Building long-term value in a financial planning practice is important for a number of reasons.
Being able to articulate the value you deliver to clients – the ‘why’ of your firm – is critical to positioning your business for both growth and sale. And taking a long-term approach shapes the legacy you leave for both clients and community.
In creating practice value, you need to be able to clearly articulate the ‘why’ of you are in business. The passion, the vision and the values that you bring to work every day are fundamental to the success of your practice. If clearly lived, understood and articulated, this vision will not only help create a successful business, but live on long beyond your tenure as the practice principal.
It is also important that you surround yourself with a team that has bought into this ‘why’ you are in business, so they can espouse these values to clients and the broader community. A clear values-based culture can be a great positive for a practice by attracting both clients as well as potential buyers.
It is also important to take a long-term view in growing your practice. We like to talk about what the 50 or 100 year view is, and this raises a number of questions for the practice principal. For example, how will the decisions you are making today with regards to how you run your business set it up for the future? How would those decisions be different if you are planning for the business to be around for the next 50-100 years? What does this mean in terms of exit strategies, succession planning and the way practice principals rotate through the business? How will individuals within the business think about the experience that clients have, and what does this mean in terms of what people are prepared to accept in terms of short- and long-term value as you go about succession planning?
This is a much broader conversation about value, and extends beyond the practice principal to the value that is created for the community as a whole. It is not just about this year’s or next year’s sales, and requires a change in mindset in terms of how the financial advice profession currently approaches value creation and succession planning.
