Years ago, there was a drama series on PBS called the “Barchester Chronicles,” starring the now-famous Alan Rickman, about two Anglican ministers in a wealthy English village. I didn’t watch the show regularly, but I did manage to catch one scene which has stuck with me all these years: The younger minister (Rickman) was complaining to his older mentor that he didn’t see the point of their work, when, after all, rich people didn’t need God’s comfort. “On the contrary, my son,” replied the older minister (played by Donald Pleasence). “Wealthy people need God more than anyone: They don’t have the illusion that their lives would be OK if they only had more money.”
I’ve been thinking a lot about wealth, lately. Of course, wealth is relative. (For instance, the current administration seems to believe that the “top 1%” and “millionaires” both include couples earning a combined total of $250,000 a year.) Out here in my small corner of the world—Manhattan, Kan.—the bar for “wealth,” or simply “success,” seems to be quite a bit lower than it would be in, say, Manhattan, New York. When you live in a small town and you are a 30-plus woman, apparently owning your own positive cash-flowing small business qualifies as financial success.
It’s nice to be looked up to in your community, yet there’s a darker side to success. For me, the biggest challenge of owning a successful business has been the social alienation. As a truly wealthy friend of mine puts it: “Wealth stands alone. When people think you’re wealthy or successful, they don’t want to hear about your problems because they want to believe that wealth makes all one’s problems go away.” While my limited success wouldn’t even qualify as a good day for truly successful business owners, to the people in my very small town, I might as well be Mark Zuckerberg. Consequently, my friends are, shall we say, less than sympathetic about my fears of increasing overhead too fast or my indecision about the direction in which to grow my business.
The silver lining here is that my own struggle to come to grips with success has increased my understanding of the issues that independent advisors face when their firms become successful. I now realize that the No. 1 challenge of being an owner/advisor is not building a successful advisory practice, it’s dealing with one’s success once it’s achieved. And now I understand why I spend more of my time keeping my client advisors from undermining their success than I did helping them achieve it.
As it turns out, it’s a lot harder for owner/advisors to live with success than it was for them to become successful. There are a number of reasons for that, which appear in various combinations depending on each owner/advisor’s psychological make-up, but all stem from the fact that most firm owners are not prepared for success. The fact is that from the moment advisors make the decision to go independent, they tend to spend virtually every waking minute working toward the success of their firm. They work long hours, take little compensation, provide great care to their clients and talk to other advisors, both locally and at regional and national conferences, about how to make their firm a success.
This level of motivation is why most independent firms are successful. But it’s also why most owner/advisors aren’t prepared for success: They’ve simply not had the time or the energy to think about what they are going to do once they achieve their success. Over the years, I’ve learned to include preparing for success as part of my consulting program, in addition to preparing firm owners to grow successful firms. Here’s how we prepare our owner/advisors to get as much out of their success as they have gotten out of becoming successful:
Be prepared. As with most business challenges, forewarned is forearmed. The awareness that success is going to bring its own set of challenges goes a long way toward laying the groundwork for dealing with those challenges. It’s not unlike the counseling that many advisors give their soon-to-be retiring clients. Each phase of life comes with its unique positives and negatives. Understanding that a new phase is about to begin, whether it’s retirement or a new level of success, puts advisors in a better frame of mind to deal with changes that are to come.
Expect to feel alienated. As I mentioned, success stands alone. As an advisory firm becomes more successful, the gulf between the owners and the staff gets increasingly wider. Part of this is economic: Successful advisors can afford to do things that they couldn’t afford to do before and that most members of their staff still can’t afford. At some point, the owner will stop being “one of the guys.” Although the owner won’t feel any different, their staff, and maybe some of their friends, will start to feel differently about them. They’ll become less and less interested in hearing about your “problems.”
Before an owner/advisor gets very far down this road, it’s a good idea to start building a support group outside the office. I truly believe this is the deeper reason why most multi-advisor firms are formed. From an economic standpoint, there’s not much to be gained from an ensemble firm (perhaps a few dollars in collective overhead). But from a psychological standpoint, the advantages are huge. Partners are a built-in support group: They share your fears and challenges, and are happy to have someone with whom to talk about them. Your support group doesn’t have to be made up of other advisors, but I strongly encourage owner/advisors to find other business owners like themselves, with whom they can talk openly.
Anticipate feeling some degree of guilt. I suspect that psychologically, people are still tribal beings. We may think of ourselves as modern individuals, but we still bond as teams, work as teams and succeed or fail as teams. Of course, teams have a hierarchy: leaders, sub-leaders, followers. I think we instinctively feel that each level comes with its rewards: We understand that quarterbacks, generals, presidents, doctors, etc., deserve a larger share of a team’s success. Yet, we also start to feel uncomfortable when that share becomes disproportionately large (sure, Zuckerberg launched Facebook, but is that really worth tens of billions of dollars?).
I suspect that the advisory business model of managing client assets has created enough discrepancy in compensation to create discomfort in the minds of many advisors. Owner/advisors of successful advisory firms often take home more—and have become worth much more—than they expected to. I believe many advisors have a hard time believing that they deserve this level of success.
Typically, owner/advisors have one of two reactions to these guilt feelings: They avoid the source of their feelings by simply not thinking about their business and letting it falter through benign neglect, or they actively sabotage their firm by spending frivolously, making ill-considered business decisions or undermining the quality of client service.
I’ve found that the antidote to guilt about success is to find a higher purpose for that success. For some business people, that purpose is simply to grow a larger business. That’s how many of today’s Fortune 500 companies were built. Or you can use your success as a stepping stone to a bigger job. Many of today’s leaders of financial services companies started out as advisors.
For most independent advisors, though, I suspect a different kind of purpose will be required. Because many advisors spend their careers helping clients determine what “enough” means to them (and because most independent advisors initially chose independence over corporate success), their greater purpose will probably come from a different direction. Increasingly, many older advisors today are gradually shifting their focus away from client work and active management toward mentoring the next generation of advisors to eventually take over their firms. Or one’s greater purpose could be completely outside the firm: using the free time and resources that one’s success has created for charitable work, mentoring, teaching, writing or speaking. Giving in to your higher purpose in an orderly and business-like way can remove the guilt of success, and with it, the need to sabotage your firm.
By the way, one of my friends read this column, and he thinks I am whining about success.