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Mitch Anthony's Intuitive Advisor

The Practice Doctor is IN

'Tis the Season...

by Al Depman, CLU, ChFC, CMFC, BH
Practice Management Consultant

Al Depman photo‘Tis the time for the annual planning process to plot out how exactly you will reach your practice's goals in 2015. You may already have a tried and true template for accomplishing this task (or have one imposed on you from above). Permit me to share the tool that I use in my consultations—consider it my holiday gift to you. Hopefully it will provide a different perspective.

The first step is to establish a gross income to shoot for. Let's say it's $250,000. We then break down your practice's income into four streams:

  1. Existing Clients: recurring revenue
  2. Existing Clients: new business and converting opportunities
  3. New Clients: general and specific sources
  4. Other Compensation

In this example, if your recurring revenue stream is $125,000, 50 percent of your goal is in the bag if you retain your current clients and their assets.

Of the remaining $125,000, how much will come from new business generated by your existing clientele? In previous columns I have shown how to monitor and cultivate this income stream. If you can see another $50,000 of income from your current clients, then your income need is $75,000. This has to come from attracting new clients or other sources.

Now the discussion revolves around how efficient your new client acquisition system is: referrals, worksite marketing, seminars, and the like. I have a list of all of the possibilities from which to choose your approach to finding the remaining $75,000 income to meet the $250,000 goal.

Going through the following checklist and putting numbers to each line should be helpful in income planning for you and your team.

Income Planning Components for 2015

  1. Existing Clients (Recurring revenue)
    • Assets Under Management
    • Trail commissions (MF, annuity)
    • Recurring plan fees/retainers
    • Group business
    • Insurance renewals
  2. Existing Clients (New business and converting opportunities)
    • Additional assets to obtain
    • Additional products and services ("cross-sell")
    • Update or replace existing underperforming products
    • Update existing strategies necessitated by tax and legal changes
    • Transition to fee-based financial planning or other platform for select clients
    • Legacy planning (involving the next generation)
    • Company benefits replaced or enhanced
  3. New Clients
    • Referrals from centers of influence
    • Referrals from clients
    • Natural markets (advisor's and team's)
    • Public forums:
      • Seminars, "bring a friend" events
      • Trade shows, professional workshops
      • Speaking/Presentations
    • Networking: face-to-face/online
    • Worksite marketing
    • Orphans/other advisor "C" clients
    • Observation/face calling/walk-in, call-in
    • Lists for prompting, feeding and colder marketing:
      • Lists: specific names +/or by targeted market type
        • demographic (e.g. pre-retirees, established families, ages 55–65)
        • professions (e.g. physicians, business owners, architects, construction)
        • avocation (e.g. golfers, tennis players)
        • affiliation (e.g. alumni, Rotary, clubs)
    • Prospect Inventory/People who said "call back" later
    • Other sources?
  4. Other Compensation
    • Joint work and other commissions/fee sharing
    • Bonuses
    • Recognition
    • Over-rides
    • Other payouts
    • Stipends for training or other services
    • 1099 work
    • Royalties, speaking, etc.


Existing Clients: recurring revenue +
Existing Clients: converting opportunities +
New Clients +
Other Compensation +

= Total income 2015

Hopefully, this process will bring some additional clarity to your 2015 planning. Here's to a great year!

The Doctor is OUT

© 2014 Al Depman

Al Depman, CLU, ChFC, CMFC, BH, a.k.a. "The Practice Doctor", is's Business Practice Consultant, and contributor to "The Wall Street Journal." He is the creator of "The Practice Management Assessment" tool and materials and has authored numerous articles in professional publications on practice management, and author of the book, How to Build Your Financial Advisory Business and Sell It at a Profit, available from McGraw Hill. Al combined his Liberal Arts studies with 10 years of management experience with McDonald's Corporation to enter the financial services world 25 years ago. Since then, Al has evolved from an MDRT-level sales rep into a full-time consultant specializing in helping others engineer their business practices to the next level. Contact him at

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