Sustainable Growth

Financial planning often attracts men and women who consider themselves primarily as caretakers of their clients’ well being, and only secondarily as businesspeople. Many of them believe that working independently is the best way to provide excellent service to their clients.

This mindset can make a sole practitioner reluctant to hire more staff, join forces with other planners, or partner with experts in other specialties. Yet growth can pay off in quality colleagues and staff, larger referral networks, and more opportunities for strategic referral alliances, all of which help bring in more clients and enhance your revenue stream. Down the road, expansion may also help ensure that your business will continue serving your clients and generating income for you after you retire. Moreover, in today’s regulatory environment, new compliance rules make it harder and harder to keep wearing all the hats yourself.

Some planners, like Chris Dowley of Dowley & Co. in Marblehead, Massachusetts, believe that taking on partners or building up staff is “too much trouble, and not worth the hassle.” Chris has developed a solo practice that now lavishes attention on 52 clients. He works with their CPAs, estate planners, and other professionals when needed, but says his philosophy is “KISS — Keep It Simple, Stupid. I want control and simplicity. I am a great financial advisor, but a lousy manager of people.”

If a solo practice is working fine for you and you see a way to achieve your goals without expanding your business, by all means hold your course. But if you’ve decided that adding capability could help you get where you want to go (see “O Solo Me?” sidebar), be sure you know the challenges you’re apt to face. Money issues aside, are you prepared for the personal changes — the “trouble” and “hassle” that expansion would entail?

If you’re dedicated to giving your clients personal, hands-on attention, the idea of sharing or delegating this responsibility may make you very uncomfortable. Most likely, a good part of your self-worth is tied to the quality of what you do for your clients. You’re concerned about risking the relationship you’ve developed with them and the trust they’ve developed in you. Maybe previous experiences with work partners who shirked their responsibilities have soured you on collaboration. How can you give control to others who might screw up what you’ve built so painstakingly?

I think the first step in letting go is to determine what parts of your business you insist on being totally responsible for. Typically, these would be the areas that are most important for client satisfaction and profitability. Make a second list of services, tasks, or competencies you want to stay closely involved in. Last, what aspects of your work would you be willing (or even delighted) to give to an assistant or a specialist? This final list could include anything from recordkeeping to tax preparation. If you are realistic about your skills and time management, these lists will help you see where you need support.

Learning to Share Control

Let’s say you would like to hand off preparing your clients’ tax returns to a knowledgeable expert. Although there are some excellent accounting firms in your area, you hesitate to give any of these pros access to your client relationships. Somehow, you feel it would make you appear inadequate as an advisor. Less valuable.

Less unique. What if your clients actually preferred working with those CPAs to working with you?

When your self-esteem is bound up in controlling every aspect of your work, there are two exercises I would recommend. First, take some time to write down what drives you — your joys, gifts, strengths, passions, even your mission in life. How and where are you making use of these energies and abilities? In what other ways outside of work could you exercise them? For example, suppose you love receiving clients’ praise when you personally present a plan to them. Would you be more willing to cede this role to a junior planner if you were enjoying audience applause in a community theater group?

Second, generate a list of your clients and highlight the ones you would be willing to gradually pass along to an affiliated planner. What characteristics should this partner have? Instead of trying to find someone just like yourself (who may not even exist), look for an individual who shares your values and integrity and who has strengths where you are weak. It’s not essential that a potential partner have exactly the same goals, as long as they are compatible with yours.

If you find a suitable partner whose views jibe with your own, I would approach this person like a potential spouse. In other words, live together for a while. Structure a trial period for your relationship that lets both of you practice co-consulting skills without being locked into the new arrangement.

This may not be easy. Learning to share decision-making means switching from a “me” mentality to “we.” You’ll need to let go of the total control of your business that you used to have and surrender to a joint vision that you and your partner hold.

Here’s where good listening skills can really pay off. Practice listening to each other openly and empathetically. I suggest following the Harville Hendrix mirroring method, which begins with each of you playing back exactly what the other said. Then validate the other person’s comment, noting what makes sense about it from his or her perspective. Last, empathize (“I imagine you might also be feeling…”). If you both become familiar with this process and learn to enter deeply into each other’s world, you’ll be able to negotiate more effectively when you and your partner have different ideas about a decision or direction for the firm. The result should be a win-win solution that works for you both.

The Right Staff

For a sole practitioner, sharing control with a peer may seem far easier than being responsible for the productivity, development, and compensation of employees. How can you maximize your strengths and minimize your flaws as a boss?

The first step is to manage expectations. In other words, know precisely what you want the prospective employee to do. Handle recordkeeping and compliance? Respond to client questions and concerns? Initiate contact with clients? Find new clients? How will his or her responsibilities intersect with yours (and those of anyone else in the firm)? What professional skills will be required?

When you find a candidate with an appropriate skill set, the second step is to make sure he or she has the qualities you want in a member of your “work family.” If you’ve developed a mission statement and goals for your business, share them with people you are thinking seriously of hiring. Talk about your company’s values and ask about their own. You want to be clear on what motivates them, what they feel committed to, and whether they can get on board with your mission.

The importance of this preliminary research can’t be overstated. If you enjoy your business, clearly you’ve created a work culture that works for you. Hiring the right people will help you sustain the elements of it that you value most.

Managing for Results