The 5 Greatest Risks To A Wholesaler’s Practice

For most wholesalers we speak to, business today ranges from pretty darn good to “I never imagined making this much money” great.

And therein lies the problem.

For it’s during these fat and happy times that we fail to see the risks to our business.

Or maybe we simply ignore them.

Risk One: Concentration of Sellers

Recently we received an email from a new subscriber to Wholesaler Masterminds® who wrote, “It is not 80/20 for me. 3.1% of my clients produce 78% of my business. The biggest challenge is how do I replace a top relationship which does $18-20mm a year with me when he/she leaves their current firm and goes to another firm outside of my channel of coverage?”

They went on to say, “Obviously, I need to work with more people, but at what cost? If I dilute my coverage of these top relationships (100 teams/individuals) how will that affect my future business from the proven commodities of my current top producers?”

We had a number of thoughts about this – and the one we shared was, “have you had a discussion with your most valuable clients to understand their requirement for coverage?”

We said, “If you’re assuming that a relationship requires x amount of time to sustain its significance, and the real amount of time required is x minus something, then you may get to free up time to develop more/deeper relationships with other producers.”

One of our Wholesaler Masterminds Coaching clients, who does have cross channel opportunities, concentrates virtually most of his efforts in wires.

And while it’s his most comfortable channel, he recognizes that he is way over concentrated in wirehouse sellers and has begun to put a planner channel diversification strategy in place.

How are you actively working to remedy any advisor concentration issues in your territory?

Risk Two: Failure To Monitor The Controls

In the airline industry, automation was invented to remove the human error factor from a host of flight related tasks.

And yet, over the last 40 years, we still have had major accidents that can be traced to a failure of flight crews to adequately monitor the flight controls.

At some unfortunate point in the flight the crew simply ‘set it and forget it’.

Analogous to your territory, in that we all have, or have had, a nasty habit of allowing ‘set it and forget it’ (aka laziness) to infiltrate our business.

The economy is cooking along, flows into your product are good to great and your paychecks are mighty fine thank you.

But, are you monitoring the controls?

Are your processes (assuming you have them) checked for the weather conditions (rate increases, market corrections, regulatory changes) that you see ahead on the path of flight?

Risk Three: Inability To Delegate

There’s a good chance that your territory has more producers and is generating more revenue then only a few years ago.

Commensurately, you are super busy – perhaps overwhelmingly so.

And one of the reasons that you feel overwhelmed, in part, may be your failure to delegate.

After all, who can do [fill in task here] better than you?

The problem is as you scale your business, and you continue to attempt to do everything yourself, you’ll start to see areas of your practice weaken.

Maybe your schedule is not as full of the right producers, or target prospects, because you don’t have as much time to make the calls.

Or perhaps your presence in your absence marketing has slowed to a trickle because you no longer have the bandwidth to send out the mailers.

How will you choose to prudently delegate tasks in your practice that will allow you to scale your practice more effectively?

Risk Four: Failure To Insulate Against Turnover

Does this sound familiar: You’ve been at your firm for X number of years and you have have had X number of internal partners.

Each time you have a change of internal it feels like starting over again, as now you need to orient a new team member to the how, what and why of the region.

However, if you had the core processes (assuming you have them) of the territory documented, then the orientation process and learning curve of the new internal becomes a whole lot faster/less steep.

While putting together this documentation sounds daunting, it doesn’t have to be.

Do a bit each week, create it in Evernote, and ask your current partner to assist [see Risk Three].

Will you commit to documenting the critical processes in your territory to insulate the effects of turnover?

Risk Five: Driving Too Fast To See The Scenery

While our readers cover a broad spectrum of demographics, there’s one characteristic inherent to most: they are Drivers who are:

• Objective-focused
• Know what they want and how to get there
• Hardworking and high energy

It is the Driver in you that, in part, is responsible for the tremendous success that you enjoy.

And it is the Driver in you that may be missing the scenery.

Yes, our jobs require 24/7/365 commitment.

Yes, wholesaling is not a job it’s a lifestyle.

No, that does not mean you lose the right to:

• take a vacation,
• attend the occasional kids sporting event/recital,
• have a date night with your significant other,
• spend a night in a travel city visiting a museum,

or perhaps take an intentional 30 minute detour in the middle of the day to see the World’s Largest Pile of Oyster Shells.

For if you drive too fast, you’ll arrive at wherever you thought you were headed and not recall a thing about how you got there – and it’s the getting there that should be part of the joy of the job.

What scenery will you commit to seeing this week?

Wholesaler Masterminds has spent 5000 hours coaching wholesalers and their leaders. How can we help you?

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