by Tony Vidler       

A financial advisory practice may be doing well and making money without knowing whether it is winning or losing compared to the rest of the market.  You can be profitable, but still lagging the level of profitability of the bulk of the market.  Or you could be borderline profitable but well ahead of the majority.  You often just can’t tell if your practice is winning.

Imagine if you were an ambitious athlete who worked hard, trained well and was in peak fitness, but never actually competed against another athlete.  In fact, you never even competed against the clock.  You didn’t time yourself for anything….didn’t keep any records of personal bests….never actually entered a competition against other athletes….in fact all you did was work and train hard. By yourself.  No concept as to whether you are doing better or worse than previously….no idea if you are the best in the world or someone that should take up a different pastime.

Imagine how demoralising it would eventually become.  What is the point of it all?

Many financial advisers find themselves in that position throughout their careers.  They work hard, and continue to train or learn more, and continue to invest in building capacity….but they have no idea how they are actually doing in the competition called “business”. Perhaps that is why things like “sales competitions” and “incentives” have motivated many in the past – because it is a simple way of measuring an aspect of performance against their peers and competitors. Such competitions and incentives are often imperfect and very one-dimensional measures, but they are at least A form of measurement.

You need to know what others like you are doing…how they are performing….how you measure up against the group.  One of the best things an adviser can do is become part of a benchmarking group or study (if available), and in this video we discuss the benefits of doing so.  There is also a great pointer to a form of benchmarking that you can use if you don’t have other choices….

…watch the video to learn more…

You might also be interested in this related article:

The 3 Main Considerations In Practice Development