Journal of Financial Planning: October 2023
Greg Opitz is an executive business coach at Carson Coaching. He formerly served as managing director of certification services at the Certified Financial Planner Board of Standards. He likes to say he spent four years educating advisers, seven years certifying them, and now he helps them enhance their business and their lives. Carson Coaching is the official coaching partner of the Financial Planning Association.
How many things in life allow you to help more people and make more money in the process?
I know of one for sure: moving from a financial planning practitioner to CEO of your firm. But doing so requires a mindset shift.
What does it mean to shift from practitioner to CEO? First, it means seeing your business as the biggest line item on your personal balance sheet. It means designing a whole new calendar and focusing on strategic thinking and planning. It means being comfortable with plagiarism (I’ll explain in a few paragraphs). And it means shifting from working with one client at a time to focusing on scale.
Think back to why you got into this business. Likely, it was to help people. In all this shifting of mindset, your mission doesn’t change: your mission can remain to help people. Your vision, however, will be modified. You’ll still have this big mission of helping people and having a planning-centric firm, but the vision gets bigger.
You likely started out wanting to be in the 150 (million in assets) Club. Most people in the 150 Club have 150 great clients, $150 million under management, and 150 days off. Then you moved to the Half B (billion) Club, then the One B (billion) Club. The client-centric mission stayed the mission, while the vision grew!
At some level, you know that industry consolidation and rising client expectations mandate that you keep getting better. The firm you have today better not be able to compete with the firm you have tomorrow. If you stay the same, you’ll get trampled. Value propositions are getting better all over the place, so you need to shift to being more strategic and keeping up with the best practices in the industry.
The Mindset Shift
I challenge you to think about your personal balance sheet—your house, investments, business—and determine what’s the single biggest item on the balance sheet? For many it’s your business. Especially with the growth of your business and valuation enhancements in the industry.
My simple question to you is: are you treating it like it’s your biggest asset? A practitioner doesn’t because they see their practice as a practice—they think about it as a piggybank and as cash flow. But an owner and CEO thinks of it as the biggest asset on their balance sheet. They think about key performance indicators, the profit and loss statements, management, and creating enterprise value and price value they can eventually monetize. Many CEOs are creating true enterprise value and a firm that doesn’t need them to run it.
You need to shift away from being the person who gets to meet with the clients and has those client connections to the person who’s delivering client value at scale. That shift is from being an unconscious competent in financial planning to being a conscious competent in running the business.
Every week, our team gets our company newsletter. While it’s full of great information, it starts with a ticker—the figures (assets under management, net new assets, year-to-date net new assets) and our families served. As of this writing, the most recent figure for that was 46,857.
I think back to the days when Ron Carson, our founder and CEO, was still an adviser. He was limited to the number of families he himself could serve. But when he made that shift from being in the trenches to focusing on scale and enterprise value, he created a company full of people who had the same mission as he did. Now the company serves tens of thousands of families, an impossible feat for one person alone. This was the case for many major firms with a CEO who was once in the trenches, not just Carson. Think about Charles Schwab and the scale it has been able to achieve since Schwab himself moved out of the trenches.
Now keep in mind this shift isn’t like flipping a light switch where you shut off being an adviser and turn on being a CEO. It’s more like a dimmer switch. For example, you don’t go from 150 clients to zero clients overnight—you get there in stages. The stages come with new hires who can help take things off your plate. For example, you might hire a director of operations and spend less time there. You might hire a chief investment officer and spend less time there. Eventually, your job description gets down to the firm’s strategic direction and human capital (hiring, mentoring, and managing people) and, to a lesser degree, personally generating new business and having clients.
As CEO, you’re still providing client value, but you’re able to do so for more clients. You’re still in the business for the right reason: to help people. But now you’re able to build something that can run when you’re not there. To deliver that client value at scale, identify your vision and strategic direction, then train, mentor, and educate your team so they can do the things you were doing.
The CEO’s Calendar
When you move from practitioner to CEO, your calendar will change.
Harvard Business Review found that 97 percent of leaders think being strategic was the element most important to their success, but 96 percent of leaders reported in a separate study that they did not have time for strategic thinking and planning.1
When you become an owner or CEO, your calendar will completely change. As an adviser, you’re doing client meeting preps and meeting with clients. Now you’re focused on managing the office.
Your meeting rhythm will change. You’ll have to incorporate time to meet with your team, meet with your executive team, and you must incorporate time to be strategic, shifting from having your head down in the trenches to focusing on strategic thinking.
One of my coaching members moved from practitioner to CEO and now has their Mondays and Fridays carved out for strategic thinking and strategic planning. You must take time away from the office to focus on blueprinting your business—meaning you are thinking about your business story and other things like your value proposition, the strategic investments you need to make to compete, your vision for the future, and what you must do to make that happen.
You also have to focus time on your organizational chart. Consider: who are the next hires? How many advisers or planners do I need? Do I hire a COO or an investment officer? What is my compensation structure? A sizable chunk of that thinking is going to center around your human capital and organizational chart. If you can get your organizational chart right and get the right people on the bus and in the right seats, that will do more to achieve your vision than anything else.
Then, after you produce those things during your strategic planning session, your goal is to share that with your team so they can bring the vision to life. Part of this is having a team retreat at least once a year and having quarterly meetings to create goals or initiatives. You also want to meet with the executive team weekly and your adviser team weekly. If you have a separate operational team, you will also want to have a regular meeting cadence with them.
You are now spending your time developing the vision and value proposition you want to create—but now you are doing that with your team and having them execute. You have now created ambassadors and advocates for your firm who will go out and tell the story for you.
Be a Fast Follower
Being a CEO doesn’t necessarily mean you’re a trailblazer.
Most people in our profession realize that in this industry you don’t necessarily want to be leading-edge anything—rather you want to be a fast follower. You want to plagiarize innovative ideas. While that is not recommended when it comes to writing (I promise I wrote this article from scratch), you don’t need to be out there trying to figure out everything on your own.
Think about AI, for example, or another new technology—do you need to gain the expertise to build a new piece of technology that will cost you a bunch of money and then not work out? No. But think about business ideas—those are things you get from others and use.
There are several places you can find ideas to implement in your business:
- Study groups. Right here in your Financial Planning Association community, you have a version of study groups in your Knowledge Circles2 where you can go to learn from other members about things that are working in their businesses. You can also start your own study group based on your niche or interests.
- Communities. The FPA community and any other groups of advisers and planners you may be associated with are also a great source of business ideas you can follow.
- Business coaches. Coaching programs are another way to gather new ideas and insights into proven paths and finding solutions that might be a good fit for you.
- Conferences. You have your pick of conferences in this industry. There’s always something going on, from FPA Annual Conference and FPA Retreat, to Exchange, XYPN, or Carson Group’s Excell. Michael Kitces also creates an annual list of the best financial adviser conferences if you are looking for a conference that might appeal to you.3
Those avenues can help you find people who are implementing successful strategies that you can then adopt to be a fast follower. This has been a solid strategy many successful business owners have embraced. In fact, the late Steve Jobs and Apple did not invent the MP3 player, but they were fast followers and made it successful.4
As CEO, your strength may not be coming up with creative and innovative ideas, and you don’t need to—you just need to be able to implement things that make sense for your business.
Setting Aside the Time
Becoming the CEO of your firm isn’t like becoming CEO of a Fortune 500 company. You will still do some of the in-the-trenches things that need to be done. However, you need to have enough time allocated to get off the island and stay abreast of what’s going on in the industry, what the best firms are doing, and replicating that.
It’s not that hard when you really think about it. By being an FPA member and reading this publication, you’re already participating in the community and keeping abreast of industry trends and best practices. Now, all you need to do is set time aside to do the rest.
Endnotes
- Clark, Dorie. 2018, June 21. “If Strategy Is So Important, Why Don’t We Make Time for It?” Harvard Business Review. https://hbr.org/2018/06/if-strategy-is-so-important-why-dont-we-make-time-for-it.
- Visit https://fpalearning.onefpa.org/knowledge-circles to find a knowledge Circle.
- See Michael Kitces’s list of the best financial adviser conferences at www.kitces.com/master-list-top-financial-advisor-conferences-ranked-best/.
- Boilen, Bob. 2011, October 5. “How Steve Jobs Changed the Way We Listen.” NPR. www.npr.org/sections/allsongs/2011/08/24/139929797/how-steve-jobs-changed-the-way-we-listen.