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The Gift of Growth

About ten years ago, I went for lunch with a great financial adviser friend of mine, an ‘unofficial mentor’ who I hugely respected and still do now. He’d also invited a friend of his to join us. This friend was more successful than both of us, and he was on the cusp of retirement (selling his business). Over lunch, he shared stories, war wounds, and insights gathered from decades in the profession.

But there was one line that stuck in my mind ever since. He looked at me and said, “Andy, the key to being successful in this business… is being in this business.” What he meant, quite simply, was that the longer you stay in this game, the more your business will grow. Because financial advice, when done well, is a compounding business.

Fast forward ten years, and I’ve seen it with my own eyes. In fact, over the past five years, my advice business has doubled in size. That’s not magic, it’s maths, the Rule of 72. Divide 72 by your annual growth rate, and you’ll find how long it takes to double. At 15% per year, your firm should double every 5 years (4.8 for the eagle-eyed).

If you’re not hitting that 15% compound growth rate, you’re not taking full advantage of the gift we’ve been given in this profession. Because, unlike most businesses, financial advice benefits from three powerful tailwinds:

New clients and new assets – The obvious one. More clients equal more assets, revenue, and planning work.
Ongoing contributions – These regular inflows from existing clients build over time. The more we encourage meaningful investing, the more our businesses build and the wealth we create for our client families.
Market returns – We grow as our clients grow. The market’s compounding effect lifts portfolios and our turnover without any extra effort other than correct asset allocation.

Yes, we have headwinds. Clients do occasionally leave, I’ve lost two over the past 15 years, both left with clear financial plans, portfolios hugely in the green BUT they both didn’t value what I did over the fees they were paying. You can’t win ‘em all, NEXT!

Withdrawals happen, such as one-offs and retirement spending. But these are the exception, not the rule. In the big picture, the structure of our business is designed for long-term, compounding growth. Hence, focusing on younger clients (40s, 50s) who are aggressively investing.

And the best part? This growth happens because we’re doing good work. When we help our clients build wealth, we build our own. Wealth creates freedom. Freedom creates opportunity. It’s a virtuous cycle.

As Nick Murray calls it, this is the noble profession. We deliver peace of mind, purpose, and prosperity. And if we stay in the game, keep serving, and stay focused, the results will speak for themselves.

The key to being successful in this business… is being in this business. That’s the gift. Don’t waste it.

📰 Articles & Blogs

How Financial Advisors Can Say "I Don’t Know" Confidently [15 minutes]. Turn those moments into opportunities for trust and growth.

Life Expectancy: The (F)Law of Averages [6 minutes]. The law of averages might not be as straightforward as you think.

Coloring Within the Lines [15 minutes]. How to provide the structure and clarity to reduce client anxiety.

What's Beneath the Surface: Reflective Listening in Money Conversations [4 minutes]. A listening skill that will improve your relationship with your partner and your clients.

The Emotional and Time Value of Advice [15 minutes]. Two underappreciated benefits of advice.

🎧 Podcasts

TRAP 76 - Drawdown Decisions [88 minutes]. The TRAP pack discuss the FCA Retirement Income Advice Review.

Is There A Future Of Financial Planning In The AI Era? [42 minutes]. Michael Kitces and Carl Richards explore how AI is set to transform the role of the adviser.

At Humans Under Management London 2017, Graham Cox presented on the crucial topic of changing client mindsets. As an experienced speaker, he shares valuable insights into the psychological aspects of client interactions.