January 9, 2017

20 Questions to Ask Yourself for Building a Sustainable Business Practice

Dilshad Billimoria
Director Dilzer Consultants Pvt Ltd: SEBI Registered Investment Advisor

20 Questions to Ask Yourself for Building a Sustainable Business Practice

Outlining a fiduciary structure of one’s practice will help to maintain systems, processes, workflows, and procedures. Having a close look and fine-tuning the procedures will help in better productivity and potential profits to the firm.

As client relationships are becoming more complex, it is important for the advisor to have access to systems policies at the click of a button to enable them to access critical information and connect with clients more effectively and meaningfully.

Investor behaviour is also changing towards more savvy investors, investors looking at reducing debt, investor seeking above average returns with advisors who can generate that extra alpha, and investors who want specific need based solutions to their problems, which requires the advisor have all critical data points of the investor available at the click of button beside having access to good research.

Technology is playing a significant role and is the need of the hour for firms wanting to scale up.

According to a survey in the US of the advisory firms leveraging technology for their business, 57% are still not able to use the benefits of technology properly.

There could be 2 reasons for this.

The firm is not ready to utilize benefits of technology and integrate its processes.

or technology companies have built structures in bits and parts and no one is able to integrate the whole.

The below survey proves the second point

A Survey conducted by Aite Group which is a technology provider in the US, nearly 31% lack system integration!


According to a 2012 study conducted by Advisor Impact, “streamlining or standardizing routine processes” was identified as a top contributor to increasing capacity and improving efficiency. The same survey indicated this category represented the highest potential for firm improvement, but the advisors struggled to get started.

For technology firms, there is a two-step process to look at

System Integration- Wherein there is an integration of operations, investment, research, sales, financial planning and other related departments in an organization and to facilitate seamless exchange of data between all the departments for smooth functioning.

Workflows-  Where one defines the steps, tasks, sub-tasks after incorporating compliance and procedures. This is how best practices are formed and this is one area which needs constant review and change as we learn from our mistakes or gather experience in steps/processes missed out in the overall dealings with a client.

Sustainable Business

According to a white paper quoting: the managing directors of Head of New Services & Strategic Partnerships, SEI Advisor Network and Head of New Services & Strategic Partnerships, SEI Advisor Network a sustainable practice is defined as “A company that generates continuously increasing value, and can demonstrate a predictable, ongoing stream of future revenues and profits supported by a loyal and growing client base, empowered people, streamlined processes and efficient technology platforms. A sustainable business is not dependent on any one person; if an advisor leaves or retires, the business continues to grow and flourish.”

What makes a business sustainable?

Value Proposition- Unless a clear thought out value proposition is not in place and is not customized to the needs of your client, charging a fee would solely depend on the performance of the asset class you are recommending- this is not what we as advisors want. That is the reason why we need to have a clear and transparent value proposition that is realistic, that can be defined and that can be met.

Profitability- There are debates on what is the best fee structure (AUM/ retainer or fixed fee, profit sharing, watermark) that is sustainable to both clients and advisors. Whatever the fee structure an advisor follows, it needs to create a sustainable revenue model.

Target Segment- This is a difficult one for new advisors, but believe me, if you are able to distinguish between your ideal clients and work on creating relationships that you enjoy working with, it will create a less messy clean up in the future as you grow your advisory practice. It is difficult to segment initially, since it involves saying “no’ to a potential category of clients, forgoing income, and can lead to inbreeding, so an advisor must clearly define his target segment after a careful and thought process.

Teams- Human capital is the most important aspect in ensuring continuity of your business, more clients driven, less dependent on one person and process driven that would help the organization move to the next level. However, having said this, it is important the team shares the same goals and objectives of the top management and the same is communicated to them.

Succession Plan- This is what your organization should work towards in the long run- A shared vision and goal will help build a practice that is fairly valued. Whether one looks at employee succession options, takeover, collaboration options, equity stake, profit sharing – having a clear business model, business analysis and vision of your company in the future, will help build and enable your organization grow to the next level.

Do you have a process in place from onboarding a new client, to discussions, plan presentation, implementation Action Plan and follow up?

20 Questions you should ask yourself to build Sustainable Practice

  1. What is your business model?
  2. Who is your target segment?
  3. What are the options of services you are offering to clients?
  4. Manuals for every department- Operations/ Planning/ Research/ Client Relations
  5. What are TATs for addressing queries/ problems
  6. What are the budgets for various departments set
  7. Process workflow department wise- task wise.
  8. Technology enablers
  9. Strength Opportunities of staff, chief planner.
  10. Responsibility matrix.
  11. How do the various departments integrate with each other?
  12. What are the roles responsibilities and duties of each staff – Do they share a common vision? Are they qualified and certified to be client facing?
  13. What are their internal value systems and philosophies and do they match yours? Is there sufficient training done to new employees?
  14. What are the Confidentiality clauses covered between staff and company and between company and client?
  15. What are the security standards undertaken by your organization to protect your client data and maintain confidentiality?
  16. What are the client services standards followed by your organization
  17. Pre-Client and Post-Client meeting checklists, follow up needed. Do you have this documented?
  18. Documenting Annual Feedback and sharing the same?
  19. Compliance and Taxation- Internal and External responsibilities and timelines
  20. Finally, if plan A fails, do you have a plan B in place?

10 Thoughts to “20 Questions to Ask Yourself for Building a Sustainable Business Practice”

  1. Viresh Patel says:

    Great Dilshad, This Pointers Help

  2. Rohit Shah says:

    Excellent thoughts Dilshad. Thank you.

  3. Brijesh says:

    Brilliant thought Dilshad. You are one of the best investment consultant in India. Your thought process is so clean, straight and backed by client centric approach. If advisors follow what you have mentioned here, they would certainly do well for themselves.

  4. Dilshad says:

    Yes… and for the existing people to go back to the drawing board and validate their structures and policies made.

  5. Jitendra D Pawar says:

    Thanks for such novel thought shared by You. But to get success we have to implement in our working habits.

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