9 Tips Wealth Managers as Entrepreneurs Need to Know

March 3, 2021 by Greg

Wealth management is one of the most lucrative career paths that you can pursue. This is especially true for those who decide to open their own practice and work with clients directly. Although this is an opportunity that many wealth managers have at some point during their careers, not everybody understands that they need to have an entrepreneurial mindset to succeed. Not quite sure how to begin? We’ve got all the info you need. Let’s explore everything you should keep in mind about wealth managers as entrepreneurs.

1. Understand Your New Obligations

As you might expect, owning your own wealth management practice comes with a large array of different responsibilities. More often than not, you’ll have significantly more obligations than you would in your previous occupation.

For example, you’re not responsible for acquiring new customers, managing these relationships, dealing with contingencies that arise, etc. While this can all seem overwhelming at first, mentally preparing for it before you start your wealth management practice will help you quickly adjust.

Put simply, you will need to accommodate all of the responsibilities of a wealth management firm until you have a sufficient team put together.

2. Outsource Your Weaknesses

It should come as no surprise that attempting to run a wealth management practice by yourself often isn’t the best way to facilitate your future success. This is, of course, unless you have significant entrepreneurial experience.

In general, though, it’s highly recommended to outsource any weaknesses that you may have in order to run your practice more efficiently.

For instance, there are plenty of wealth managers out there who excel in their roles but aren’t the best at acquiring new leads, marketing, etc. So, it would make sense in this scenario to hire a dedicated professional for this role.

While many people attempt to keep their budget as tight as possible during their company’s early years, hiring the right employee will provide an exponential return on the amount that you invest.

3. Thoroughly Research Your Target Audience

It will be more important than ever before to have a strong understanding of your target audience. This means you’ll need to narrow down your demographic to specific attributes. Common criteria include:

  • Geographic location and time zone
  • Level of education
  • Net worth
  • Age
  • Occupation

There are plenty of other factors that you can consider, so this is merely a jumping-off point.

Having a better understanding of your audience will objectively increase how effective your marketing and advertising is. Additionally, you’ll be sure that you only work with people to whom you can provide the best level of service.

As time goes on, you’ll be able to define your audience even more accurately and optimize both your company’s performance and client satisfaction.

4. Focus on Acquiring New Clients

Both managers often have a substantial list of clients before they embark on their own to open a practice. However, this doesn’t mean that you can forego acquiring new clients.

In fact, it’s one of the most important obligations of running your own wealth management practice. As we’ve seen with the impact the COVID-19 pandemic has had across the entire world, it’s not impossible for entire businesses to become disrupted overnight.

To help mitigate the damage your practice experiences during a contingency, you’ll need to have an expansive list of clients. Acquiring new clients will also allow you to scale at a faster pace, which then provides you with the opportunity to hire new team members, implement additional types of services, etc.

5. Consider Hiring a Consultant

No matter how thoroughly you plan your wealth management practice, chances are that you will encounter a handful of situations that you aren’t sure how to overcome.

In some scenarios, this could directly impede how effectively your business is able to grow. Since the early years of a business are the most crucial when it comes to stability, it’s imperative that you do all you can to establish the best possible chance of success.

Fortunately, hiring a professional to help you navigate the problems you deal with is one of those effective ways to keep your business on the right track. When looking for a consultant, it’s essential to find one who probably showcases the past clients that they’ve worked with.

Not only will this give you insight into the work they’re able to provide, but an extensive client list also conveys a large amount of experience in the industry. Additionally, you’ll want to work with a consultant who is both accessible and easy to communicate with.

This will ensure that they are available whenever you need their input.

6. Always Remain Compliant

Certain core obligations can get lost in the vast amount of responsibilities that you have. But, it’s absolutely imperative that your practice always remains compliant with industry regulations.

As a wealth manager, you should have no issue adhering to industry-related standards. However, you also need to ensure that everyone on your team does the same. Since even a single incident of noncompliance can result in significant penalties, fines, etc., you need to do all that you can’t educate your staff and audit their behavior on a regular basis.

7. Clearly Define Your Process

In order to maintain a consistent level of performance, it’s recommended to create a comprehensive outline of your process as a wealth manager. Not only will this allow you to easily repeat it in the future, but it may also provide you with insight into areas that need improvement.

For example, you may discover that the solution development stage is not as fleshed out as it could be. Without taking a closer look, you can find yourself in a scenario where you assume that the results that you generate are optimal even when they aren’t.

This endeavor will also allow you to provide your potential clients with a greater insight into how are your firm operates. For those who haven’t yet decided on a wealth manager they’d like to work with, this can be an effective way to help generate interest in your firm.

8. Automate to Your Advantage

Taking advantage of automation software is one of the most important steps you can take for your company’s success. 
Not only will this allow your team to focus on the core responsibilities related to the role, but you’ll also be able to automate a large number of tasks that would be time-consuming to perform manually.

One of the most prominent is report generation, especially for wealth management practices that have a large volume of clients.

Under the right circumstances, you can utilize automation software to generate and send reports to clients entirely on its own. But, automation software isn’t the only type that’s useful for your practice. Anything that allows you to stay more organized, improve your productivity, or aids you in a similar way is worth investing in.

This is often true even for software that costs a significant amount of money to license, as the long-term payoff will highly outweigh the initial cost.

9. Optimize The Services You Provide

Wealth management firms provide more than just basic financial planning. Professional wealth managers can also offer legal assistance, estate planning, guidance when handling tax obligations, etc.

But, it’s not uncommon for a wealth management firm to place a higher emphasis on certain responsibilities of others.

Put simply, if you offer a particular service you’ll need to strive to provide a top-tier performance in the area. This is particularly true since your competitors are likely doing so themselves.

If you’re unable to provide a comprehensive level of service at your firm, it’s not unlikely that your clients will simply switch to a practice that can. In many cases, this means strategically building your team to include professionals who have the requisite skills to do so.

To elaborate, it wouldn’t make sense for all of your employees to have extensive financial planning knowledge but have little expertise in other areas. So, keep this in mind before starting your practice, as it’s one of the most important attributes of a successful wealth management firm.

Success for Wealth Managers as Entrepreneurs Is Within Reach

And the above information will make the process far smoother. From here, wealth managers as entrepreneurs will be able to ensure that you grow your practice as efficiently as possible and avoid obstacles along the way.

Want to learn more about what we have to offer? Feel free to reach out to us today and see how we can help.

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