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As I click the button to pay my annual dues to the CFA Institute, I wonder if being a CFA ® charterholder has made any difference in my career. I actually think that holding this designation held me back as an advisor because I was pigeonholed as a “mathematics person” who should be managing the money, not as someone who can help clients with all aspects of their financial lives.

Reasons not to outsource – The Half-truth and whole-truth

It’s very common for advisors to put sales and marketing last after all investment and operational aspects of the practice are met. I’m going to suggest something radically shocking.

An advisor is a salesperson.

Now before you all beat me up on APViewpoint, my statement is provably true by the nature of the business. All client relationships will eventually face one of these outcomes:

  • The client dies and hands down assets to heir who chooses to stay with you;
  • The client dies and hands down assets to heir who chooses to leave you;
  • The client leaves you for another advisor or to DIY; or
  • The client runs down his or her portfolio in retirement and has no assets left to manage.

The only favorable outcome for your business is #1.

Everyone hates to sell, but without the ability to fill your pipeline your business will always be vulnerable. No matter how big your practice, you are at risk of a financially devastating lawsuit, massive client exodus in a bear market, decline of AUM in a bear market, rogue employee leaving and taking half your clients, etc. The risks are endless.

This is true no matter how big your AUM or AUA. A bigger book of clients means more resources are required. I’ve seen the income statements; the margins don’t get richer the more assets you manage.