Page 39 - Investment Advisor January/February 2022

THE FAST TRACK

By Angie Herbers

3 Tips for Chasing Organic Growth

Most of our clients ask about how to grow without adding marketing,
hiring rainmakers or looking at M&A possibilities.

re you wondering where your rush out and hire five advisors. Instead,
firm’s next leg of growth will it’s imperative to lay the proper ground-
A come from? Leaders often look work. Here are some tips:
outside their business for the answer —
typically, they’ll gravitate toward adding 1. UNDERSTAND YOUR CAPACITY
marketing services, hiring stars, rain- REQUIREMENTS.
making advisors, or exploring mergers A major mistake that most firms make
and acquisitions. is failing to ensure they have enough
But the fact is that most firms already capacity within their advisor teams to
have what they need to meaningful- enable sustainable growth. The recur-
ly improve their growth. Rather than ring revenue model makes it easy to con-
searching for external silver bullets, tinually assign new clients to an advisor
firm leaders could choose a path that without stopping to think through how
may be more labor-intensive but often many clients each advisor can effec-
far more effective. The key is remember- tively serve.
There’s a huge ing that the field is people-centered. that firms can use to determine the opti-
There is no one-size-fits-all formula
Organic growth doesn’t get the kind
amount of interest of headlines dedicated to non-organic mal ratio of advisors to clients, simply
in organic growth growth in industry publications, and because each firm’s service model is dif-
ferent. It’s up to each business to figure
probably never will. But the most com-
among wealth mon question that advisor firms ask my out the right ratio — as well as maintain
management consultancy is not “How can we sell or that ratio by hiring more advisors at the
buy?” but “How can we really get grow-
right time. The No. 1 killer of organic
firms. Those who ing organically?” growth is employing too few advisors
There’s a huge amount of interest in
to properly serve the growth in clients,
have figured it out organic growth among wealth manage- which means hiring too late.
And these days, the definition of good
are the same ones ment firms. Those who have figured it service has changed. When clients con-
out are the same ones being deluged
being deluged with with acquisition offers. tact an advisor with a question or con-
Often, firm leaders assume market-
acquisition offers. ing is the way to take growth to the cern, they expect a response in an hour
or two. Advisors who are tasked with
next level, for example: “We provide a serving 250-plus clients, which is com-
great set of services, and we just need to mon in the industry, simply won’t be
broadcast that to the world!” That line able to meet these new expectations.
of reasoning is understandable. A lack of service capacity can make
But our firm’s two decades of expe- clients sour on the firm, and it certainly
rience has taught us that growth is all makes them think twice about recom-
about an advisory’s people. Financial mending it to others. The inverse is also
advice is a service-based business, and true: Clients who sense that their advi-
the more advisors you have, the more sor is really taking the time to care for
opportunity you have to serve clients them are likely to become great advo-
and spread your brand message. cates for the business.
But that doesn’t mean you should That’s why I’ve long argued that

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