ORLANDO, Fla. -- If youre breaking off from a larger advisory firm to go it alone, consider a specialty practice, say advisors.
You gain a marketing advantage, and the more you do it, the easier it gets, Scott Oeth, a CFP from Cahill Financial Advisors in Edina, Minn., told advisors at the Financial Planning Associations annual conference in Orlando, Fla.
After working for larger firms for more than a decade, Oeth said he wanted to go out on his own, but on his terms.
SHARED NEEDS
Having a specific group of clients allowed Oeth to focus his practice around their needs, he says.
Executives like process, for instance, and want to see issues defined as well as a roadmap charting progress and milestones: They know they cant do it all themselves, and theyre used to delegating, he explained. But they also want to be involved in decisions and appreciate collaboration.
Corporate executives also share another challenge, which Oeth calls time poverty. "They just dont have enough time in their day, so I try to make their life as easy as possible," he explained. "If we have a meeting, I try to make sure the lawyers and accountants are [there] too, so nothing has to be duplicated.
To get business, Oeth said other professionals have been his best referral sources.
They are seeing the people you want to see, and are more equipped to evaluate who is the right client for you, he said. One of my best contacts has been a human resources executive." And while he says accountants have been the exception for him, he added, "I also make a point to find out the other professionals my clients are working with and get to know them.
Study groups with other professionals have also paid dividends, Oeth added. He said he was in a once-a-month study group that at various times included lawyers, bankers, trust officers, insurance executives and financial journalists.
The idea wasnt to do cross-referrals, but to share ideas, Oeth said. Nonetheless, once we got to know each other, we did talk about clients, and it did lead to new business.
ACQUISITION MISFIRES
Oeth said he'd focused on organic growth after a frustrating effort to buy other practices. Theres either a problem with a personality clash, the sellers inflated multiples, or getting outbid by somebody with more money, Oeth said. I ended up with better results by growing the business myself.
He has expanded his own base in part by working with corporate clients who have less than the minimum investable assets required by other firms.
Those clients fly under the radar of the competition, but they can grow quickly, and are highly leveraged with stock options that will pay off down the road, he noted.
Oeth said he much prefers his specialized silo approach to taking a role in an ensemble practice -- something he tried when he first went independent.
Its difficult to identify who is adding value in an ensemble, he told the audience. A silo approach is also good if you want a lifestyle practice. You keep what you make and theres no finger-pointing at the end of the day.
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