Traps That Advisors Fall Into And How to Avoid Them

Micah Shilanski, CFP®, shares five common traps advisors fall into while searching for success and the most effective way for advisors to build their business.

4.5 min read

Throughout my career, I wish someone had yanked me back by my collar whenever I was on the verge of making a stupid mistake. A few people did that for me, and I’m eternally grateful.

However, I did fall into many different traps searching for success. I spent so much money on these things; it makes me sick to think about it, and I want you to avoid these mistakes, too.

Here’s my list of common pitfalls advisors stumble into in their desperate search to grow their practice and the one simple solution you’re overlooking.

1. I have to have the latest and greatest CRM

I hear advisors who are on a never-ending hunt for the perfect CRM because they believe they’d be successful if they had a better tech stack.

They get caught up in believing that a better platform would improve Surge, print out exceptional value adds, and run their practice for them. 

No matter what the salesman tells you or how great the demo is,  you’ll never find a perfect technology solution that will solve all your problems. It doesn’t exist. 

You need to run with what you have and focus on tasks that move the needle.

2. I’ll only be successful if I can set up shop in this city

Much like realtors, financial advisors get caught up in believing their location will define whether their firm sinks or swims.

Interestingly, we talk to advisors who insist their location is hampering their success. And we’ll hear from advisors in the same city who will argue that they are successful because of where their practice is stationed.

We see both sides of the same coin. Your location is the hand you were dealt. How are you playing it?

Even if you pack up and move your entire practice across the country, you’ll still struggle to find success because you’re chasing a mythical solution instead of focusing on making effective changes.

3. Social media is where it’s at

Getting a million views for a TikTok dance routine with captions about the importance of Roth Conversions won’t win you any clients.

You’ll feel tempted to throw marketing dollars at social media, but I want you to know that boosting your engagement on social won’t grow your business.

Your prospective clients aren’t doom-scrolling Instagram reels or Facebook ads. And they definitely aren’t wasting hours on TikTok.

I’ve wasted so much money—tens of thousands of dollars—on marketing companies that couldn’t deliver in any measurable way.

Did my firm grow while I was under contract with these companies?

Yes—but my firm grew before we went under contract and continued to grow after I fired them.

“Marketing experts” weren’t the common denominator in my success, and they won’t be in yours.

4. Investments matter most

I see advisors who use investments as the linchpin in their practices, and I need to remind you that just because you get paid through investments, that isn’t the only way you add value.

Consider this example:

Let’s say that I had three different clients: one paid me in cash (for any regulators reading this, I don’t take cash; this is just a discussion), one paid with a check, and the other paid with a credit card. 

All three clients pay me the same amount but in three different ways. Does this mean I must send the credit card guy extra value adds on electronic currency, crypto, and credit card management? 

No, that would be ridiculous!

But when we start talking about AUM, advisors suddenly think they need to pay extra special attention to the assets and drop the ball on all the other ways they deliver value.

You’re a financial advisor, not a broker—it’s essential not to lose focus on every other aspect of financial planning.

5. I only need one more designation

Adding a conglomerate of letters behind your name won’t make you successful. And if you’re an advisor with 37 different letters after your name, brace yourself because you’re about to hear some tough love.

You already know everything you need to be great at the technical aspects of your job. Dipping into the alphabet soup of earning designations won’t make you successful.

I know advisors who have CFP®s with terrible practices. I know advisors who advertise that they aren’t CFP® certified with fantastic practices.

The letters lined up after your name can’t determine the value you deliver.

An up-and-coming advisor in my firm passed her CFP® exams and asked me what she should do next. After congratulating her, I explained that now, she’ll put her education aside and learn how real financial planning works.

Continuing your education is excellent—professional development is vital to your success! However, if you’re hanging everything on getting one more designation, you’re setting yourself up for failure.

What really matters

It’s so easy to get caught up chasing these shiny objects—these excuses we use to justify our lack of success. When really, we’re getting caught up behind these traps as sales avoidance activities.

It’s easier to justify a new CRM than to do our prospecting repetitions.

It’s less painful to blame our failure on our location than our lack of center of influence outreach.

There aren’t any magic solutions to your business woes—just a lot of hard work and dedication to your progress.

Instead of playing with investment models—you should do some solid business planning.

Business planning is the only thing that has consistently moved my practice forward year after year. Every time I slacked with business planning, my progress suffered.

Business planning basics

You should do business planning between September and November to make any necessary pivots in Q4 and reach your goals. Early planning also helps you maintain momentum into the following year.

If you wait until December, your plan won’t be effective, and you’ll get burned out trying to implement it through the new year.

Have your team gather real numbers, not the ones you think you have. Have your team pull your profit and loss report straight from QuickBooks. Also, pull your yearly calendar with days worked and meetings held.

Next, look at how much your clients are actually paying you. Pull up your list of clients and assets (remove names) and calculate your paid fee—not your stated fee or fee schedule.

Once you’ve reviewed where your numbers are, take a look at where you want to be in the next three to five years:

• Where do you want your personal life to be?
• Where do you want your practice to be?
• How will you balance these two things?

Once you have your three to five-year vision, it’s time to start dialing it back to determine what action items you need for each year, quarter, month, and week to help you reach those goals.

What things can you do? What items are going to be a stretch? Is there anything you’ll need a new system for?

Make sure your business plan revolves around things you can control. You can’t control how many clients hire you, but you can contact five prospects and five centers of influence each week.

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