Bowen, founder and CEO of CEG Worldwide, previously worked as a financial advisor and firm executive. He served successively as CEO of Reinhardt Werba Bowen Advisory Services and Assante Capital Management.

Formal Wear

In these challenging times, it's more important than ever for you to have a clear road map for your business, specific professional objectives and the commitment to pursuing your goals. In short, you need a business plan.

CEG Worldwide's research confirms the important role of a business plan in advisors' success. While more than half (51.4%) of wealth managers (who earn $881,000 on average) have formal business plans, investment generalists (average income: $279,000) fare even worse as just 16.3% of them have a business plan.

This gap shouldn't come as a surprise. Successful people are intentional about their actions. A well-crafted business plan can ensure that your actions are focused on clear aims. If you plan for success, you dramatically increase the chance to realize that success, particularly in today's volatile markets, where four out of five affluent investors are considering switching advisors.

Streamlining the Plan

Most advisors never develop business plans of any kind because they get too caught up in dealing with day-to-day responsibilities. They respond to events that come at them, like the last several months of volatility, instead of proactively moving their businesses in a chosen direction.

That's a big mistake. By formally scheduling some time to be introspective about your business and to refine a plan for realizing your vision, you will be much more effective at creating a simple and elegant wealth management business.

However, that doesn't mean you need to take the traditional approach to business planning by creating a standard 30-page document. Quite the opposite. Creating a formal, traditional business plan is not a productive use of your limited time. That's especially true today: Advisors who act now and respond to the current crisis instead of waiting for the markets to get better will find themselves in a much stronger position down the road.

Instead, consider a nontraditional, streamlined business plan centered around what is important to you and what you want to achieve. Developing a streamlined business plan involves just five steps:

1. Be clear about your purpose. The clear vision you create for your firm is the bedrock of your business plan. It will guide all the decisions you make about the business, where you want to take it and how you want to get it there.

Getting to the heart of "why" is what having this clarity of purpose is all about. Ask yourself some key questions: Why are you in this business? What is truly important about this business to you? Ask yourself "why" five times to get past the simple and easy answers that crop up initially—such as making money. Financial success only scratches the surface, even among most money-driven personalities.

You'll want to go deeper in your thinking until you get to a clear and compelling purpose-one that will call out to you and your team of employees, live in your memory and compel you to take the right actions to achieve what is most important to you. Knowing what you want to offer your clients and staff, the impact that you want to have both professionally and personally, and what you feel most passionately about in work and in life can give you a deep clarity of purpose and keep you excited to lead a team on those days when you are feeling overwhelmed, overworked and disheartened.

2. Develop a clear and compelling value proposition. Understand—and be able to convey—how you help clients make smart decisions about their money, your expertise within your chosen market and why those investors want to work with you. Don't hesitate to involve your peers, key employees and strategic partners in this process. No great businesses have ever been created by one individual. Putting your plan in writing and having others who understand our industry review it can uncover blind spots. Encourage them to pick it apart and find things that don't make sense. You're not looking for compliments, but rather for breaks in logic or ways in which you can better serve clients so that the firm and your clients can be more successful.

Use this value proposition to focus your team. Like you, your team needs to understand the niche they serve and the unique value they can bring to that group of investors. This helps ensure that there is no misunderstanding about what you do and whom you do it for.

Likewise, a strong value proposition reinforces to your team that they can't be all things to all people and that they shouldn't try. Instead, they should focus on the right clients for the firm and for their skills. Armed with a clear value proposition, you can develop short-, medium- and long-range goals, the strategies for achieving them and the metrics you need to track and monitor your progress.

3. Get commitment. It's one thing getting your team to understand the firm's goals and direction and another thing getting them to commit to taking the firm in that direction. Knowledge without the motivation to act won't do you much good. So you must work with your team to inspire them toward the desired results. To gain buy-in, you must find ways to inspire your team, build trust and embed the right values.

There is simply no better way to accomplish that than by "walking the talk." Hold yourself to the same high standards that you have set for your team and consistently demonstrate your passion for your business, your clients and your team. If you treat your career as "just a job," that attitude will rub off on your people, and you will find it much harder to succeed. But if you consistently go the extra mile through your words and deeds, your team will come to see the extra mile as the norm.

Another way is to treat your team members with dignity and respect. You show your respect by keeping your promises—doing what you say you'll do, when you say you'll do it. Be willing to give credit where it is deserved. Once you acknowledge the good work of others, you empower them to do even more on your behalf—freeing up more of your time in the process. Acknowledgment makes your team happier, raises members' confidence and motivates them to work harder.

4. Execute. This is the step that advisors often never reach, even though it's clearly a crucial one. As the futurist Joel Barker says, "Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world."

The upshot: You can't leave execution to chance, hoping it will happen. Deadlines must be met, goals must be achieved and you and your team must hold one another accountable for turning vision into reality. That means bringing together the right team members (whether in-house or via a network of outside experts), exciting them about your vision and goals, and creating and delivering compelling value to your clients.

5. Maintain flexibility. Recognize that there is no one right way to do business. What works today may not work tomorrow or get the same results. Success requires constant innovation—finding a better way is how good advisors become great and great advisors become world class.

When you create your business plan, everything you want to accomplish happens in your mind, greatly increasing the probability that it will happen in reality. So remember to stay focused on what counts. As you reach toward higher levels of success, more opportunities will present themselves and more investors will want to work with you.

Don't ignore those new opportunities, but also don't be tempted to constantly change your plan based on whatever comes across your radar screen. Always think back to your vision, your purpose and the specific value you bring. If something new doesn't fit your plan, don't do it. Be consistent and specific-strategic, not tactical. By staying on track, working the plan and fine-tuning with the new feedback the market will provide, you will be well on your way to creating an exceptional wealth management practice.

Reprinted from: Financial Planning