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Building the Business 101: An Advisor Turns Coach

Diane MacPhee's career change has been positive for both her and her clients.

Veena A. Kutler and Annette F. Simon, 01/24/2008

This monthly series of articles describes the many steps and occasional missteps we have taken in building our financial advisory business, Garnet Group LLC. Currently, Garnet has eight staff members, more than 90 clients, more than $300 million in client net worth under advisement, and offices in Bethesda, Md., and Boston. Veena Kutler, CFA, and Annette Simon, CFP, are the managing principals in the Garnet office in Bethesda.

As our regular readers know, we are true believers in work and life balance, and while running our business we have sought efficient ways to fulfill both life and work ambitions. Over the years we have met people who are particularly good at achieving this goal. On occasion throughout 2008, we will devote our monthly column to colleagues who are standouts in our industry and offer unique viewpoints.

Diane MacPhee is a colorful and energetic planner we have known for years through our involvement with the National Association of Personal Financial Planners. After 16 years as a solo practitioner, Diane decided to make a transition from the advisory business to launch a new career as coaching other advisors. Coaching has been gaining popularity in the financial services field in recent years--there seems to be a coaching presentation at almost every conference we attend. But few of the entrants in the field have MacPhee's strong combination of coaching expertise and in-the-trenches advisory experience. Intrigued by this combination of skills, we caught up with her to learn how her new business was going.

Diane, tell us about your journey from financial advisor to coach and consultant.
I began my planning practice in 1989 as a solo practitioner and from the beginning loved my work and my clients. However, in 2005 I knew I needed a change. I felt I was bursting at the seams. I was very busy with my existing clients and new clients were coming in the door, and it was stressful to handle it all on my own, even with the help of my excellent office manager. An additional challenge was my decision to live near the New Jersey shore and so now my residence was two hours away from my office. I decided to take some time, examine what my passions truly were and see what I wanted to do with my life. If I stayed in planning, I knew I had to either merge with another planner or hire more employees and ramp up my practice. Neither option was that attractive to me.

As I thought about what really made me happy, I realized it was the work I had been doing as a volunteer for NAPFA. From 1999 on, I had been traveling around the country on NAPFA's behalf running full-day workshops to help people (primarily brokers) make the transition to fee-only planning. I loved talking to the attendees, and helping planners to work on the business development aspect of planning practices. I decided then and there to refocus my career and work with advisors to help them optimize their practices.

Was that transition a quick one?
It took well over a year. I approached my transition methodically. My first step was to learn how best to sell my planning practice. After doing research and speaking to many colleagues I decided to list my practice on FPtransitions.com--David Grau's Web site that  matches buyers and sellers of planning practices. Within 24 hours of my initial listing I had received 52 inquiries for my practice! After some time winnowing down the offers and evaluating the buyers I found the best fit for my clients and me, and sold my practice to a fee-only NAPFA planner. I then stayed on for a year to help my clients make the transition to the buyer. I also spent time improving my coaching skills by training through the CoachU program.

By mid-2007, I was devoting my energies full-time to my coaching practice. Because of the many people I knew and because I had been working with transitioning planners for years I never felt like a beginner, and was able to hit the ground running with clients.

Give us a feel for how you work with your advisor clients. What is your fee-structure, and length and scope of engagement? Do you typically work by phone or in-person?
I have a standard coaching engagement that runs for six months and costs $3,000. This involves a 45-minute session by phone every two weeks. Prior to starting I request that my clients fill out a questionnaire that helps me pinpoint their goals and objectives. I also send out agendas, to-do lists and other information to my clients during the engagement. I've found that six months is not enough for many planners and most of my clients have chosen to renew at the end of our engagement. I do offer some in-person sessions at an extra charge.

What are the biggest issues/ hurdles you see advisors struggling with?
My clients are motivated, successful people who generally have a good vision but need help reaching it. My clients set the agenda and my goal is to help them accomplish it.

When I started off, I thought I'd be getting brand-new planners as clients. In fact, most of my clients are experienced and have been in business for some years. The two important things that I work on with them are time management and personal fitness. I find that many planners are so busy that they work 10-12 hours a day on average and still feel that they are not accomplishing their goals. They work in a reactive way, dealing with staff, issues and clients as problems come up, rather than dealing with them in a proactive, scheduled way. They often don't make time for themselves. I ask them to look ahead six months on their calendar and then to schedule staff and client time in advance of reaching a crisis. I address personal health by having clients schedule time off as if it was a critical "must-do" appointment--which in my view it is! Now they have time to exercise and time to get away and think about the business from somewhere other than the office.PAGEBREAK

One of my favorite terms is "EPN"--eliminate piles now-- and I encourage clients to deal with their clutter before it overwhelms them. One of my clients actually schedules "EPN" time on his calendar and works on that exclusively in that time slot. I also help with outsourcing decisions. Outsourcing is an important tool, but clients need to understand where their business is going long-term before they can outsource parts of it. What parts of the puzzle do you like to solve yourself? Once you know the answer, we can see what's left over that can be outsourced.

My role is to hold my clients accountable for the goals and objectives that they set for themselves. But because I have had the same challenges myself, I find that it's easier for me to help my clients find their way along the path.

Any other challenges that come up frequently?
We often assume that advisors have great interpersonal skills because they are in a "people" business. But I have found that's not always the case. Some advisors are good with numbers but find it a challenge to deal with staff and with other professionals. Others have a hard time picking up the phone to call a client or prospective client. It's hard to maintain a successful business or build one if you have anxieties when interacting with others. I first get my clients to acknowledge the problem and then help them find practical solutions that will work for them. Role-play is one method of coaching that is effective here.

How has your lifestyle changed as a result of your business transition?
I feel re-energized and more productive now. I love the work and the feel of a new start within an industry where I have long-term roots. I am building out office space in my home and look forward to working there and also traveling for speaking engagements and workshops. I run four times a week and work out three times a week. I've also picked up a new hobby--golf--which has become a new passion for me.

What is the best way for potential clients to reach you?
My Web site is currently under construction and should be completed by mid-February. In the meantime, e-mail to diane@dmacfin.com is the best way to reach me.

Conclusion
Have you used the services of a coach? We have, and found it a valuable tool in increasing our productivity. Have you had any memorable experiences in the coaching and/or mentoring arena that you want to share with us? E-mail us at dc@garnetgroup.com and let us know. Please remember that all comments will be "on-record" unless you request otherwise.

In next month's column we will discuss working with the media.

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