The Solo Advisor may appear to be the lone wolf of the financial services industry. As we discussed in Part 1 of this series, the rise in competition presented by multi-advisor teams, the importance of service differentiators, and the customer perception of succession planning are all posing a threat to the Solo Advisor’s ability to achieve. It is important not to mistake adversity for failure, however. The Solo Advisor can be successful in the financial services industry of today by employing a few key strategies, among them redefining business operations, carving out a client niche, and embracing new technology.

When it comes to business operations, the imperative for the Solo Advisor is mindset. We often hear from Solo Advisors who complain that their business ‘isn’t scaling’. In truth, this is usually code for ‘my business is getting bigger but this isn’t getting any easier’. To understand this sentiment, it is important to understand the real struggle of the Solo Advisor. For most Solo Advisors, they have built a firm that is comprised of a diverse set of clients, each with different needs, different plans, and different goals. Imagine crossing the threshold of 300 – 400 clients and having to manage 1000 – 1800 accounts separately using different products and services, paperwork, client calls, etc. This lack of efficiency would be, and is for most Solo Advisors, overwhelming. It is impossible to scale your business and grow if you are constantly treading water and trying to stay afloat with the current workload. What often follows is the Solo Advisor will throw money at the problem and hire more staff, all in an attempt to better manage their business. The end result; though, is far from the desired outcome as with more staff to manage and more expense, the Solo Advisor slips further down the rabbit hole and the business inefficiencies only become magnified.

So where does the Solo Advisor find the panacea for the problem? By setting a firm definition of the client target market and outlining a consistent product and service solution that will meet the needs of those clients, the Solo Advisor has the ability to stabilize what they have now and open the door of opportunity for growth in the future. Every Solo Advisor needs to take a hard look at their business plan with an eye toward understanding the client categories which they can best serve, which product and services meet the goals of those clients, and how to best create a replicable solution that allows for efficient client and time management. With those key areas addressed, the Solo Advisor, by maintaining clear vision of their client/service offering and simply duplicating it, will then have the ability to grow their practice revenue exponentially while simultaneously maintaining a cohesive – and successful – business structure.

It’s important to recognize, in defining the client target market for the Solo Advisor, that a further challenge remains in the marketing aspect of their business strategy. For the Solo Advisor, reaching new clients and differentiating themselves can prove daunting when you consider the competitive playing field. Solo Advisors are facing off against over 80,000 other Certified Financial Planners, independent advisors, RIA’s, along with every advisor at major broker dealer who has thrown their hat into the financial planning ring. Consider that many of these firms are 100 to even 1,000 times larger than a Solo Advisory firm and the idea of a Solo Advisor out-marketing the competition becomes even more difficult.

When it comes to addressing the marketing problem, it is vital that the Solo Advisor not look to external factors but look to themselves in order to find the solution. While it is true that Solo Advisors can often go deeper in understanding a client’s needs than a larger practice might want, Solo Advisors have the ability to be more specialized and showcase relevant expertise, the fact is most don’t. Many Solo Advisors choose to operate as generalists, which is unfortunate as they are bypassing the opportunities presented by their greatest strength which is one area of expertise. It comes down to focus. By zeroing in on the specialized niche outlined in their refined business plan and translating that into an understandable marketing message, the Solo Advisor has the ability to impact their bottom line as well as their long-term growth in an immensely positive way.

Once business operations and client relationships are on solid footing, it becomes imperative for the Solo Advisor to explore technological resources, both existing and emerging. Technology in financial services has proven to be a great equalizer. The comprehensive and affordable technology platforms available today better enable the Solo Advisor to compete on par with firms larger than themselves. Technology essentials for any Solo Advisor include a solid CRM, an email marketing system, and a website builder. These technologies can be integrated by working with a specialized consultant in each category, or by partnering with a comprehensive technology firm offering one-stop shopping for all technology needs. By embracing technology in this way, the competitive position of the Solo Advisor if further stabilized and the ability to achieve even greater business efficiencies, streamline costs, better engage customers, and improve overall business management becomes more and more the reality.

The bottom line is the Solo Advisor is far from extinction. While the financial services industry may be a jungle, difficult to navigate and full of predators, the opportunity remains for the Solo Advisor to survive and thrive. It comes down to how willing the Solo Advisor is to focus, do the hard work of redefining their business, and capitalize on the technologies and resources available to maximize efficiency and ultimately revenue. There are many benefits to being a lone wolf and by recognizing them the Solo Advisor has the chance to be a part of the evolution that is financial services.