How should advisers “think big”?

Back in the 1990s there was a cartoon series called Pinky and the Brain. It was co-created by none other than Steven Spielberg. The titular characters were two lab mice – the first an accident-prone goofball, the second a raging megalomaniac.

The premise was neatly established by a brief exchange that prefixed every episode…

Pinky: “Gee, Brain, what do you wanna do tonight?”

The Brain: “The same thing we do every night, Pinky – try to take over the world!”

Needless to say, they never quite accomplished this rather lofty goal. But you certainly couldn’t fault their ambition. They were perhaps the ultimate embodiment of a mantra that has long underpinned a wealth of material on self-help and business success: “Think big.”

Despite becoming a cliché, this mindset can be a useful one for financial advisers. In this instance, though, it’s not a case of achieving universal hegemony before sunrise – it’s a question of capacity. Let me explain.

I launched Truly Independent in 2010 and set myself the challenge of assembling a team of 10 advisers. It was tougher than I expected. For quite a while we struggled to get past seven. Our next milestone was 20, which proved just as elusive.

In tandem, it took us four years to hit £500,000 in turnover. I remember delightedly uncorking the champagne when we managed it.

Fast-forward to the present day and we have more than 70 advisers and a turnover of £9 million. How did we do it? Looking back, I realise one of the major enablers was to plan with capacity in mind.

Getting to 10 advisers required building a business that could handle a hundred. Getting to £500,000 in turnover required building a business that could generate £5 million.

Similarly, going forward, we need to plan for a business that can keep a thousand advisers busy and produce a turnover of £200 million. That’s how we’re most likely to get to a hundred of the former and £20 million worth of the latter.

You may feel this sounds a bit over-the-top. You may even feel I’m just “talking the talk”. In fact, most of us – even if only subconsciously – apply this sort of thinking to many of the major decisions in our lives.

Take the act of buying a house. Most people purchase a property that has a “spare room” – the name says it all, frankly – even though they know it will probably enjoy genuine use about twice a year.

Equally, many of us would very much like to own a fast and largely impractical sports car. But in the end we opt for something with at least four doors and four seats, because that’s how we accommodate our loved ones and get the shopping done.

One of the most effective ways for any adviser to develop capacity is to provide clients with an appropriate level of service. The key here is to abandon the constraints of a one-size-fits-all model.

For example, let’s say an adviser assumes every single client should receive “the works”. This might entail regular discussions, annual reviews and what the Financial Conduct Authority likes to call “ongoing advice”.

The first thing to note about such an approach is that it’s likely to be a significant waste of many clients’ time and money. It can be at best superfluous and at worst disingenuous.

But it’s not only clients who might suffer. This lack of flexibility can also hurt advisers themselves, because it represents a sure-fire means for them to erode capacity rather than accumulate it.

Why? Imposing “the works” on all and sundry fails to take account of the bigger picture and the longer term. It saps resources and stifles opportunity. As an idea, it ranks alongside living in a broom cupboard or popping to the supermarket in a Ferrari F40.

Truly has four levels of service. They range from a light-touch, tech-centric, self-monitoring option to a highly personalised package. Fees are set accordingly. The simplest offering is suitable for around 60% of our clients, while the most comprehensive is appropriate for 10% or so.

This is a vital element of our growth. Being realistic – and, indeed, honest – about which clients are likely to benefit from each service enables us to continue creating capacity and keep thinking ahead. It allows us to see beyond the usual targets of increased sales and greater profits.

Like Pinky and the Brain, we may fall agonisingly short of global domination. But an ever-expanding cast of happy advisers and satisfied clients ranks as a pretty close second in our book.

Andrew Goodwin is co-founder and CEO of Truly Independent and the author of ‘The Happy Financial Adviser’.

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