November 9, 2011

What Does the Future Hold for Your RIA?

The answer could be found in your firm's vision statement.

A vision statement is a clear depiction of what your firm could look like at some point in the future.  While admittedly one of the more challenging components of the strategic planning process, establishing a strategic vision for your advisory firm is an incredibly powerful and rewarding exercise. Once appropriately deployed, your vision statement will become an inspiring, motivating and unifying force within your team.  Your vision statement should be:


The primary purpose of a vision statement is to paint a picture of your firm at some point in the future.  To make it easier for your team to "see" this future state and the success that will accompany it, it helps to be as descriptive as possible.  


Vision statements should be as specific as possible and should include metrics that fit your business model and strategy.  For example, striving to reach a certain number of advisory relationships may not make sense since this could result in too much focus on maximizing your client list without consideration for profitability. However, using a combination of metrics, like "number of clients" and "profit margin" you can produce a more balanced focus.


No one time frame works for all firms. If you are a start-up, it may make sense to focus on a shorter time frame (three years). If you are a more established firm, five to ten years would work. Time frames that are too short will result in too much focus on the tactical. If your time frame is too long, you may lose some motivational benefits because team members may have difficulty envisioning themselves as part of a future state that is too far out.

Achievable (yet bold!)

If the unveiling of your vision statement is met with wide eyes and a few gasps, then you probably did a great job.  A vision statement should be audacious.  Be bold, but strike a balance--your vision should also be achievable with either your current or planned resources.

Here's an example of an effective RIA vision statement:

As the primary trusted advisor for each of our clients, in the next five years, we will become the dominant advisory firm in our region.  We will double our advisory assets while maintaining a profit margin of 30%. 

The process of developing a vision statement for your RIA will be well worth the investment of time.  A crisp vision statement that is successfully embraced by your team will be:

Inspirational  It will show your team what they are working towards, not just what they are working on.

Motivational  It will produce a vivid definition of success that serves as a motivating force behind day-to-day efforts.

Unifying  A shared vision will contribute to teamwork and cohesion among your team, both of which are always important and particularly so when your path to success becomes unclear or rocky.


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