We are going to explore a fascinating concept that has been the subject of many of my conversations with financial advisors, planners, and stakeholders in our profession – the Financial Advisor Maturity Curve. This concept I developed, provides a roadmap for understanding the progression of a financial advisor’s focus, skills, and capabilities over time on the one hand, and the growth of their business or practice at the same time on the other hand. This is a work in progress and by no means or stretch of the imagination a complete or final model.

The Financial Advisor Maturity Curve: A Comprehensive Overview

The Financial Advisor Maturity Curve is a model that outlines four distinct phases in a financial advisor’s career. It’s not a straight line or a simple continuum, but rather a journey that ebbs and flows, with ups and downs. Each phase represents a shift in focus and a progression in skills and capabilities. It is even possible to move backwards at times.

It is in most cases not possible to skip a phase as well. The reason is that each phase builds on the previous phase. It does not replace it.

Phase One: The Starting Point – A Product Focus

The journey of most financial advisors begins in a commission-only business proposition, typically within a product provider space. This phase is all about survival – making it to the next month, meeting targets, and selling products. The focus here is on product knowledge and client acquisition. It’s a tough phase, but it’s a necessary, and most often the only starting point for advisors.

In this phase, advisors are often grappling with the challenges of finding the right product suite for their clients, acquiring new clients, and staying up to date with product knowledge. It’s a phase that requires tenacity, resilience, and a strong drive to succeed.

Phase Two: Building Knowledge and Shifting to a Technical Focus

As advisors gain experience and start to question the product-focused approach, they move into phase two. This phase is about becoming aware of the broader aspects of financial planning and building technical knowledge. Advisors often pursue further education, such as a postgraduate degree in financial planning and the CERTIFIED FINANCIAL PLANNER® designation. The focus shifts from selling products to understanding the technical aspects of financial planning.

In this phase, advisors face the challenge of finding the time to study and apply new knowledge. They also need to learn how to marry their new knowledge with practical application. This phase is about growth and expansion, and it requires a commitment to continuous learning and development.

Phase Three: Client Retention and Broadening Services

Once advisors have built a solid income base and honed their technical skills, they move into phase three. This phase is about client retention and broadening services. Advisors start to focus on maintaining their client base and enhancing their value proposition. They may also start to consider introducing fees into their business model offering a hybrid solution to clients when it comes to paying for advice and services.

In this phase, advisors face the challenge of mastering client retention and introducing new services at the same time. They also need to manage the business side of their practice more effectively. This phase requires a shift in focus from client acquisition to client retention, and it requires advisors to be adaptable and flexible.

Phase Four: Expanding the Value Proposition

The final phase of the Financial Advisor Maturity Curve is about expanding the value proposition. Advisors in this phase have built a solid and predictable income base and, provided that they manage their finances well, have the time and resources to offer additional services, such as coaching and guiding clients through financial transitions. They can focus on the human side of financial planning and truly become a guide for their clients on their financial journey.

In this phase, advisors face the challenge of justifying fees for new services and demonstrating their expanded value to clients. They also need to ensure that they have a diversified income stream that will continue to grow. This phase requires a high level of interpersonal skills, a deep understanding of the human side of financial planning, and a commitment to continuous learning and development.

Challenges and Possible Solutions

Each phase of the Financial Advisor Maturity Curve presents its own set of challenges. However, one of the key solutions to these challenges is continuous learning. Regardless of the phase you’re in, it’s crucial to stay up to date with changes in the industry, implement technology, and adapt your business model as your focus evolves.

In the first phase, the challenge is primarily about client acquisition and product knowledge. To overcome this, advisors need to invest time in learning about the products they are selling and developing effective strategies for client acquisition. This might involve attending industry events, networking, and leveraging social media platforms to reach potential clients.

In the second phase, the challenge is finding the time to study and apply new knowledge. Advisors can overcome this by setting aside dedicated time each week for professional development. This could involve taking online courses, reading industry publications, or attending workshops and seminars.

In the third phase, the challenge is mastering client retention and introducing new services. Advisors can overcome this by developing strong relationships with their clients and regularly checking in to ensure their needs are being met. They can also consider offering new services that align with their clients’ needs and goals.

In the fourth phase, the challenge is justifying fees for new services and demonstrating their value to clients. Advisors can overcome this by clearly communicating the benefits of their services and how they can help clients achieve their financial goals. They can also consider offering a free trial or discounted rate for new services to encourage clients to try them out.

Mind Where You Are

The new shiny ball syndrome is something we are all seduced by. And it is no different when it comes to the phases in the Financial Advisor Maturity Curve. It is very well possible to incorporate some of the elements of later phases into earlier phases, but it would in many cases not be sustainable to focus on a phase that we are not financially ready for.

What am I talking about?

It is apparent from every conversation I had with advisors who have implemented coaching, transition planning, and the like into their value proposition, that the way clients pay for these is still through (mainly) assets under management. Very few clients have the ability or the inclination to pay fees for these valuable services.

As you build your business and your ongoing revenue, you will be able to introduce more valuable services into your proposition and through that shift your focus from acquisition to serving.

This also prompts me to point out that if you find yourself in the latter phases of the curve, be mindful of this and where others are finding themselves. Comparing ourselves to others and judging them by that is surely a road we should not go down. Rather lead the way with a shining light!

Conclusion

The Financial Advisor Maturity Curve is not a one-size-fits-all model, but rather a framework for understanding the progression of a financial advisor’s career. It’s a journey that requires continuous learning, adaptation, and a shift in focus. However, this on its own is not enough!

Without building a sustainable practice or business that provides a steady profitable revenue stream, it will be very hard to shift focus from one phase to another. Keep this in mind and be intentional and skilled at building a legendary practice.

Watch me discuss the Financial Advisor Maturity Curve on PROpulsion LIVE.

Written by Francois du Toit

Francois founded PROpulsion, a thriving community for financial planners focused on helping them belong, grow and thrive. He hosts the PROpulsion LIVE podcast with more than 220 episodes and counting, sharing his 2.5 decades of experience and engaging with guests to inspire and inform.

He is a tech enthusiast with hands-on experience in various IT platforms, particularly in the advice space. Always learning, experimenting, and embracing new technology to maximize its potential in their business.

He regularly speaks at conferences, both locally and internationally, and is often asked to moderate panels or host events.