Advisors usually start their careers by joining an established firm, whether a wirehouse such as Merril Lynch, a captive insurance company like New York Life or a discount brokerage such as Schwab, TD Ameritrade, or Fidelity. The training they receive focuses on building client relationships, an understanding of risk and financial markets and learning best sales practices. It is no wonder then that when advisors decide to form their own independent advisory firm they are ill equipped with the skills needed to create a successful entrepreneurial business. Even an MBA does not prepare one for the rigors and challenges of starting and running a small business.
The lack of knowledge about the business of business can impede or incapacitate a new advisory firm. Even in those firms that reach a functioning level of assets under management and have steady yearly income will eventually experience a roadblock caused by business ineptitude leading to stalled growth and detracting from the level of exceptional service clients deserve and for which advisors are richly compensated.
I recently read an interview with Marcus Lemonis, star of the hit CNBC TV show The Profit which chronicles his intervention in floundering businesses that he helps improve. When asked “How does someone be sure they don’t end up in a place where they need someone like you,” he answered, “The first mistake is saying you don’t need someone like me. Even I need someone like me.” The discovery of knowing that you don’t know is the first sign of intelligence.
A person’s perceptions are never 360 degrees. Much like our vision, there is a limit to what we can see at any given time. Despite what our third grade teachers told us, eyes do not exist in the back of our heads. So a turn in any direction could cause one to miss something of importance. A person’s perceptions, (and the human mind is comprised of perceptions), are partial, limited, and fragmented making it impossible to have an accurate and comprehensive picture of all aspects of business or life.
To compound the problem, perceptions are selective. As humans, we seek to confirm what we already believe is true. Psychologists call this confirmation bias. We find evidence to support what we want to believe and ignore the evidence to the contrary. This makes the view of our current circumstance distorted and even the knowledge that this distortion exists will not mitigate its impact.
Having successfully raised three sons, I have a list of the 10 things parents should know about raising teenagers. This is number 8; If you find yourself uttering the words, “My son/daughter would never do X”, drop everything and run home because it is a sure sign the kids are doing exactly that! What have you convinced yourself is not true about your clients and advisory firm?
A fresh perspective can only come from an outsider, one who does not have our bias and can see things on the “other side of the moon”—those things not in our purview. Advisors have numerous professionals and organizations they can go to for help: coaches, consultants, workshops, small business advisors, conferences, and custodians to name a few. If you think you don’t need help, drop everything and run to the nearest consultant because it’s a sure sign that is exactly what you need.
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