By less, they means less time on overseeing internal meetings and less time on smaller accounts. They claim principals can potentially accelerate their firm’s growth by adding two key positions — dedicated management and an associate advisor — that give them more time to go out and bring in new business.
The white paper, titled “Breakout Growth: Adding Key Positions to Unlock Growth Potential,” finds that firms with a dedicated manager produced 36% more income per owner and 41% more operating profit per client than firms where advisors do double duty as business managers, the research showed. Likewise, firms with an associate advisor earned 44% more income per owner and added clients 15% faster than firms without.
Adding talent isn’t enough, however, according to the white paper: “principals need to carve out clear job roles, create a framework that can support a far bigger enterprise down the road and then have the courage to step aside.”
“Putting everyone in the firm, especially the founder, to their highest and best use is the end game,” Christine Gaze, TD Ameritrade Institutional’s director of practice management, said in a statement. “RIAs that effectively deploy these two key roles create opportunities for a productive shift in focus of the lead advisors, which can produce dramatic results.”
Three common missteps RIAs make, she said, involve having unrealistic expectations for your new associate advisor; hiring a business manager but then not trusting them to manage the firm; and hiring managers who are not capable of building and running the bigger company you envision.