Correct it Now…or Pay Later

By Katherine Vessenes, JD, CFP^®, RFC

For years, I have helped professionals in the financial services industry deal with the ever-present problems of compliance. To help identify the specific opinions and preferences of those in the industry, we surveyed 100 financial service professionals to gauge their thoughts, opinions and experiences. Needless to say, we received some very interesting information.

The most startling revelation was that nearly 20 percent of the respondents were aware of someone who had knowingly violated compliance rules and regulations. Imagine that. Twenty percent is an absolutely astounding amount. If twenty percent of the respondents are aware of someone who knowingly committed a violation, imagine how many violators they are unaware of.

The very frank, detailed responses from the participants were even more staggering. One participant said that these violations happen every day. “You can’t work in the securities industry and not violate an NASD or SEC rule every single day – it can’t be done,” said the respondent. This particular respondent has reached the mindset that violations are unavoidable. Once this mindset has been reached, something is definitely wrong.

These blunt responses are a direct reflection of the feeling on compliance currently shared in the industry. Advisors lack the time and desire to complete training. One respondent revealed that their reps have assistants, managers and other reps take the exams for them.

So what is the cause of this breakdown? Simply put, very few compliance officers “get it.” As an industry, we do a terrible job in training our reps in compliance and ethics. For example, let’s look at those dreadful computerized exams. First off, they’re very hard to read and boring. Looking deeper into the problem, these exams don’t focus on actual everyday scenarios. Worst of all, they’re begging, I mean really begging, for people to cheat on them. So we have a boring, difficult exam that’s easy to cheat on. This doesn’t sound like a very good process to promote learning.

In addition to the many problems in the training process, many advisors are forced to deal with inefficiencies in their office. Approximately 40 percent of the survey respondents had been told by compliance that they couldn’t do something that they knew was legal. So let’s get this straight, in an industry of tight rules and regulations, we’re now further confusing our advisors by incorrectly telling them they can’t do things that they actually can? Considering the previously discussed deficiencies in training, it’s easy to see how one could be confused.

Quite honestly, the industry is very discouraged over the current state of regulations because it eats into their profitability and time. Time is the most important resource of any organization, it’s always working against you and there is never enough of it. Consider that 13 percent of registered reps surveyed lose one entire day per week to compliance issues and paperwork. These reps are losing an entire day, in a world where we never have enough time! Well at least they’re putting forth the effort; 30 percent of the responding reps spend less than an hour a week on compliance. So we have reps either wasting too much time on the issue, or not spending enough time. Neither result is good for the advisor or the investor.

It would seem the advisors realize the seriousness of the issue, 45 percent of the respondents are concerned about facing an arbitration complaint or lawsuit. The truth is everyone should be concerned. Arbitration and lawsuits are not only financially costly, but very time consuming. To protect ourselves, these issues must be addressed to take the proper precautions. Visit www.vestmentadvisors.com for more information and to sign up for our eZine newsletter. Compliance concerns aren’t to be taken lightly, correct the problem now or pay later.

Katherine Vessenes, JD, CFP^®, president of Vestment Advisors in Shorewood, MN, is the country’s best known authority on the legal and ethical issues facing financial advisors. She provides advisors a bumper to bumper system to break down barriers and build up their business. She can be reached at Katherine@vestmentadvisors.com or 952-401-1045.

Creating a Strategic Communications Plan

by Benjamin Lewis of Perception, Inc.

Some time ago I wrote that the summer months are the best time of year to sit down and decide on a communications direction for your company then create a comprehensive plan to help you achieve predetermined objectives. It seemed pretty straightforward when I wrote it. Then I got several emails from Communicating Advisor subscribers who reminded me that while it may be simple for someone like me who has been in communications for 17 years, it is not so easy for financial advisors.

So, to help my advisor friends out there who have never created a strategic communications plan before, I am going to take some time over the next several issues of this newsletter to lay out the vital components of a communications plan and how you can put one together with minimal difficulty. In fact, the most difficult part of the plan is step #1 which I am going to address today:

Determining what it is you want to do!

As business owners it is very hard for us to step back from what we are doing and take an honest assessment of where we are and where we want to go. It really is too hard sometimes to see the forest through the trees. I tell advisors all the time that they need to take a step back and identify those company goals and objectives for the upcoming 12 months. Think about your goals over the next year. Do you want to break into a new market? Do you have a new planning service you want to launch? Do you want to do more with the media or get some speaking engagements? There is no point in developing a communications plan unless you know what you want to do with it.

Now, the secret to creating your goals for the next 12 months is to not let yourself list off every goal under the sun, especially those goals that are clearly going to take longer than 12 months to achieve. You have to select goals that you know are 100% possible to achieve within the 12 month timeframe. Now that you have these goals in mind, you need to now develop “mini goals” that will help you achieve these primary goals. These “mini goals” are actually milestones you need to hit over the next 3, 6, 9 and 12 months.

For example, let’s say one of your 12 month goals is to launch a new website and integrate social media. That is one of your primary goals. In order to achieve that goal you need to have “mini goals” that ramp you up to launching that site. So, here are some mini goals that I would develop:

3 Month Mini Goals:

• Identify and hire web designer
• Create site map
• Develop website copy

6 Month Mini Goals:

• Have finished website completed
• Have website approved by compliance
• Create system for regularly updating website content

9 Month Mini Goals:

• Create an account on Twitter, LinkedIn and Facebook
• Create fan pages or groups for my business on LinkedIn and Facebook
• Create system for regularly updating content on the group pages

12 Month Mini Goals:

• Launch a blog that ties in the website and social media

This example is very basic and the mini goals need to be expanded even more because launching a website is one thing, but making certain it is dynamic and is driving traffic takes time.

So, the first step in creating a communications plan is to determine what you want to do. In the next issue we will discuss how you identify your mini goals and why you need to follow “front burner, mid burner, back burner” in the plan.

The Lucky Seven Keys To Conversation And Networking

By Katherine Vessenes, JD, CFP - Vestment Advisors, Inc.

“It’s all about who you know.” I’m sure you’ve all heard this mantra before, possibly when it came to getting a recommendation, finding a job, or in this case, landing a prospect or account. Networking is essential to the process of prospecting, but how do you do so effectively?

To start with, always keep your eyes open for no-cost marketing events. Don’t know what I’m talking about? I’m willing to bet you often find yourself in situations when you can speak with of a lot of people, but simply may not recognize them. Your children’s sporting events, the waiting room at the doctor’s office and even time spent on an airplane all have the potential for interaction with prospects who share your interests.

Here’s a good example, last year I was in the locker room after working out when I noticed the pleasant-looking woman next to me was changing into a very nice suit. We struck up a conversation beginning about her workout but eventually changed gears to what she did. Turned out she also worked in financial services! After her prompting, I was able to give my elevator statement. It wasn’t long before we were discussing her firm, their challenges and more.

The next day I sent a nice, handwritten thank you note and my business card to her office. The note simply noted how nice it was to meet, congratulated her on her new position and expressed my hope to cross paths again. I closed the letter letting her know she could always contact me if she had any questions. Sure enough, one of her co-workers called me about six months later, to speak to her top 80 female brokers! The same person I had spoken to for only a few minutes in the locker room had passed along my information which led to a wonderful opportunity, all for only a card and a few minutes of conversation.

Now I know what your saying, “Katherine just going up and talking to someone you don’t know isn’t easy.” I disagree. Here are my Lucky Seven Keys to Conversation and Networking:

Key #1: Ask Q’s Receive An A+ – By simply asking questions and avoiding talking about yourself, you’ll find conversation is not all that difficult. Why? People love to talk about themselves! Get them talking about themselves and the conversation will get off to a great start. Try to ask open ended questions that force the other person to give you more than a simple yes or no answer.

Key #2: Networking Need Caring – It is essential that you show a genuine interest in the other person. If you come across as any less, they will see right through you. When talking with them, be honest and straightforward – this will demonstrate your genuine interest to the other person. Be sure to maintain good eye contact, as that is one of the keys to strong non-verbal communication. Most of all, listen. It’s easy to get wrapped up in thinking about what you’re going to say and stop paying attention to what you’re being told. Listen, always listen.

Key #3: Business Cards Still Work - Make sure you have plenty of business cards with you. In case you weren’t aware, never ask someone if you can give them your business card, ask for theirs. In giving you their card, it’s only good manners that they take one of yours in return. This is a nice way to circulate your card among others while collecting contact information from possible clients. If they don’t have a card on them, hand them two of your own so they can write their contact information on the back.

Key #4: Mingle Around – This is especially important at gatherings with large groups of people. The more people at the event, the greater likelihood you can find some real prospects. The key to Key #4 is that you have to meet them first. If you attend an event with a co-worker, try what my husband Peter and I do. Split up and work separately. That way you can cover more people and “prescreen” the prospects that may have more in common with your co-worker. Whether with a co-worker or flying solo, it’s essential that you circulate the room to meet as many people as possible.

Key #5: Be Ready With Your Elevator Statement – In meeting someone new, it’s only a matter of time before you’re asked the inevitable question, “what do you do?” It is this question that creates the opening for you to present yourself in the most compelling of manners. Delivering a strong elevator statement that compels the person to ask for more information is a powerful tool to increase your business.

Key #6: Handwritten Notes Matter – It is very important to follow up with a note, but not just any note – a handwritten note. A note that is handwritten on high quality paper can bring about a much greater impact than you may realize. Recipients appreciate the time and effort put into handwriting a note opposed to sending out an automatically-generated message. Sending the handwritten note also provides one more opportunity to send along your business card.

Key #7: Keep Contacting – As you meet more and more people and accrue more contact information, be sure to add the names to your drip marketing list. If you have a written or online newsletter, add your new contacts to the list to begin dripping on them. With each “touch” they will become more and more familiar with you and your brand. If done well, you won’t need to worry about calling them – they’ll call you.

Effective networking cannot be artificial; it must be from the heart. I’m not telling you to go take acting classes because that’s not what I’m implying. Don’t be pushy, doing in with the expectation of getting business out of it. Simply go in with the mindset that you’re getting to know other like-minded people who are prospects. You won’t always attract clients, but you will make a lot of new friends.

Katherine Vessenes, JD, CFP^®, is America’s best known authority on the legal and ethical issues of financial advisors. President of Vestment Advisors, she can be reached at Katherine@vestmentadvisors.com.

Forge Relationships with the Media by Going Above and Beyond

By Benjamin Lewis - President of Perception, Inc.

The following is an excerpt from my book Perfecting The Pitch: Creating Publicity Through Media Rapport.

To truly develop a long-lasting, positive relationship with the media, you must be prepared to do more than present interesting pitches. Simply sending out information and fulfilling media requests will not be enough. If you can go “above and beyond” the call of duty, you will cement your credibility.

Journalists are excellent communicators. They can quickly absorb new facts and understand new situations. But this does not mean that they are experts in your industry. An automotive sector reporter, for example, can give his audience a description of how a car handles, and which features are attractive. Yet, that reporter may not know how, or why, those new features operate as they do. A financial for a national newspaper can write about the latest investment trends and investment products, but she is not working with real clients who are making the investments. You are in a special position to explain in detail how things work, and to show reporters the practical, real-world applications of technologies, products, and services.

Going “above and beyond” means making the extra effort to help the reporter understand that linkage. If you come across a statistic or a new study, share it. If you have a client or customer who is willing to be a real-life source, tell the reporter. If a reporter calls to bounce a couple of ideas off you because you are the expert, be helpful. Each of these will solidify the Foundation of Media Rapport.

How does going “above and beyond” help you? Here’s how:

Relationship Building – You want to be viewed as a resource willing to do what it takes to make the reporter’s job easier. A happy journalist will keep coming back.

Word of Mouth – Colleagues at newspapers or TV stations share sources, and the read articles or watch reports by their competitors. If you have developed a reputation as a good source, you will get more calls and e-mails for interviews. Rather than having one great contact at only one outlet, you may end up with three, four, or more!

Think of it as the equivalent of having a clients who become your advocates and refer all their friends to you. The better you can do for your media “clients,” the more business it will mean for you.

Example:

At Perception, Inc. we have had the privilege of working with thousands of journalists across the country. Often, our new contacts have come from members of the media with whom we worked successfully in the past.

For one of the major financial wire services, we have become in the informal “go to” public relations agency when their reporters need a rapid response by individual financial advisors to stock market shifts. This opportunity grew out of a relationship with one reporter, who then shared his positive experiences with his colleagues. They tested us, and found that we were reliable. Now, our clients benefit from this steady access to international reporters.

Friendships – Ultimately, you want to be viewed as a friend by the media. A friend won’t steer you wrong, won’t take advantage of you, and will always be there when you need them. Going “above and beyond” not only creates a working relationship, but a friendship. The first time you can pick up the phone and just have a conversation with a member of the media, whether it’s about the weather, family, or some other non-related industry topic, you know you will have created a friendship.

Tip/Idea

We are strong believers that members of the media need to be recognized for a job well done. Reporters appreciate knowing that people are reading what they are reporting on (or watching their reports). We encourage all of our clients to send “Thank You” notes to journalists from time to time, referencing a specific article or observation that they found to be valuable.

A handwritten note is a powerful tool in your rapport-building arsenal. It shows you are paying attention, it shows you care, and it keeps your name front and center.

First is a note you might sent to a reporter who did not speak to you, but who covered a topic related to your business:

Dear Steve,

I just wanted to take a moment to thank you for writing the story on the growing problem of leaking underground storage tanks. The problem is more serious and more widespread than most people realize. My company has been working with large chemical developers to advance clean-up procedures for several years. If we can help you in the future, please do not hesitate to call on us.

Thanks again,

Roger Sanders
Environmental Clean-Up, Inc.


Here is a thank-you note that you might send to a reporter who interviewed you for an article:

Dear Melinda,

Thank you for the opportunity today to let me share my observations about the growing need for 401(k) advice services in top corporations. This is a really important issue for all the retiring baby boomers who don’t have pensions to protect them. Your work will help people understand the options they have a little better.

If I can be of assistance to you in the future, please let me know. I will make myself available to you whenever you need a resource on this important issue.

Warm Regards,

Betty Jones
401(k) Advisory Services, LLC.

Business Opportunities – Reporters know people. In fact, they know many people. If they are impressed with you, your company, and your product or service, they will recommend you to others they come across. We hear members of the media tell us stories about how they use a financial advisor we work with because they had a good experience working with them on the stories they are covering. We have had reporters tell us they have recommended specific financial advisors to their family, friends, and audience members. The same story applies to any other service industry.

Going “above and beyond” should never be forgotten. Professionals, business owners, experts, and others who just do the minimum will fade out eventually. Doing everything you can to help them do their jobs a little bit better will keep you top of mind.

Planning Ideas—CLATS Couldn’t be Better

By Cannon Financial Institute

Planning Ideas—CLATS Couldn’t be Better

With interest rates at historic lows, it may be an opportune time for your clients to take advantage of a Charitable Lead Annuity Trust.

How it Works

A CLAT is a charitable trust under which a public charity receives a fixed annuity interest for period measured by a term of years or a life or lives. Following expiration of the charity’s interest, the non-charitable beneficiaries, most often the donor’s heirs, receive the trust property.

The mechanics of a CLAT are illustrated in the following example and diagram.

Dave W. owns commercial property valued at $10 million. The property generates $1 million in rents annually. David has sufficient income from other sources to meet the needs of him and his wife. He would like to transfer the commercial property to his two adult children outright, but is wary of gift and estate taxes. Furthermore, Dave wishes to benefit his favorite charity, a nationally known organization dedicated to the prevention and treatment of cancer. He’d prefer to donate to the charity during his lifetime, so that he can see the impact of his contribution.

Dave’s financial advisor, Charlene, recommends a CLAT. Under the terms of the CLAT, the charity receives 10% of the initial value of the gift ($10 million) semi-annually for 15 years. Assuming an Applicable Federal Rate of 7%, the value of the charitable interest is approximately $9,265,000. The value of the e remainder interest to children is only $735,000. However, if the underlying property has appreciated to $20,000,000 over the 15 year term of the, Dave will have passed over $19 million outside of the transfer tax system to children.

The CLAT is an especially effective way for a donor to transfer appreciating property such as a closely-held business interest or commercial real estate, to his or her heirs at a discounted transfer tax cost. The value of the gift to heirs is the current value of the property less the value of the charity’s interest. Appreciation over and above the annuity payments made to charity pass to the family free of federal transfer tax.

Federal Income Tax Considerations

If the trust is structured as a grantor trust, the grantor is taxed on the income each year, but receives an income tax deduction in the year of the gift equal to the value of the charitable interest. If the trust is not structured as a grantor trust, the donor is not entitled to the income tax deduction.

Whether or not to structure the trust as a grantor trust depends on several factors:

Limits on charitable contribution deduction limits—Charitable contributions to a CLAT are considered “for the use of charity” rather than “to” charity. Consequently, the deduction limit in the year of the gift is 30% (or 20% in the case of appreciated property), rather than the usual 50%. Although amounts not deductible in the year of the transfer may be carried over to future years, the amount of a donor’s income in the future may not sustain the deductions.

Taxability on trust income—The donor is taxed on trust income for the duration of the trust, not just the first year when the charitable deduction is available to offset trust income.

Consequently, most practitioners agree, grantor CLATs are most appropriate for donors whose income in the year of the gift is expected to significantly exceed anticipated income in future years.

Federal Gift Tax Considerations

Regardless of whether the CLAT is a grantor trust for income tax purposes, the value of the charitable interest qualifies for the gift tax charitable deduction. Furthermore, the gift of the remainder interest is the value of the entire gift, less the charitable interest, rather than the entire value of the property. The gift of the remainder interest does not qualify for the gift tax annual exclusion, because it is a gift of future interest. However, any unused gift tax exclusion equivalent is available is available to shelter any gift tax payable. The amount of the gift tax exclusion equivalent in 2009 is $1 million per donor.

Federal Estate Tax Considerations

No portion of the transferred property including future appreciation is included in the donor’s estate for federal estate tax purposes.

Federal Generation Skipping Transfer Tax Considerations

In general, a CLAT is not recommended for transferring property to heirs beyond the donor’s children’s generation. This is because the GSTT exemption is allocated not against the initial value of the remainder interest at the time of the gift, but rather against the appreciated value of the trust property upon termination of the trust. The current (2009) GSTT is $3.5 million per donor.

Financial Considerations

As the AFR declines, the value of the gift to charity increases and the value of the remainder interest decreases. This is because with a lower AFR it is assumed that a larger amount of property is required to generate the payout to the charity. However, if the income and appreciation on the transferred property exceeds the AFR, the non-charitable beneficiaries win. The income and appreciation over and above that necessary to make the required payout passes transfer tax free to the heirs.

Figure 2 illustrates the benefit of a lower AFR rate. The value of the transferred property is assumed to be $1 million, the term 20 years, and the payout rate 5%.

AFR	Value of Remainder Interest	Value of Charitable Interest
11.2%	$606,990	$393,010
3.6%	$296,770	$703,230

Returning to the earlier example involving Dave W., if the current AFR (June 2009) of 2.8% were used, the value of Dave’s current gift to his children is effectively reduced to zero. At a 7% AFR, the gift to heirs was $735,000. Assuming a 45% gift tax rate, federal gift taxes saved, due to the lower AFR, equal $330,750.

Bottom Line

The more services you provide to your clients, the more loyal they are to you and the more insulated they are from your competitors.

Cannon’s Certified Wealth Strategist (CWS) coursework contains ideas on how to gain insight on your clients’ charitable goals. The CWS coursework also contains extensive training on the use of charitable trusts to benefit your clients and the charities they value.

Disclaimer: The materials and information contained herein are intended for educational purposes, to stimulate thought and discussion so as to provide the reader with useful ideas in the area of wealth management planning. These materials and information do not constitute and should not be considered to be tax, accounting, investment, or legal advice regarding the use of any particular wealth management, estate planning, or other technique, device, or suggestion, nor any of the legal, accounting, tax, or other consequences associated with them.

While the content herein is based upon information believed to be reliable, no representation or warranty is given as to its accuracy or completeness. For this reason, the program of study should not be relied upon as such. Although effort has been made to ensure the accuracy of these materials, you should verify independently all statements made in the materials before applying them to your particular fact pattern with a client. You should also determine independently the legal, investment, accounting, tax, and other consequences of using any particular device, technique, or suggestions, and before using them in your own wealth management planning or with a client or prospect. Information, concepts, and opinions provided herein are subject to change without notice.

The strategies contained within these materials may not be suitable for all clients. For many concepts discussed herein, clients are strongly urged to consult with their own advisors regarding any potential strategy and will need to discuss their particular circumstances with their legal and tax advisors beforehand to determine whether a particular strategy described herein is suitable for their particular circumstances.

Examples, provided throughout these materials, are for illustrative purposes only, and no representation is being made that a client will or is likely to achieve the results shown. The examples shown are purely fictional and are not based upon any particular client's circumstances.

43 Websites to get FREE Images

By JD Smith of Ninety Degrees North Design

The perfect image can help keep your reader interested in your writing. It can help explain and drive your point farther than your words alone. In the past, purchasing stock photography required at least $300 to order a CD where there was only one or two images that you could even use.

Times have changed and now when you are you looking for the perfect photo for your latest presentation, proposal or newsletter you can get it for really cheap or even free!

We have generated a list of 43 websites who offer free images. They run the gamut on the quality of their photography, but overall the vast number of them will probably have something to help you spruce up your next marketing piece. Although this is in no way an endorsement on our behalf for any of these companies, we would like to provide this list to you as a reference for your next design project.

1. http://www.123rf.com/freeimages.php
2. http://www.abstractinfluence.com
3. http://www.adigitaldreamer.com/gallery/index.php
4. http://www.animationfactory.com/en/
5. http://www.artfavor.com/
6. http://www.burningwell.org/
7. http://www.cepolina.com/freephoto/
8. http://www.clker.com/
9. http://www.dreamstime.com/free-photos
10. http://www.energy.star29.net/store/
11. http://www.everystockphoto.com/
12. http://www.freedigitalphotos.net/
13. http://www.freefoto.com/index.jsp
14. http://freeimageslive.co.uk
15. http://www.freejpg.com.ar/
16. http://www.freelargephotos.com/
17. http://www.freemediagoo.com/
18. http://www.free-photographs.net/
19. http://www.freephotosbank.com/
20. http://www.freepixels.com/
21. http://www.freerangestock.com/
22. http://www.freestockimages.net
23. http://www.freestockphotos.com/
24. http://www.graphicsarena.com/
25. http://www.imageafter.com/
26. http://www.imagetemple.com/
27. http://livepict.com
28. http://www.morguefile.com/
29. http://office.microsoft.com/en-us/clipart/default.aspx
30. http://www.openstockphotography.org/
31. http://www.photocase.com/en/
32. http://photoeverywhere.co.uk
33. http://www.photoxpress.com/
34. http://www.photogen.com/
35. http://www.photorack.net/index.php
36. http://www.photoree.com/photos/start
37. http://www.pixelperfectdigital.com/free_stock_photos/
38. http://www.stockvault.net/
39. http://www.sxc.hu
40. http://www.tofz.org/index.php
41. http://www.turbophoto.com/Free-Stock-Images
42. http://www.vintagepixels.com/
43. http://www.woophy.com

How Your Assistant Can Be The Key To Bringing In More Business

By Katherine Vessenes of Vestment Advisors, Inc.

What if I told you the key to your success, the lightning rod to bringing in more business and building your practice is already in your office… and it’s not you. No, it’s actually your assistant! While your scratching your head, let me go farther to explain that your assistant should totally run your client service operation. You heard me right. It all begins by making your assistant your Client Service Manager (CSM).

What’s a CSM you ask? Your CSM takes the responsibility of tasks and responsibilities in non-revenue-generating tasks. This opens up more time for you to increase business! Your income potential will swell by hiring the right support staff, and your CSM is at the top of that list. Adding the right support staff is critical to generating more money for your business.

To optimize the use of your CSM, you cannot look at them as “just an assistant.” This person becomes the Chief Operating Officer of your business, enlisting a great deal of responsibility. The CSM controls your time, prepares you for meetings, intercepts interruptions, handles all service requests, sets appointments, and does whatever else it takes for you to concentrate on increasing business. Your CSM is at the heart of your operation.

So who should be my CSM you ask? Well, the role requires a capable individual who is committed and dependable to your business. Your CSM should be organized, social, and a strong researcher. You’ll want to be certain the person is appropriately licensed with adequate experience in the industry. This is important to maximize the freedom the CSM provides to you.

In hiring the right CSM, it’s critical that you develop a strong job description that clearly outlines the functions and expectations of the role. Try this: "Successful financial advisor needs Chief of Staff. You: Great with clients, very organized, can manage/supervise multiple projects and never let anything slip through the cracks. Base pay plus bonuses for helping me reach my goals. Securities and insurance licenses a big plus."

The type of candidate who best fits this role tends to require stability, not risk, in their income. The personality traits linked to being an effective CSM (attention to detail, organization, systematic) also lead those individuals to be wary of commissioned-based payment. The right person will be attracted to a set salary and bonus incentives so it’s important to factor that into the compensation that you’ll offer.

When searching for the right candidate, don’t discount a junior rep. If you are so busy with clients that you need another advisor to meet with them, a junior rep is a great choice. If you’re looking for the support that requires a license to fulfill the responsibilities associated with fulfilling your recommendations and strategies, you are better off transitioning an assistant into the role. A junior rep is more likely to exhibit similar character traits as you, something that can easily lead to conflict. Don't make the move unless you know its right for your situation.

If you choose to transition an assistant into the CSM role, you must assure them that you are empowering them for the long term. They need to know their position isn't a new one but rather an expansion of their former role. Also, you should make sure to supply a base salary that creates a sense of stability. It is only natural for a person with the personality traits of a good CSM to look for stability before accepting the change.

As with many new or unconventional practice methods come questions of why this isn’t a regular practice across the industry. The two main factors are a fear of loss of control and fear of financial repercussions. We’ll first look at the loss of control: advisors often have a hard time sharing authority with other members of their teams. In enlisting a CSM, you are delegating a great deal of influence over to someone other than yourself. That said, you are only one person, and in order to transition your practice into a business, it is vital that you delegate authority. A CSM is a great place to do so, as it opens up so many opportunities for you to grow your business.

The other detractor was money. It’s easy to see why some advisors may not feel comfortable investing in the payroll necessary to attract a quality candidate. Peter and I recommend paying around $30,000 to $45,000 annually including performance bonuses. That may seem like a large investment, but the lesson here is that hiring someone is going to help make better use of your time in bringing in money.

Over the long run, the investment you make in your own time will pay large dividends. Developing your assistant into a CSM will help to provide relief from the stress and frustration of tasks unrelated to the growth of your business. It’s important to realize that great employees are assets, not expenses. By empowering your assistant to become a great CSM, you improve your business by way of creating a strong system built on great employees; a system designed to bring in more and more business over time!

Katherine Vessenes, JD, CFP®, is the country’s leading authority on building the multimillion dollar practice. A popular coach, attorney, author and speaker, she can be reached at: Katherine@vestmentadvisors.com, www.vestmentadvisors.com or 952-401-1045.