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,
I know you write a lot about growth strategies. We have an unusual problem in that we are growing too fast and bringing in too much business. The senior advisors are getting tapped out and really don’t want to take on more new clients.
We are not ready to bring in another junior advisor. We have hired three over the last two years and we are still working on integration and making sure we are setting them up for success.
Do you see RIAs put a pause on new business for a while because they need to catch up and regroup? We have built an engine over the years where we have such a defined niche market we are referred on a regular basis and then many people find us on their own because of our association with their peers and colleagues. I think we could slow down our contact points in the form of social media postings, emails and scheduled lunches.
It sounds like a good problem to have, right? It actually is creating a lot of stress on the team and within the firm and I am most concerned we are going to drop things on a client and make mistakes if we keep up with this pace.
L.H.
Dear L.H.,
In my view, there is no such thing as a “good problem to have.” There are obstacles to overcome, and those obstacles in almost every case represent opportunities to do things better. Every situation presents opportunities, and yours is no more “good” than a firm struggling with organic growth.
You have built this great engine, and it is working just fine, but it leaves you with the concern about taking on too much. To cease the engine could mean having a hard time restarting it, but to keep going at the pace you are, something is bound to crack. These are real -- and potentially serious -- obstacles, and you are smart to be considering them now before something breaks.
Your firm sounds like one that values process. You have hired new people and you want to focus on integration before you add more to the mix. You have a clearly defined niche, and you have a repeatable business development process. All in all, you are doing everything right from a process perspective.
The question that comes to my mind is whether you are making the right process decisions from a client management perspective. For example:
- Have you segmented these clients, or is everyone getting served at the exact same level of excellence by your advisors? Segmenting can help by looking at whether you are overserving in some cases and making additional work your advisors might not need to be doing.
- Are you setting clear client expectations, or are clients able to contact your advisors at any point and ask questions or seek information? It could be possible your advisors are all saying “yes” too often to clients. You might need to reeducate clients on how often and the best ways for communication.
- Are you leveraging a teaming approach most effectively? You have three junior advisors you are integrating. There might be an opportunity to redesign how your advisors are working with their clients and allocate some clients directly to the newer advisors, or have the junior advisors take a more active role in certain components of the client management process.
It’s very possible you have done all of these things. Your note doesn’t give me enough information to know, but I suspect there could be a client management/engagement opportunity here to become more efficient and effective. Before you turn off the spigot for new clients, or slow it down significantly, consider whether you can make changes to the client process to allow for more capacity.
Dear Bev,
I really enjoyed your column last week about John and it gave me hope for one of our advisors who adamantly does not believe he “got into investing to push products on people” – and that, of course, is a direct quote. We do sell products here, we believe fully in annuities and life insurance as well as some investment “products” in order to round out client portfolios and build in some protection for them too. The three senior leaders of the firm made a very conscious decision when we broke away from a larger firm to continue to provide products to our clients, not because we want to push them and make the commissions but because we fully believe we are doing the right thing.
Our advisor (35+ years in the business) adamantly pushes back about even introducing the concept of adding products to client portfolios. He will run a plan but then he refers out anything the client might need of a product-nature. In my view this is breaching our fiduciary duty because we should be finding the clients the right products, knowing how best to integrate, making sure they don’t purchase more than they need and so on. We should remain the primary liaison with the firms providing us with these options.
After reading your column I’m thinking all is not lost with our “John” but I’m at a loss as to how to get him to see and think differently.
D.C.
Dear D.C.,
This strikes me as a “seek to understand” moment. Your “John” has some reason he believes what you are doing does not feel comfortable and possibly even ethical to him. Could it be he doesn’t feel adequately trained on these products? Could he have had a bad experience where a client accused him of selling something inappropriate in order to make a commission? Could he misunderstand how you use these “products” and how you see them fitting into a client’s overall financial picture? Has he had a bad experience personally and is reticent to recommend something to a client he doesn’t believe in himself?
My guess is that something lies underneath the resistance he is showing you. If you are approaching clients in a true fiduciary manner, and you are only recommending things that will be helpful and beneficial for them, and you are operating with integrity in all you recommend, there has to be a disconnect between what “John” sees and believes and what you are actually doing. I think your next step is to identify what this disconnect is and see if you can’t change John’s viewpoint once you understand why he has it.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022 and 2023. She is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. 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. Beverly speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here. 
