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There are many milestones in your career as a financial advisor: Your first lead, your first client, the moment you go full-time, the year you break $100k, etc. But one moment eludes even many of the most successful advisors out there: Making one million dollars in a year.

If you’re starting out, this might seem completely unrealistic. But it’s possible. A small elite of financial advisors are pocketing millions every year while others struggle to make even $10k.

In this episode, you’ll find out how you could scale your business to one million dollars in revenue and generate wealth that will free you and your family from having to work.

Show highlights include:

  • How “wasting” money creates more wealth than penny-pinching ever will. (6:08)
  • The 4 things you need to measure to hit any income goal you want to reach. (7:43)
  • The positive side effects of charging more than your competition (these go WAY beyond how much money you pocket at the end of the month). (11:45)
  • Exactly how many prospects an average advisor might need to make a million dollars (that number might be lower for you if you’re above-average). (16:34)






Read Full Transcript


James: Hello, everyone. James here. Welcome to another incredible episode of Financial Advisor Marketing. This one's called How To Get To 1,000,000 Per Year as a Financial Advisor. Yet, before we get into it, I want to make it perfectly clear that I'm not making any guarantees. I'm not saying that you personally will get to $1,000,000 per year in revenue because I'm talking to a broad audience here. But if you follow what I'm saying and you really understand the ideas, you will dramatically increase your chances of hitting that $1,000,000 mark. [0:01:03.8]

I want to clarify again that I'm going to be talking about $1,000,000 in revenue. The reason I'm going to stick with revenue is because it's easier to talk about and to not get nitpicky with everything. It's a little cleaner. It's easier to discuss. People get the ideas, but you can take these ideas and you can apply them. So you can get $1,000,000 in personal income. It's a little more difficult to getting $1,000,000 in revenue. You just have to know how much you take home on $1,000,000 in revenue and then adjust your numbers accordingly. Do your own math. I suggest you listen to this episode a couple of times, maybe with a pen and paper, that way if you get any ideas or you think of how you can apply it to your business or you could do the math yourself and write it out for your own personal situation.

Now, I want to start things off by telling a little story about the power of giving. This is something that happened to me recently and I thought it was pretty cool. This is something that will help you get to that magical $1,000,000 mark much faster. Yes, it's a little metaphysical. [0:02:03.1]

Yes, it's a little rah rah law of attraction, but I don't know how to explain it. I don’t really… I don’t have an explanation. I just know that it works. So there are two charities that I really support on a regular basis. I talked about DonorsChoose.org last week, and that's one of them. The other is one called First Book, which is a charity that gives to low-income children. It gives them books that they can read and help themselves and learn and gain that all empowering knowledge. DonorsChoose is also a great one. You can send money directly to classrooms and if you're listening to this, I encourage you to give to these two charities, and honestly, when someone buys stuff for me, there's a very good chance that the money's going to charity anyway. So by investing in yourself, you're really helping the children, but I digress. It just reminds me of … I'm into hip hop music and I used to have a tee shirt that said Wu-Tang For The Children. Listen to some Wu-Tang, Jonathan?

Jonathan: Yeah, a little bit. Protect your neck, baby. [0:03:02.1]

James: Well, The Advisor Coach is for the children, Jonathan. I recently gave $100 to a project on DonorsChoose and I only do the matched offers because I want my money to go twice as far and I personally filter for books because I want to give books to classrooms. It only needed, I think it was $199 or something like that to finish, so I just gave them the money and they could fully fund what they needed, and I do this all the time. It's not that big of a deal to me. I get a lot of fulfillment from it. If you follow me on LinkedIn, you've seen the photos that I upload of like children writing me thank you letters. The reason I'm talking about it on the podcast, I've kept pretty quiet about it and I haven’t mentioned it in any of my previous podcasts really. It's just because I didn't see a need for it, but I mean, a couple of advisors have said hey, you should really get the message out about Donors Choose and some of the stuff that you're doing to help children. So here I am opening up about it and encouraging you to do the same. Now, I gave them the 100 bucks and then I went out to Royal Farms for lunch and yes, I went out to lunch. [0:04:05.6]

I know I have my productivity stuff. This is a one time thing, people. I went out to Royal Farms, and if you don’t know what Royal Farms is, on the East Coast, in the Baltimore area, Baltimore, Delaware, a little bit in Pennsylvania, I believe, Virginia - there's a restaurant called Royal Farms. They're a fast food/gas station type place and they have banging chicken. I mean this chicken is ridiculous and I love it. What was crazy was that when I got out of my car, and this is literally like 15 minutes after I did it - I gave the $100, then I went out to lunch. I found $100 bill in the parking lot.

Jonathan: No way.

James: Yeah. I was like, I was blown away and I was the only car in the area. It was like 10:45 and no one was there for breakfast. No one is really there for lunch. It's like an empty little parking lot. I park on the side and 100 bucks, it just blew right up to my leg. It was wild. I was like, holy crap, and I don't know if that was just a coincidence. I am pretty sure it was in the grand scheme of things, but …. [0:05:05.2]

Jonathan: It wasn’t.

James: …just to think that I gave the 100 bucks, went out to lunch and found 100-bill on the ground. I don't know. I don't know. That's a little mind-blowing to me, Jonathan.

Jonathan: No. It's not, bro. I found the same thing like when I donate to my church every week. I started donating pretty heavy, like $100 a week, and I found that the more often I do that, the better I do. I think it's just because of the positivity place that you come from where you're giving, you're open to receiving and so the universe somehow picks up on that.

James: Yeah. I guess so. It's like a vibe that you give. It's like I want to help people. I'm really positive. I don’t need the money. It's almost one of those things where like if you don’t need it, you're more likely to get it. The same is true with referrals. You don’t really need referrals. You're not hounding your clients for them. You're just casual about it. They are more likely to give you referrals, at least that's been my experience. [0:06:03.5]

I say all of that that long-winded opening to say this - I've noticed that when I give to others, I tend, just like Jonathan said, I tend to get it right back. This is just an example and I don’t want to get weird about it or anything, but if you aren’t giving to people and if you aren’t making a positive contribution to the world, you're going to find that generating wealth is more difficult for you than it should be. I'm not saying that you definitely do it, that you're fighting an uphill battle. I personally rejected this idea for a very long time. It was extremely difficult for me to give and I would rationalize my behavior. I would tell myself like, oh once I have a certain amount of money, then I'll give, but it doesn’t work like that. It does not work. You have to start where you are. You have to give what you have. So please keep that in mind. I don’t care if you believe in karma or whatever. It doesn’t matter to me. I really don’t care what your beliefs are. I'm just pointing out what I've experienced and what nearly every single person, all of them much wealthier than I am, what they've told me. Now, let's talk about getting to that 1,000,000 per year as a financial advisor. [0:07:07.5]

At the root of getting to any income goal really is simple math. If you don’t know your numbers, that would be step one. You have to know how much you charge, how much you make per client, how many appointments it takes to get a client and how many prospects it takes to get an appointment. That's just the tip of the iceberg, but you have to know your numbers. I'm going to repeat that again. If you're taking notes, you definitely want to pay attention. You definitely want to write this down. Because we're just reverse engineering everything. That's all it is. It's pretty simple. You have to know how much you charge, how much you make per client, your lifetime value, your lifetime revenue or something, how many appointments it takes to get a client, and how many prospects it takes to get an appointment. Now, let's approach this concept from multiple angles because I want to give the listeners a lot of different ways to get this. [0:08:01.6]

So one of my Inner Circle members charges $2500 for a full financial plan, among other things. I mean, he does a bunch of other stuff, but let's just say for the purpose of this example that the $2500 plan was all he offered - $1,000,000 divided by $2500 is 400, which means this guy has to do 400 of these plans to earn a million bucks. If he only works 250 days per year, and I don’t expect you to follow along with all of these numbers. I'm just explaining it to you. If he works 250 days per year, it means he has to do 1.6 of these plans every single day he's working, on average. Now, the important thing is that he knows that number and once he knows that number, he can come to a bunch of different conclusions. He can say, I've got to work more days; I've got to get more clients somehow or I've got to make more money per client - maybe I don’t charge $2500, maybe I charge 3000 to get the same amount of clients or this is like the game changer - he could do all of them and there was some combination thereof and that's what I would do. I would do some combination of all of them at the same time. [0:09:21.1]

So I would try my hardest to work a little bit more if I wanted to make more money or if I wasn’t accomplishing my goal, I wasn’t getting where I needed to go and the only thing holding me back was simply working more - I would put in the hours. I would also make my marketing more effective so I would get more clients and I would also give some serious, serious, serious consideration to raising my fee or charging a little bit more. To keep it very simple, let's say for the purposes of this you're charging 2500 like that guy and you double your prices. Now in reality you may or not double your prices, but let's just say for the purposes of this example, you're doubling your price to $5000 per financial plan. As long as your conversion rate is not cut in half, then you are going to make more money because you're not cutting it in half. You're charging double but your conversion rate is not cut in half. In my experience, when people double their prices, for the most part, the number of people that end up getting the thing or becoming a client, that does not cut in half. So you actually make more money with fewer clients. So something to think about. Something to keep in the back of your mind. [0:10:39.7]


James: Now, I know producer Jonathan operates like this, at least I think he does, but he charges a lot but he has a lifetime value per client, for a person on The Podcast Factory. He has a smaller number of people. Is that the business model?

Jonathan: That is what we shifted to and the case for charging more is that it raises you to another level because you feel like you need to give better service and I think that's one of the best things is - I might have fewer people, but I care about them that much more.

James: Yeah, yeah. That's the whole idea and that's just a positive side effect of charging more and working with fewer people is that your service tends to compound. You provide better service, like producer Jonathan said, which means the clients are happier. They're more likely to do what? Refer. To talk about you. To be a raving fan. I don’t really like the term like raving fan, especially in financial services, but that's essentially what happens. Now, let's do another one. [0:12:10.5]

Let's just go to another example. Let's keep the math nice and easy and let's say you're a financial advisor and you charge 1% on whatever assets you manage. In order for you to make $1,000,000 in revenue, you need to get 100,000,000 under management. Now again, I know the take home is less and I know you can nitpick this stuff, but I said in the beginning I was going to focus on revenue and I want to keep the math easy so people can follow along. A lot of people are listening to me in the gym and the car, some place - I want to keep the math easy. So in order to get $100,000,000 in assets under management, how many clients do you need? That's the number you want to figure out. So let's assume that your average client has $500,000 in investable assets. That means you need 200 clients. Now, in reality I know it would be difficult to manage that many clients without a team, but as time goes on, you can drop the bottom and add to the top and increase your average revenue per client. [0:13:10.5]

That's one of the craziest strategies I've seen financial advisors use and I've helped them in my Inner Circle where they just drop the bottom 10% and then set a new minimum and they just increase the top, increase the top, increase the top and their average revenue per client just explodes. So that's a brilliant strategy. If you want to do that, hey, send me an email james@theadvisorcoach.com and let me know what happens because every single case I've ever seen where people do that, it's a game changer for them.

Jonathan: You know, that's what we did, James. That's where we came up with our new pricing. We went to dropping the bottom, which we would not accept anymore, building up the top and it actually increased our client value by 40% almost just like in under one year.
James: Yeah. It's crazy how it works. It's not just with financial advisors. It's with other businesses. Like every business can do this. I'm amazed that they don’t and especially when you consider that you won't get an equivalent or you shouldn’t get an equivalent drop off in conversions. [0:14:14.1]

It's like I said - if you double your price, as long as you're above cut in half, then you're going to make more money with less work. You can take… well, not less work but less of your time per client and you can take that additional time and your more free time and you can apply it to higher value tasks. So back to the 200 clients thing. Now could you do it? Sure. But you would need to know after you know how much money per client and then after you know how many clients, you would need to know your average client to appointment conversion rate. For most advisors, based on my experience, it's something like 1 out of 3, which means that if they have three appointments with qualified prospects, one of them is going to turn into a client. If yours is better, great. If it's worse, you can get better, no problem. But this means you need to get 200 x 3 appointments to get a client, which is 600 appointments. [0:15:11.4]

That's it. And I'm talking about like overall, the entire picture. If your career goal is to get to $1,000,000 in revenue, all you need to do for your entire career is to amass 200 clients, which if you do a 1 out of 3 conversion rate, is to get 600 appointments. So let's break that down even more.

Let's say you set an appointment with 1 out of every 10 prospects. You've got a marketing machine that's working. You've got email, direct mail, seminars, cold calling, you know, you're touching base with them every - I hate the phrase touching base but for the purposes of this example, you're reaching out to them, you're engaging with them, you're getting in front of them again and again and again. So one out of 10 and this is a pretty good number assuming you have a target market, assuming your messaging is on point, and your drop dead average. [0:16:01.0]

Now it could be better. It could be worse. Let's say 10. This means you need 600, 600 appointments x 10 because you're doing 1 out of 10, which is 6000 prospects. Now if you didn't catch what I did there, please go back and listen to it again if you need to because I just broke down everything. I just established that if you charge 1% of assets under management and you want to get to $1,000,000 per year, based on the math that I gave you, the $500,000 in investable assets per client, broke down everything. You need 6000 prospects for your entire career. That's it. It might seem daunting right now, but remember the old saying - how do you eat an elephant? One bite at a time, and that's why it's important to have a marketing machine. You could set up something with LinkedIn or direct mail or your website or whatever because your machine can pretty much nurture these prospects and set appointments on autopilot. From there, you can do the math however you like. If you want to get to $1,000,000 in five years, divide 6000 by 5 and you've got 1200 prospects per year. [0:17:08.9]

Divide that by 250 working days, and that means you've got 4.8 prospects per day. Now once you break that down like that, things are way easier. If you want to get to $1,000,000 in revenue in five years, that means all you need to do - it's so crazy to me and I'm amazed that more people don’t do this. It means all you need to do is consistently reach out and nurture 4.8 prospects every single day you're working. People may want to skip around it, rationalize, make excuses, but that's pretty much it - 4.8 per day. So I broke it down two different ways - with the fee based where they charge - the fee based and then charging for a financial plan. It comes down to knowing your numbers and breaking it up into small, manageable steps. It's important to have a goal and don’t let me dictate your goal. I'm not the guy who should be doing that. I'm just a guy running a freaking podcast. Don’t listen to me. If you only want $500,000 in revenue, go for it. If you want $2,000,000 in revenue, go for that. [0:18:15.7]

More power to you. I do want to point out that I have a product called Peak Productivity for Financial Advisors and it's one of the most important products that I have because it enables financial advisors to become more productive so they can focus on these revenue generating tasks. If you haven’t gotten it by now, go to TheAdvisorCoach.com and click on the products tab and you'll find it there. One more time - it's called Peak Productivity for Financial Advisors. It is an awesome product. If you're someone who honestly says you want to make a bunch of money and you're worried about $197, you're kidding yourself. This is something that will help you become more productive and become more efficient. It's a drop in the bucket for what you get. That's the episode for this week. Go back and listen to it. This is definitely something that you want to listen to again, just to get everything because this is a very valuable episode. That's it.

Jonathan: Next time?

James: Next time will be three skills the best financial advisors master.

Jonathan: Ohh, interesting. Alright. That is a wrap. Another Financial Advisor Marketing is in the can. This is one of those, because it was very heady, you should listen to it two or three times. So do that and then join us next week as we come back. Thank you for tuning in.

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