Why Advisors Hit a Growth Plateau after 3-5 Years (and What to Do When It Happens)
I have worked with a lot of financial planners at various stages of business development, and at some point, nearly every advisor starts to hit a plateau or a ceiling. The issue is no secret; there are practical limits to how far you can grow your practice if you only know how to land middle-income clients. Most advisors recognize the need to “swim upstream” and work with high-net-worth clients, but many fail to recognize the changes they need to make. You can change your trajectory as soon as you focus on addressing the challenges that pop up in the higher income brackets. You don’t have to wait.
Change Your Approach
I can’t tell you how many times I’ve met with advisors who told me they didn’t think they were ready to work with high-net-worth clients because they had only managed small portfolios. Advisors seem to assume that if they get really good at the status quo, they will eventually start to land clients with gradually higher net worth. The idea sounds logical on the surface, but it doesn’t work. Up-leveling your client base requires a deliberate shift in the way you deliver your service. You won’t have an easier time making the shift a year from now—or, for that matter, 10 years from now. You will only have missed out on opportunities. Advisors are often surprised to discover how soon they can make the necessary pivot, once they recognize what’s been holding them back.
Focus on Adding the Right Skills and Capabilities
I often talk to advisors who think they can attract better clients just by changing their message. Sometimes I hear advisors express frustration because they’ve spent a lot of money on advertising with little to show for their investment. While I do spend a lot of time teaching advisors how to change their messaging, the real issue runs much deeper. Having the right words doesn’t matter unless you know how to do what a high-net-worth client needs. Most advisors don’t incorporate tax planning into their service. If you want to work with high-net-worth clients, you need to be leading with tax strategy from the first interaction. When you understand your role as an advisor in the tax planning process, you will begin to see why the learning curve can be much shorter than you think.
Bring Tax Planning In-House
When it comes to talking about tax planning, here’s the part that advisors classically get wrong. They will say, “I can’t give tax advice, but I’ll refer you to a really good CPA.” When you’re sitting with a high-net-worth client, this line is the kiss of death. You’ve basically told the client that you can’t help them, and you will never hear from the client again.
Now, imagine a different conversation: “Based on what you just told me, I’m thinking there are a couple of tax strategies we might want to look into. Have you ever looked at strategies A, B, or C? If you bring me a copy of last year’s tax return, we can take a look at it together.” When you approach tax questions this way, you will see a night-and-day shift in a client’s response to you.
When it’s time to bring a CPA into the fold, you should direct the conversation. A CPA should be working with you behind the scenes to validate your direction and identify anything you didn’t think about. By keeping your seat at the table throughout the whole process, you bring much more value.
Where We Come In
You may not have any idea how to lead a tax-planning conversation or where to start. You likely never received any training in tax strategy. Most advisors don’t. But think about what even one high-net-worth client could do for your business this year. If what I shared above resonates with you at all, and you are willing to embrace a different approach, let’s connect. Click here to schedule a consultation and learn more about working with us.
About Heath
Heath Walters is a strategic tax planning specialist who partners with financial planners to provide behind-the-scenes tax planning expertise for the high-net-worth clients of financial planning firms. With over 20 years of experience as a CPA and Certified Tax Coach, Heath helps financial planning firms set themselves apart to ideal clients through coaching and specialized services that complement traditional wealth management solutions. Heath’s proven process for client acquisition has led to many advisors doubling their book of business in as little as 24 months. Heath has both a bachelor’s degree in accounting and Master of Science in Accounting from Appalachian State University. When he’s not helping financial planners reach their firm’s goals, you can find him spending time with his wife, Nancy, and their three children, Allie, Brianna, and Cooper, or fishing, grilling, and tackling home remodeling projects. He’s an avid Roll Tide fan as well. To learn more about Heath, connect with him on LinkedIn.