The Challenge of Building a Team as a Financial Advisor in 2022

Last week I had a call from an advisory team bursting at the seams from the growth of their business. They know they need to grow the team, but at what cost and what type of person are they looking for. This has become the number one challenge for financial advisors in the last year. How do I grow my team?

What comes first?

When a financial advisor practice is growing rapidly there becomes two challenges, administration and service work and managing growth and new business. I understand it. When I was growing my practice, I remember an ideal client who came in and wanted to work with us. We went through our extensive process and it was clear it was right for them. The process became a successful catalyst for growth. We redefined comprehensive financial services like no other financial advisor. We had a 100-point annual checklist and a strong team. That was the exciting part. But we could not get excited about bringing on new clients as we were constantly running out of time. Sound familiar?

What do you need to fix first?

I decided to fix both challenges at the same time. We were forced to since the growth was taking over the practice. We added an advisor and an administrator at the same time. Bringing on or hiring only an advisor without the administration's help will not help your practice. You need two people and you need them yesterday. That is why so many solo financial advisors with a good assistant join teams. The solo advisor has the capacity and can join a team with strong processes, and a pipeline of prospects. The two hardest things to build in financial services are a pipeline of ideal prospects and your own processes and workflows. This has been a great solution for some practices but it comes with a lot of questions and challenges

What are the challenges?

First off, the equity of your practice and the equity of their practice ( if they own it) The common mistake financial advisors make is not having clarity around future ownership. I get it. Giving away equity to someone you don’t know well enough is a big risk. But saying something like “ in a year or two equity will be discussed or available is a recipe for disaster. The financial advisor joins in the hope of a future promise and leaves because there is no commitment in writing from the other advisor. Sounds like we have seen this movie before. That is why equity and targets go hand in hand. Meet the targets and the equity is available. No targets no equity or bonus. Talk to other advisory teams who have been successful in onboarding other solo teams or advisors, and you will see the cost and benefits, as there is a logical path to growing a financial advisory business. This may help take revenue from 1 to 2 million or 3 to 5 million revenue or 100-200 million or 300-500 million. It needs to be done.

Are there any other options?

Partnering with another advisor is an option, but finding a successful advisor who is not at capacity is difficult. Start by hiring the administration person first, as their job is to free up capacity for you to continue to grow the practice and build better processes. Financial advisors I work with have done that and found they have more time to grow the business as it frees up their time to delegate tasks as well as their assistant's time to delegate as well. Then they now are excited to grow the practice and once it starts to grow, they start looking for another advisor to work with them.

What does the new advisor do?

The new advisor's role is to help manage the top 50 relationships and ultimately take the top relationships over, not the bottom 50 non-ideal clients, as most advisors do. An elite advisor knows their value and moves quickly upmarket and finds and acquires new ideal clients and families 2x the revenue as their best clients. This is because they have built the processes to deliver more value to their new staff and free up time to spend with ideal clients and ideal prospects. This is when they get excited again, as I work to get the best out of elite advisors, with the best clients and best prospects. They are excited to work on new challenges, and new cases and deliver more comprehensive wealth management and planning for ideal prospects. Is your practice getting the best of you?

How to get excited about your practice again

Would you love to face new and exciting challenges in your practice? Would you like to meet new ideal potential clients and families and move upmarket? Start by building out your team, so your practice and your team and your best clients get the best of you before you retire. It’s time to build your team and run the business, instead of the business running you. Start by making a list of what you need in your practice from admin to managing clients. Then map out the ideal people to fill the role. I call it the superhero sidekick exercise. Get clarity around your new team on paper. Then go and build your practice!