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Mitch Anthony's Intuitive Advisor

The Practice Doctor is IN

Practice Management and the Art of the Deal

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

Al Depman photoSince Donald Trump is making a go at the presidency, I thought it might be fun to pull out the old notes taken from my initial encounter with his 1987 book, The Art of the Deal. What struck me as valuable insight back then? Do his key principles still apply to growing a financial services practice nearly 30 years later?

In doing so, I was careful to not allow the noise, rhetoric, and evolution of Trump the political persona in 2016 influence me. My goal was to simply focus on the core ideas he promulgated when he was a breakaway entrepreneur in his early 40s.

The copy of the book is long gone, but my yellow pad scribbling recalls the reason I bought it. Common Sense, the book by A. L. Williams, was creating havoc with the major life insurers with its "buy term and invest the difference" mantra and hostility to whole life insurance. I was with Prudential at the time, looking for ammunition to fight these raiders who were coercing our clients to liquidate their cash value life policies. The proceeds would then be used to buy A.L. Williams' proprietary mutual funds and term insurance. It was the dawn of the variable and universal life insurance products that eventually would engulf the life insurance industry and create the omnipotent compliance departments.

So there I was battling away at the A. L. Williams guerilla warfare tactics, searching popular business books and magazines for some principles to guide me in building my young financial services practice. Here's what I took away from The Art of the Deal:

  • Believe in what you do and stand up for it, or others will rumble over you to get what they believe in. This was a particularly potent point—did we ever really question the concept of whole life and the ultra-conservative "General Accounts" being used by the life insurance giants? We (the field sales force) started questioning this core concept, became uncertain, waffled, and watched as the zealots ate our lunch.
  • Learn from your past in planning for your future. We were learning, all right. We put enormous pressure on our companies to develop similar term and mutual fund alternatives to offer our clients. Many disillusioned sales agents defected and went to work for the more nimble mutual fund houses that were springing up.
  • Delegate the grunt work. This is an old chestnut in practice management. But you can't say it enough. Too many advisors cling to the "I can do it better and faster myself" philosophy. This immersion in minutiae will ultimately bog down the ability to think creatively about challenging the bigger problems we face.
  • Don't be a micro-manager looking over shoulders or an abdicator-manager walking away and assuming a job will get done. When you delegate, let the person do the job but stay in touch on a scheduled basis to monitor progress.
  • Find talented people, develop their loyalty, and stick with them through thick and thin. During the A. L. Williams crisis we were finding out just how loyal the talented people were. Many of the big insurers had attracted talent but were unable to retain them. I learned that having a strongly articulated value proposition was vital in keeping clients and team members.
  • When the time is right, move quickly and decisively. When your livelihood is being threatened, action is needed. We in the field knew this and were unable to respond to the A. L. Williams threat and still be loyal to the parent company. This was the Achilles Heel that eventually brought the major insurers to their knees.
  • Next to loyalty, toughness is the most important trait to develop. This is a good Trump lesson. However, when loyalty is strained and the company doesn't provide the appropriate weapons with which to be tough, the situation deteriorates quickly. This was the case as the big insurers were being roused from complacency: the field force was being tough and loyal but losing battles and the war.
  • Under-promise and over-deliver. This is another old chestnut of practical wisdom—one that is still true today and an amazingly effective strategy.

Those were the key points I took away from The Art of the Deal. A few years later, my all-time favorite classic, The Seven Habits of Highly Effective People, by Stephen Covey would be published (1990). Covey's principles still inform my consultations today. But looking back on Trump's points, he had enough to help me through the A. L. Williams crisis, and they resonate as management principles even today.

The Doctor is OUT


© 2016 Al Depman

Al Depman, CLU, ChFC, CMFC, BH, a.k.a. "The Practice Doctor", is MitchAnthony.com's Business Practice Consultant, and contributor to "The Wall Street Journal." He is the creator of "The Practice Management Assessment" tool, the key component of The Business Practice Check-Up™, has authored numerous articles in professional publications on practice management, and is the 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 al@mitchanthony.com.


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