How To Make Six Figures As A Financial Advisor
I wrote this article because I get asked this question (or some variation of it) all the time: “How can I make six figures as a financial advisor?”
It typically comes from newer advisors who are interested in mapping out a path to their goal. Nonetheless, don’t be surprised if I send you this article — where I do my best to explain how to earn six figures — if you ask me that question. First, let’s get one thing straight. I’m NOT saying you’ll make six figures if you follow my advice. Your income depends on you, your situation and your effort. I can only give you ideas and steps to take, and it’s up to you to follow it. Here's what we're going to cover in this article:
Let's get started… Six Figures Varies A LOT...Technically, someone who makes $100,000 per year earns six figures, and so does someone who earns $999,999, even though their lifestyles might drastically differ.
Cost of living also varies wildly from state to state and city to city, so some people find themselves with much greater purchasing power with $100,000 than others. Some people feel poor with $100,000, while others feel rich. Like a lot of things in life, it’s relative. Got it? Good. How To Make $100,000 Per Year As A Financial Advisor...
According to the U.S. Bureau of Labor Statistics, the median yearly income for a financial advisor is nearly $88,000 — if you’re drop-dead in the middle, you’re already close to six figures.
But if you’re nowhere near the close-to-$90,000 per year income level, it means you’re below the median. That might be a hard pill to swallow, but it’s necessary if you want to get to the six-figure range. To make more money, you’re going to have to do something different. Remember this quote by executive leadership coach Marshall Goldsmith: “What got you here won’t get you there.” That means it’s important to pay attention to the behaviors of six-figure earners to get there yourself, including these four for financial advisors. 1. Prospect ConsistentlyOne of the biggest reasons financial advisors fail to earn the amount of money you want is because you don’t prospect enough.
As an advisor, your income largely depends on the number of people who know you. Ask yourself: How many people did you contact today? How many conversations did you have with potential clients? Those two metrics matter more to your income than almost anything else, so if you don’t make the amount of money you want, focus on those. ALSO READ: 15 Prospecting Tips for Financial Advisors 2. Follow Up With ProspectsLow-earning financial advisors will usually reach out to a prospect one time and then move on.
According to the National Sales Executive Association, 48% of people never follow up with a prospect, and only 10% of people make more than three contacts. Yet, 80% of all sales are made after the fifth contact. Even though these numbers are specific to salespeople, I’ve seen them hold true for financial advisors as well. Because for nearly every advisor I’ve ever encountered, adding five follow-up attempts has had a positive impact on income. 3. Have A Sense Of ControlSix-figure earners know they’re the captains of their own ships. This is especially true for financial advisors, because you don’t have a boss in the traditional sense. You make your own hours and set your own vacation schedule.
While it’s nice to have a career with that much freedom, it’s a disadvantage for people without self-control. High-earning financial advisors are self-starters. You realize nobody will save you, and if you want to make the big bucks, you have to create a plan and get to work. 4. Invest In YourselfThe more I work with financial advisors, the more I realize how true this is.
Investing in yourself is a surefire way to shorten your learning curve and put yourself on the fast-track to success. It blows my mind how many financial advisors insist on banging your heads against the wall to reinvent the wheel when a proven path is already created for you. It’s sad, but it seems like people have no problem racking up tens of thousands of dollars in student loan debt (which doesn’t come with a money-back guarantee), yet can’t stomach the thought of investing $1,000 or even $100 into your career. I know people reading this may think, “He’s trying to sell stuff!” And I get it, but you fail when you don’t invest in yourself. Period. You can believe me or not, but it doesn’t change reality. Making Six Figures Comes Down To Knowing Your Numbers
If you’re a financial advisor, you’re in an enviable position.
Why? Because once you know a few simple metrics, you can increase (or decrease) your income accordingly. Watch this… As a financial advisor, you’re essentially trying to take someone down this funnel: Lead → Prospect → Client And that process tends to look like this: Outreach → Qualification → Appointment Which means your mission in life should be to figure out the answers to the following questions:
Of course, I’ve simplified the process for this example but once you know the answers to those three questions, you’ll gain a sense of clarity like you’ve never had before. Let’s say you start with 100 leads, and from those leads, only 30 of them are qualified to do business with you. Then, out of those 30 prospects, only 10 of them actually set an appointment with you. Then, once you have those 10 appointments, 3 of them become clients. After that, you just need to figure out your average income per client and then reverse-engineer everything. If you make an average of $2,500 per client (again, keeping things simple) then you need 40 clients. Which means you need 4,000 leads, and your sole focus should be finding those 4,000 people and qualifying them. Seem daunting? It’s not. If you work five days per week and take two weeks off for vacation, it means you work 250 days per year. If you work 250 days per year, it means you need to go through 16 leads per day to reach 4,000 in a year. That’s it. Literally 16 leads… PER DAY. And another cool thing about being a financial advisor is that your income can be recurring, which means as long as you keep your clients, you keep making money. That brings me to my next point… Not Knowing Your Client's Lifetime Value = Huge MistakeI want you to imagine that for every dollar bill you gave me, I gave you $5 in return. How many dollars would you give me? As many as you could, right?
That’s how a business should operate — you spend $1 on marketing hoping to get at least $1 back. Good marketing returns more than $1, while bad marketing doesn’t give you a return. It’s that simple. Successful marketers understand you can spend up to your client’s lifetime value to acquire them. Fortunately, most financial advisors don’t have to come anywhere near that amount, because the average client’s lifetime value is so high. Let’s say your client’s lifetime value is $7,500. That means you can spend up to $7,500 — including your time and operating expenses — to acquire that client. Even if we cut that number in half, you still have $3,750. Assuming they cost a dollar each, you could literally send 3,750 direct mail pieces with that much money. Don’t you think you’d get at least one client if you sent that many pieces to a targeted audience? ALSO READ: 5 Direct Mail Tips for Financial Advisors Two Secrets To Breeze Past Six Figures...
Financial advisors who sail past low six figures and enter high six figures (and sometimes seven figures) have mastered two things: leverage and scale.
1. Leverage Leverage is all about having things work separately from your time. Using your website is a great form of leverage, for example, because it works for you whether you’re working, asleep or on vacation — it’s always talking to prospects. Another form of leverage you can use is any content you create. Take this article: All I had to do was create it one time, and it will continue to work for me for years. After I’ve written it, it’s completely separate from my time. One more way I can get this article to work harder for me is to get more readers; to get more readers, I need to scale. 2. Scale When a business can scale its operations, it means the business can handle its amount of work or sales in a capable, cost-effective manner. For financial advisors, scale means reaching 1,000 prospects just as easily as 10. One reason I love showing financial advisors how to get clients with LinkedIn is that LinkedIn has scale built-in. It takes the same time and energy to post a status update or share a piece of content, no matter whether10 people are connected with you or 1,000. However, if you have a large network of people and they’re all in your niche, it becomes even easier to build a book of business. Imagine you’re a financial advisor who specializes in working with dentists and 4,000 dentists follow you on LinkedIn. Continuing with our example from earlier, we established you only need 40 clients to make six figures as a financial advisor. If that’s the case, do you know what percentage of your LinkedIn following you need to convert into clients? 1%. Yes, that’s right — a mere one out of every 100 of your connections. If all of them are dentists and you’re a financial advisor who works specifically with dentists, do you think this will be difficult? Your website can also scale, providing you get enough traffic to it. So, let’s keep going with our previous example, where we assumed you got one client for every three appointments you set. If that’s the case, it means you need 120 appointments throughout the course of a year. Now, make sure you’re following along. According to online advertising firm Wordstream, the average landing page conversion rate is 2.35%, so for every 100 visits to your landing page, 2.35 people will make an appointment with you. When you reverse-engineer everything, you find out you only need 5,107 visits to your landing page to set 120 appointments. And that’s assuming you’re drop-dead average — if you’re better than average, you need even less traffic. Over the course of a year, that works out to be about 14 visitors to your landing page per day. Do you see all the ways you can make six figures as a financial advisor? All you really have to do is know your numbers and reverse-engineer the process. What’s really cool is when you get better at everything. Your landing page will convert 5% of people, you’ll start building your social networks, your website will get a huge spike in traffic, you’ll increase your client’s lifetime value or you’ll convert more than one-third of appointments into clients. When that happens, your income can soar. Again, I’m not claiming you’ll make anything — these figures are only examples, but hopefully, I’ve got the gears spinning in your mind. BONUS: Success Factors of High EarnersThere are many ways to get to six figures as a financial advisor, and I’ve only scratched the surface. After all, there’s only so much I can cover with one article, so I go into much more detail across my products and newsletter.
I also dove into the topic in episode 13 of my Financial Advisor Marketing podcast, where I admitted to listeners I want to be the millionaire next door. I want to help you get there, too. So what’s the secret? According to the millionaires surveyed in “The Next Millionaire Next Door: Enduring Strategies for Building Wealth” by Dr. Thomas J. Stanley and Dr. Sarah Stanley, there are several. Here are some show highlights: 💡 The “Navy SEAL trait” 91% of millionaires consider an important success factor in their lives. (This will transform your client interactions!) [4:00] 💡 How denying prospects your services can make you rich in the long term. [8:35] 💡 Why a failing marriage can kill your business. [11:20] 💡 The YouTube video that’ll help you become more productive in your sleep. [14:00] 💡 Why you need to train for leadership qualities, even if you have no employees. [18:10] If you want to listen to the episode, click "play" on the audio player below... In the book, there’s a section where millionaires rank what they consider the most important success factors in their lives — this is incredibly valuable information, so I recapped the top 10 for financial advisors.
1. DisciplineYour parents were right, folks — discipline breeds success.
In the book, 91% of the millionaires surveyed said being well-disciplined is important or very important to your ability to achieve business success. For financial advisors, that means you can’t take lazy shortcuts for your prospecting and marketing efforts. I’ll even take it a step further: Beyond following up with prospects and clients in a timely fashion, you should have a system in place that nurtures clients and makes them feel heard, respected and seen. There’s no way around this truth: As a financial advisor, you have to constantly improve your juggling act. There are client meetings to set and attend, marketing techniques to create and deploy, portfolios to manage, plus a ton of other responsibilities that have to stay top of mind. It can be overwhelming, but the 🔑 key to navigating it all is discipline. 2. Resilience And PerseveranceI’ve never been a big fan of motivational speakers or gurus who spout basic and broad advice like, “Never give up!”
...but perseverance is pretty darn important. I take that back — it’s extremely important. How can you scale your business if you throw in the towel at the first sign of adversity? With that mindset, imagine how many of your favorite products (or candy like Hershey’s!) wouldn’t exist. Napoleon Hill’s “Think and Grow Rich” is another book that changed my life. In there, he talks about how you must keep going and have dogged persistence with everything you do. And he’s right. 3. HonestyWhen I tell financial advisors to get in gear on my podcast, for example, it’s because I mean it, plus it comes from a good place.
While I also speak bluntly because I’m talking to a large audience, I always go out of my way to be more honest with clients — any advisor who wants to be successful should strive to be more transparent, too. Sure, some people might think I’m too brash, but I’d rather give you the truth and help you succeed than pretend to uplift you with lies just because they land better. However, there is a time and a place to share truths with people delicately — that means if you notice a prospect isn't making the right financial decisions, don’t be afraid to be honest in an approach you’re comfortable with. In fact, they’ll respect you for it. Likewise, don’t let a client with $100,000 in the bank and a $20,000 annual salary believe they can retire. You wouldn’t be helping them, right? But when you lead with straightforward honesty, you can give them the dose of reality they need to know when a goal isn’t feasible. If you’re worried about people walking away, look at it this way: A prospect who can’t handle the truth is one you don’t want to work with, anyway. 4. The Ability To Get Along With OthersGetting along with people might be even more important for financial advisors than any other profession. I know that’s a bold statement, but think about how much sensitive information you manage daily.
Your job is to get people to open up and reveal private details about their financial life, including accounts they may hide from a spouse (it’s more common than you think) — that means being personable and welcoming will go a long way. However, getting along with prospects and clients ≠ building rapport by talking endlessly about their interests — i.e. harping on golf because you noticed a golfing photo in their office. If you do that, they might lose respect for you. Instead, focus on being a straightforward and credible authority figure. You don’t have to compromise that to get along with people. 5. Supportive PartnersIf you don’t have a partner, no biggie; just keep this advice in mind.
For advisors who do, always remember that your spouse is just as significant — if not more — than your most important client. It’s no surprise the millionaires surveyed in “The Next Millionaire Next Door” said a supportive partner was an extremely important success factor for them. Plus, if you believe in the mastermind principles Hill shares in “Think and Grow Rich,” consider that one of the greatest masterminds you can ever form in life is with your spouse. After all, they’re the person you’ve committed to spending your life with, not to mention the support system that will be with you and love you even if you lose your book of business. The key idea here is support — whether you have or want a spouse, find someone who’ll hold you up, keep you accountable and help you get through the tough days. 6. Work Hard(er)Unfortunately, working hard just doesn’t cut it anymore — not to hit the six-figure range, at least. To be successful, you have to work harder than your competition, too.
Here’s why that’s easier than you think: Many people don’t want to work hard. They want the rewards, but they’d rather take shortcuts than accumulate the sweat equity it takes to earn six figures and beyond. There’s no shame in that, but don’t expect to sow more than what you’ve worked to reap. Just like if you don’t prospect consistently, it doesn’t make sense to assume you’ll see rapid growth in your book of business. 💡 By the way, it’s crucial to work harder, but you also want to work smarter. That’s why in Peak Productivity for Financial Advisors: How You Can Get More Done In Less Time, I walk you through a ton of strategies to help you do just that. 7. Get OrganizedWhy is organization a key to success? Easy: If you’re not well organized, it’s much harder to be productive.
For instance, If you waste 20 minutes looking for a file, that’s time you could’ve spent on more important tasks, like connecting with a prospect. In a past issue of my newsletter, I shared personal and professional organization tips, because it amazes me how little financial advisors consider the importance of minor details like having organized paperwork. It’s not uncommon to let papers pile up, or for your computer files to be out of whack. Although it seems harmless to lose a few minutes here and there to disorganization, think about how much that time adds up to — then calculate the amount of money you lose in the process. 8. Love (Or, At Least Enjoy) Your CareerI got duped into believing loving my job means every day would be sunshine and rainbows, but that’s not realistic.
You should love most of the work it takes to be a financial advisor, but you don't have to be passionate about every part of your business, whether it’s prospecting, marketing or following up with clients. Some aspects are a given — for example, you should love personal finance, working with people and the niche you target. However, if you realize you enjoy little of what it takes to grow your business, it’s time to reevaluate your career path. I feel lucky that I enjoy my career. I get to work with other amazing advisors who want to make a difference in the world, but they just need a little help. That’s what I’m here for, and I love to do it. Because of that, I always tell people it’s OK to admit when you’re not passionate about your work, because when you are, boy does it make a difference. You’ll put in more work than everyone else and make more of an impact, which is also why you’ll achieve the success most advisors don’t. 9. Be A Strong LeaderI've read many leadership books, taken tons of classes and listened to my fair share of lectures, and here’s what I’ve noticed: They often talk about leading your employees, but they always overlook that you lead your customers, too.
Whether you have a team to manage, keep in mind your prospects and clients are also under your leadership. If you don’t see how, think about it: You lead prospects to set an appointment with you, then you lead them to become clients. It’s pivotal to focus on your leadership qualities to manage employees effectively, but don’t forget about the people you lead who aren’t on your payroll. 10. Have A Competitive SpiritThere are thousands of other financial advisors who want to grow their businesses just like you do, so you have to be competitive. However, that doesn’t mean to compete against your peers.
You’re your own competition, so focus on competing with yourself. I’ll tell you what I always used to hear in school: Keep your eyes on your own paper. You can peek at other advisor’s techniques, but don’t rip off anyone else’s work. Just aim to be a better advisor than you were yesterday. I Can Give Fish To A Financial Advisor...Or, I can help you learn what to do with the line, hook and bait. But if you’re uncoordinated, there’s only so much I can do.
When financial advisors subscribe to my newsletter, for example, I can’t make them succeed if they don’t have at least some of these success factors as traits. I could give that advisor a step-by-step plan to earning six figures, but they’d likely either fail or remain stagnant. Similarly, I can’t teach you all the success factors — like discipline or how to be more honest — but I’ll always encourage you to develop these behaviors by providing the tools you need to succeed. Plus, even if you’re not a financial advisor, know these factors will give you an incredible edge when you apply them to your life. 👉 Keep in mind you don’t need all 10 of these traits. If you have at least five, I would love for you to join my Inner Circle newsletter family. With these traits, you’re primed for success, and this newsletter will be like pouring gasoline on a fire. |