I recently overheard an advisor bemoaning the difficulty of taking his firm to the next level. "How can I create a career path for my staff when I only have 10 people in my firm?" the advisor asked. "Especially when I'm already doing everything from making rain to managing the biggest client relationships."
He went on to say that hiring raw talent and developing it was the least appealing of all his options for growing capacity. He also expressed frustration that he had been trying to recruit experienced advisors to his firm for years, only to be rebuffed or to discover that they weren't a good match.
Such firms are like awkward adolescents: Their clothes don't fit and their skin is breaking out, making it harder to get a date. Without a vision for what they wish to become or the ability to pay as much as larger organizations, firms struggle to bring in top talent. With many conflicting demands on owners' time, building a framework falls to the wayside. Often these firms have no human capital strategy, making the recruiting process even more challenging. How do you inspire excitement in your practice and decide who would fit in without a clearly articulated vision beyond the desire to get to $1 billion of AUM? Unfortunately, this is the reality for many in the advisory business today.
This plaintive cry for help is commonly heard from advisors whose practices are both too big and too small: too big to be managed by the current team, and too small to compete for experienced talent. Ironically, while many "tweener" firms desperately need to be managed professionally, the owner often has a death grip on every activity, thereby inhibiting maturation of the business. It's painful to observe these owners. They can't get out of their own way and, in many cases, they are not demonstrating the patience and long view that they recommend for their clients.
Now imagine taking a long view. What if the advisor quoted above had not only kept an eye on possible tuck-in mergers, breakaway brokers and mature advisors from other firms, but also had brought on and developed promising individuals with degrees in financial planning or finance and a year or two of experience at other firms? Would his firm be farther ahead?
It is easy to be critical from the comfortable perch of a larger organization, but as a former small business owner and manager a couple of times over, I know that among my biggest mistakes was trying too hard to bring in big hitters instead of investing in the development of those who already believed in the vision and culture of the organization.
Successful veteran advisors have proven that they can generate new business and make money. When they began their practices they were loaded with energy, but short on wisdom. Now, having been in the business for 15 years or more, they have less energy, but tons of wisdom. Wouldn't it be exciting if they could begin the process of transferring what they've learned to others, teaching them how to harvest referrals from existing clients, develop centers of influence and clarify a strategy for cultivating the next generation of clients?
