Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Bev,
Our advisory firm has not grown much over the last five years. Except for death and divorces, we haven’t lost clients. But we haven’t obtained new assets. We have been to conferences and heard other advisors speak about their explosive growth, but I am dubious. Are advisory firms really growing so significantly or are we experiencing what most advisors have been over the last few years?
Kevin R., Southern California
Dear Kevin,
I could quote statistics until your eyes glazed over about the growth in our industry, but that wouldn’t matter. What matters is what you are experiencing day-to-day. And that’s the real answer to your question – what does your firm need? While I understand and respect your curiosity about benchmarking, ultimately your livelihood doesn’t depend on what other advisors and firms are doing.
You are asking about your firm – so if I were to translate your question differently I might ask, “We haven’t seen growth for the last five years and we are wondering whether we should be doing something differently?”
In order to fully answer the question, I have to quote some numbers – According to data from Spectrem Group, the Chicago-based wealth research firm, there are now 8.99 million U.S. households whose net worth totals $1 million or more (not including primary residence). That's up from 8.6 million in 2011 and just short of the all-time record set in 2006, when the U.S. had 9.2 million millionaire households.
People with money to invest? Yes, millions of them. Advisors who are growing by leaps and bounds? Yes, all over the country. The opportunity for growth is there.
The questions you need to ask yourself are as follows:
- Do you want to grow, and do you need to grow? Some advisors are perfectly satisfied at a certain income level and number of clients. You have to decide if you need or desire growth.
- Are there opportunities within your current client base to either expand the assets with existing relationships or meet referrals? Most advisors we work with will have satisfied and happy clients, but will not have found all of the opportunities those clients offer
- Do you have staff and bandwidth to grow? Do you have a team and resources to support growth and do you have willing employees to focus on this?
- Do you have a goal or metrics for success if you do decide growth is important?
Ultimately I can’t answer these questions for you; only you and your staff can do so. The opportunities for new clients exist – it’s up to you whether you want to go find them or not!
Dear Bev,
We just lost our third director of operations within four years. The younger generation does not want to work very hard, in my experience. Is it possible to find an older experienced person without appearing to discriminate?
Name withheld
Dear Financial Advisor,
There are almost too many issues in your question for me to address in one column. I am not sure age is your issue. I have seen many unmotivated older folks, and lots of young enthusiastic ones in our industry, so that probably isn’t your issue.
I wonder whether you are doing the following to help your director of ops be successful:
- Offering a clear definition of the role and associated expectations. Not just a job description, but more about what success looks like and the expectations of the job, how it fits with other roles, etc.;
- Aligning compensation with the responsibilities – adequate pay based on your regional area, and the requirements of the role;
- Giving clear and consistent feedback to the person in the role – what’s working, and what’s not. On the things that are not working, what specifically does the person need to do to remedy them?; and
- Aligning culture with the person. This means making sure the person is a good fit for your company and values what you, as leaders, do.
Do a bit of self-examination on these topics to make sure you aren’t missing something. If you are convinced you need someone older, you can go to local colleges – advertise in their alumni section and ask the school to target specific graduation years in the mailing. I don’t advise it, because I don’t think it will solve your problem. But it is a route to go if you so desire.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
