Horizon Advisor Network

If there’s one thing you can bet money on in this business, it is that we will never be at a shortage of acronyms as part of our industry jargon.

I mean, we are all seriously counting on the BD/RIA to offer us PAM/PRIME/mAA/xMA platforms where they provide MF/ETF’s or SMA’s to offer B2C to our clients at certain BPS, maybe even in an IRA if it’s okay by the DOL, after the approval of FINRA or the SEC, and processed through the OSJ, who just by chance might also be a CFP and AIF (not an Account Information Form, but an Accredited Investment Fiduciary just to be clear!). In our work, we might deal with CMO’s, the FDIC, CAGR, YTM, FIFO/LIFO, QDRO’s, LLC’s, S-Corps, and on and on. Are you an IAR or a RR or both? And we better watch our KPI’s to make sure our P&L is okay with our CPA, who will not want you to run afoul of the IRS!

When I just re-read that, I sort of wish George Carlin was still alive to do a skit on it at our next national conference. One can wish. If you have no idea who George Carlin is, Google my favorite of his about the difference between baseball and football! 😊

But one (of many!) that I left out is the TAMP – or as we know it, the Turnkey Asset Management Program. You know these guys…SEI, Asset Mark, Lockwood back in the day. Whether you use them in your practice or not, you know about them because they offer ways to simplify some of the complexities you have to deal with as an independent advisor. But I’m not talking about that TAMP…

Instead, I want to talk about a different kind of TAMP that will affect every single one of our practices in a multitude of ways for the remainder of our careers. And depending on how you use this one, it could be the difference between having the business and life that you want or end up settling for something else.

So here it is: TAMP = Time, Activity, Money, People.

I’ve always said that being an entrepreneur is both a blessing and a curse and these four items are among the biggest reasons why. The blessing is, no one can tell you how to approach each of these areas because you get to decide and you are in control. The downside is that no one is going to make you choose wisely and you will sometimes get it completely wrong. Just call that “learning” and by now we’ve all gotten plenty of it!

In my last post, I talked about “Writing the History of the Future” and I’d like to continue on that theme because the TAMP choices you make over the next 5 to 10 years or more will have more to do with your results than any other thing and maybe all other things combined. So let’s break it down one by one.

T = Time: Yes, the clock ticks away one second at a time for all of us, but how do some people get so much more accomplished than others do with the same amount of minutes, hours and days to deal with? The answer is they have a system, whatever it may be. There’s no one right answer to this one because the system that works for you is the right system. I use a modified version of Strategic Coach’s Entrepreneurial Time System, which you can download and think through. Regardless of what you use, waking up everyday with a plan for that day is crucial to success. Even if you just have an ideal week structure, a quarterly stop to review and reset, and an annual planning and projection process, you will be way ahead of the game on this one. Simple but not easy. Easier if someone else holds you accountable to it.

A = Activity: It’s not just about “managing” your time. It’s also about what type of activities you spend your time on, and even more importantly, what activities you refuse to do. What activities align your best skills and capabilities with what makes your toes tap? If you are good at something and it also gives you energy, it’s a sign that it’s a unique ability, and as good as you are at a lot of things, you’re probably unique at no more than a few.. Making 80% of your activities fall into this category will have you doing your highest and best work the majority of the time and go a long way to boosting your confidence. Furthermore, it helps you eliminate non-productive activities and forces you to collaborate with others who have skills in other areas to complement yours. While you can’t always control the results, you can certainly control the inputs, and those inputs are usually the activities that you know will lead to the results you want.

M = Money: We’re in the money business so this one could go in a lot of directions, but let’s just focus it on how you look at the money you make. It’s pretty traditional for any entrepreneur to look at their “take home pay” as “total gross income minus all expenses”. But I would encourage you to pay yourself a “salary” based on a combo of your experience, capabilities, and the amount of revenue you manage. That salary, roughly set at about 40% of your overall revenue, will be a big part of your total income, especially early on, but it shouldn’t be the only part. The other part will come from managing your business toward a net profit goal of say 25% or so. Consciously and proactively managing your overhead and expenses to no more than 35% of revenue will leave you with a 25% profit after you pay yourself a market wage for being an advisor of around 40%. Together, you net 65%, but there is wisdom in how you got there and if you ever plan to develop an associate advisor, take on a partner, or sell your practice one day, this net profit number will become a handy, if not necessary, tool to lean on. Another money mindset that has served me well is that if you have a “problem” that you can write a check to cover or have handled for you, then you don’t have a problem. I could go deeper on how you spend your money and what you spend it on, but that’s a great segue to the next letter…

P = People: Without quality people supporting the various aspects of your business, you will inevitably hit a ceiling and continually bounce off of it. I can point back to certain inflection points in my 30-year career where I made a jump from one level to the next and at every single one I can point to a specific person joining me and the others as a collaborator in this business. Finding the right people can be challenging, and like we have, you will surely swing and miss sometimes. Just learn and move on when that happens and don’t lose the lesson. But “A” players do not cost you money. In fact, in the spirit of “what do you do with your money”, “A” players are more like investments that compound over time vs expenses or overhead that is spent and never comes back around. Would you ever make an investment without expecting it to grow and compound? The same is true with seeing team members as investments vs an overhead item. What is your mindset around partnership with other people? I don’t necessarily mean legal partnership, but more like “partnering” different skills and capabilities and resources: money managers, marketing people, Cetera growth officers, technology providers, platform creators, compliance/due diligence people, your local support team, and on and on.

Now trust me on this: there a thousand other details to this business that we or someone on our team has to pay attention to, but most of them are some sort of subset of these biggies. And if you, as the lead advisor and entrepreneur, can just get these Big Four locked down, the rest become easier. Put simply: do you have a time system, do you focus on your most productive activities, do you run your business like a business and are you supported by and partnered with the right people? The rest is details.