financial Advisory Business: What’s Next? 1
What Are Top-Performing Firms Doing? 3
The Business as Client 4
10 Things to Think About 4
CHAPTER 2. Strategic Business Planning: Defining the Direction 11
Muddled Messages 12
What Is Your Strategic Differentiator? 14
What Is Strategic Planning? 14
The Strategic Planning Process 16
CHAPTER 3. ManagingWorkflow: The Back OfficeMoves Forward 35
Sources of Inefficiency 36
Achieving Efficiencies 37
Does Efficiency Come at a Cost? 39
Managing Risk 45
CHAPTER 4. Building Leverage and Capacity 55
Getting to the Next Stage 56
Becoming a Market Dominator 57
The Challenge of Growth 58
The Entrepreneurial Crossroads 59
Cornerstones of the Professional Practice 66
Models That Work 68
Leveraging Your Affiliations 72
Big Is Beautiful 76
CHAPTER 5. The Human Capital Plan: People Who Need People 81
The Problem You Can’t Do Without 82
Aligning Human Capital with Strategy 83
The Nature of the Work 86
The Nature of the Worker 90
The Interviewing Process 93
CHAPTER 6. Creating a Positive Workplace: Professional Development 99
The Career Path 101
The Appraisal Process 104
Coaching and Development 107
The Workplace 109
Building a Foundation 114
The Four-Way Test 115
Lessons on Inclusion 125
CHAPTER 7. Rewarding Behavior and Performance: Compensation Planning 129
Developing a Plan 135
The Components of Compensation 139
Establishing Base Compensation 149
Establishing an Incentive Compensation Plan 150
Owner’s Compensation 153
CHAPTER 8. Reading the Financials: Financial Management 155
Fundamentals of Accounting 155
Constructing a Financial Statement 156
Tying the Financials Together 165
CHAPTER 9. Income, Profit, Cash Flow: What the Numbers Are Saying 167
Formatting the Financials 168
Analyzing the Income Statement 169
Analyzing the Balance Sheet 179
Analyzing the Statement of Cash Flow 184
Financial Impact Analysis 185
CHAPTER 10. Managing Growth: The Search for Solutions 189
Harnessing Resources 190
Using Financial Leverage 192
Managing Cash Flow 194
How About Equity? 195
Referral Agreements and Joint Ventures 196
Practice Acquisitions 199
Investments in New Initiatives 203
CHAPTER 11. Exit, Stage Left 205
The Price of Indecision 206
Sale Planning versus Succession Planning 207
Wisdom or Obsolescence? 209
What to Do? 210
Keeping It in the Family 211
How to Make a Partner 217
What About the Successor? 223
Merger as a Succession Plan 226
So What Do You Do? 228
Seeking Counsel 230
Developing the Assumptions 231
Take Control 232
CHAPTER 12. On Leadership andManagement 235
What Defines a Leader? 236
Who Will Emerge? 239
Is Anybody Leading? 240
Rites of Passage 242
Ready, Fire, Aim 244
Awakening the Manager in You 248
Practice What We Preach 251
Hiring Your Boss: Do You Need a CEO? 251
About the Authors 297
Mark C. Tibergien is Chief Executive Officerfor Pershing Advisor Solutions LLC, a BNY Mellon company, and a Managing Director and memberof the Executive Committee for Pershing LLC. Foreight consecutive years, Accounting Today has recognized Mr. Tibergien as one of the "100 MostInfluential" people in the accounting professionand Financial Planning has identified him as a "Mover and Shaker" in their annual review of industry professionals. In 2011, for the ninthtime, Investment Advisor recognized him as one of the "25 Most Influential" people in the financialservices industry.
Rebecca Pomering is a partner with Moss Adams LLP and CEO of Moss Adams Wealth Advisors, the firm's wealth management division, where she is responsible for the growth of the firm, including strategic planning, sales and marketing, team development, human capital, CPA firm integration, financial management, and mergers and acquisitions.
One of the great ironies of the advisory business is that many of its practitioners—even those who do an excellent job of planning for their clients—do not take the time to strategize, analyze, and plan for their own personal and business success. In Practice Made (More) Perfect: Transforming a Financial Advisory Practice into a Business (Wiley; August 2011; $75.00; 978-1-118-01931-3: Hardcover; Available in all ebook formats), Mark C. Tibergien, Chief Executive Officer for Pershing Advisor Solutions LLC, and Rebecca Pomering, CEO of Moss Adams Wealth Advisors, provides leaders of financial-planning, investment-management, wealth-management, and other advisory firms with the techniques that make business managers most effective.
They focus on the critical management disciplines needed to master regardless of the size or profile of their business, including
- Strategy: the framework for a firm, which informs all business decisions. Each business has a different set of issues to consider but at a minimum, practitioners must have a clear idea of what business they’re in and how this informs who they hire, what technology they use, how they market and what defines success.
- Financial management: managing the bottom line. The dynamics of a financial-advisory firm require active management and a solid understanding of what to monitor and act on to translate revenues into profits, cash flow, and transferable value.
- Human capital: achieving effectiveness. The authors present selection techniques, leadership concepts, and reward systems that help reinforce business strategy.
- Operations: managing risk, processes, and protocols. Managing operations effectively hinges on how well you tie together the tools and processes that have already been introduced by industry vendors, broker-dealers and custodians.
- Succession planning: how to plan your exit. Building a business to last, not to sell, will guide owners on how to transition client and management responsibility as well as how to develop and expand the partnership.
This updated version includes new insights on recent topics, including how advisors responded during the latest meltdown, the implications of the aging advisory profession, the challenges of attracting and keeping both clients and staff, the role of organizational design in a growing business, and recent changes in compensation planning and implementation.
Whether operating as a solo practitioner or an ensemble firm, whether the business is commission-based or fee only, Practice Made (More) Perfect is the definitive guide to launching and growing an advisory business.
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