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Growing Up Is Hard to Do: Start Acting Your Size, Large Advisory Firm!

By Angie Herbers

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One of the biggest problems that larger advisory firms make is that they continue to act as it they are smaller advisory firms. Almost all of today’s larger firms (let’s place the cutoff as having 30 or more employees) started out as smaller firm (with less than 10 employees). That kind of rapid growth is great for owner incomes, and often creates a personal touch to client services that stays with a firm long after it’s outgrown its mom-and-pop roots. At the same time, larger numbers of owners and employees can also create problems and challenges not found in smaller firms, which require solutions that smaller firms typically don’t need.  

For instance, communication in smaller firms isn’t usually a problem. With a few employees working in one large or a couple of contiguous offices, keeping abreast of changes to procedures, how to use technology, onboarding a new client, or, well, anything new in the office is virtually automatic. In fact, trying to keep some things from becoming common knowledge is usually much more of a challenge. When you’re a small firm, knowledge transfer happens quickly. 

But when firms grow beyond 10 or so employees, move into larger offices, and start to form into working teams—client service, back office, financial planning, investment management, technology, marketing, compliance—communication between these factions becomes much more difficult. For instance, if the investment folks find a slick new way to navigate the CRM database, it can take weeks or months (or never) for the rest of the firm to hear about it. 

It’s not a crisis when a firm loses some efficiencies because folks don’t get a ‘How-To’ tip, but when changes in financial planning assumptions don’t get to everyone in investment management or someone doesn’t hear about a new compliance mandate, the consequences can be more serious. The biggest fear in a larger advisory firm should be that knowledge transfer isn’t happening. 

To solve the knowledge transfer problem in our larger advisory clients, we created a simple tool we call Monday Morning Management (3M) meetings. Every Monday morning at the same time, everyone in the firm gets together to share knowledge, with each Monday of the month having a different agenda. For instance:

  • On the first Monday of month, we talk about the firm as a whole: this month’s operational goals, current projects, the latest revenue numbers, revenue growth goals (and other financial goals) for the month. Even though this is big picture stuff, you’d be surprised at the impact decisions made at every level in the firm can have on the firm’s success. Getting everyone on board with what you’re trying to do gets everyone pulling in the same direction.
  • On the second Monday, we talk technology: new tricks, new processes, new additions, new problems and new solutions. More and more, advisory firms are tech firms, so the better everyone understands how the firm’s platforms work, the more efficiently, and the more effectively, the firm will run. Perhaps the greatest benefit of Tech Monday is that the firm owners quickly get a far better understanding of the challenges their employees are facing. 
  • The third Monday is when we talk about operational processes and procedures. Yes, that’s the boring manual (you do have a P&P manual, right?) that’s supposed to be updated whenever someone changes a process or procedure, but which nobody ever updates. That’s simply dangerous. If clients are being handled one way in one department and differently by another department, that’s a disaster waiting to happen. The solution is to talk about any changes with everyone in the firm once a month, including what needs to be updated and who will do it.
  • Finally, in the fourth Monday meeting (which we often hold over lunch), we talk about staffing issues and updates: introduce—and get feedback on—new hiring plans, changes in policies, talk about challenges or issues, introduce new employees, talk about family stuff (new babies, etc.), or send off someone who is leaving. It’s a time for people to get know each other better, and for firm owners to show their appreciation for everyone’s hard work. 

Our 3 M meetings won’t solve all the problems that arise when smaller firm grows into larger firms, but we’ve found they’ll solve most of them, and make the remaining few far easier to deal with.

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