InsuranceNewsNet July 30, 2018 By Jack Martin
Michael Gerber,
father of the eMyth, said: “It’s a myth that people who start businesses are
entrepreneurs.”
For financial
advisors, a new InsurMark survey found the eMyth is a reality. Nearly
three-quarters (74 percent) of those surveyed identified themselves as
“advisors who own a business” versus 26 percent who said they are “business
owners who happen to be advisors,” according to the Spring Business Alpha survey.
InsurMark conducted
this Business Alpha Data Survey to help advisors understand the challenges of
running their practice as a more successful business.
Financial advisors
as a group are an aging population. They are facing a season of transition. And
so this survey focused on one central question: How prepared are you?
“Many advisors may
be setting themselves up for a lot of unnecessary stress. Most are baby boomers
and will eventually face a transition. When we found that 83 percent of
advisors consider their business a part of their retirement plans, we knew that
these advisors could need help planning and preparing for their life after
work,” said Jay Vinson, InsurMark’s executive vice president for sales and
marketing.
The business
opportunity for advisors and institutions who work with them is that many of
these advisors could have more than a great-paying job with more structure to
their business.
The survey found
that even though their business is a part of their retirement plans, 65 percent
of advisors said they had no succession plans and 89 percent said they had no
appraised value for their business.
“It’s really a case
of the cobbler’s family has no shoes,” Vinson said. “Advisors do a great job of
measuring their clients’ assets and progress toward their goals. But they have
not taken the basic steps to prepare their business for a transition. We don’t
think this means they are all planning to ‘die at their desks’ but they could
use help from strategic partners to maximize their business planning.”
“Another
interesting thread revealed by the survey was how are really committed advisors
are to their life’s work,” said Jeff Maxey, InsurMark executive vice president
and general manager. “The vast majority have enjoyed careers of 15-plus years.
Sixty-two percent are sole practitioners or what are called ‘lifestyle’
practices, while 38 percent work in multi-advisor or enterprise practices.
Advisors have been relatively successful financially with 88 percent earning
more than $100,000 annually and 18 percent earning more than $1 million
annually.”
Taking the view
that advisors are focused on the “lifestyle” aspect of their business, the
survey found that 69 percent of the advisors said they had not realized their
desired work/life balance. More revealing was the finding that 75 percent found
the biggest barrier to realizing their work/life balance was time.
Jack Martin, CFP, is
co-founder and president of Elite Advisor Group. Jack may be contacted atjack.martin@innfeedback.com.
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