How to Take Control of Your Advisory Business so it Doesn't Control You

Dear Advisors,

If you’re trying to grow your financial advisory firm, you’re going to hit several Growth Barriers along the way. These are difficult times because we have to work so much more, only to get the same salary as last year. Once you break through your Growth Barrier, your business and income will grow, but how do we get there? We’ve outlined several Growth Barriers to watch out for, and how to overcome them.

We define Growth Barriers based on gross revenue. The reason you’re working harder for the same (or less) money is because you’re investing in your company’s growth. As you hit your personal productivity capacity, you’ll either have to invest in people or in technology if you want to scale up. Here are the 4 main Growth Barriers specific to financial advisory firms:

• $350,000 Revenue - The solution is to hire people. We call this staffing our liabilities. That means figuring out what you don’t like doing, and hire people who love those things!

  • First, hire a personal assistant to optimize your time. You can afford to do this because you'll have more time to do things that you're passionate about which makes the company more money. Your personal assistant should optimize your time, and since your time is spread between personal and professional, they should be able to help with both to make your time more valuable.

  • Second, replace your freelancers or contractors. Whether that's content creation, paraplanning, or HR, if you use them regularly, you should hire a full-time person for that position. They'll get exponentially more done as they become experts in your firm and your goals.

• $750,000 Revenue - The solution is to invest in technology. If you’re not a tech-savvy firm, or your clients aren’t very tech-savvy, this will be a difficult change. You have a few options here:

  • Start by diving deeper into the technology you already have. You can write workflows, convert to online file storage and e-signatures, and start time-tracking to find other inefficiencies to improve.

  • Consider hiring a technology team. They can assist with issues and implement technology changes. Fee-only RIA’s can hire Kristen Schmidt with RIA Oasis as a technology stack consultant.

  • Few advisory firms build their own custom technology. This might not end in disaster if you set clear parameters and stick within your budget.

• $1,200,000 Revenue - The solution is that you have to choose if you want to work IN the business (meeting with clients, prospects, etc.) or if you want to work ON the business. It’s no longer possible to juggle both and still grow.

  • If you want to work IN the business, you’ll need to hire an Office Manager, or a Director of Operations. They’ll help you free up your time to meet with clients.

  • If you want to work ON the business, you’ll need advisor(s) to replace you. If you have time to find the right person and transition the relationships, this will make your firm transferable, and therefore much more valuable.

• $3,300,000 Revenue - There are several strategic decisions at this point.

  • If you want to continue working IN the business, you will need to hire a leadership team of C-Suite executives to run your business for you. That can be a good or bad decision, depending on your leadership style, skill set, and interests.

  • If you want to continue working ON the business, you’ll need to hire a Chief of Staff. In this hire, you are essentially trying to duplicate yourself. They'll think like you, and represent you in meetings where a strategic decision-maker is needed to help lead the company, but it doesn't have to be you. This will take your company to about $7,000,000 of revenue. At this point you should reassign the Chief of Staff to a role where they can keep using their creative and strategic strengths, but replace them with a team of C-Suite executives who can focus on scaling up.

  • You need to change your sales process to be more focused on the close. We often see this at broker-dealers and shy away from it because it feels impersonal. Your goal here is to create a measurable, efficient sales process that fits your culture and maintains the quality of the client relationships to your standards.

• Growth Barriers at $8,500,000 and $15,000,000 of revenue exist, but they are outside the scope of this article.

Which of these barriers are you struggling with right now? We help our clients solve these problems every day. If you’re interested in a free consultation, give us a call today. You can also check out Michael Kitces’s interview with consultant Angie Herbers in the Advisor Success Podcast episode #018: Taking Control of Your Advisory Business so the Business Doesn’t Control You.

Warm regards,

Brooklyn

P.S.

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