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Practice Management > Building Your Business

Growing Your Advisory Firm by Recruiting the 'Right-Fit' Advisor

By Tom Daley

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I know many seasoned advisors who have built and established very successful businesses. But capitalizing on that initial success and taking their practice to the next level often poses a significant challenge. In many cases, fostering growth for long-term continuity and health of the firm is best achieved through careful expansion of the team. But where do you start? 

Bringing on the “Right Fit” advisor can fulfill your growth goal in the short term and also help play a role in your long-term succession plan if you find the ideal fit. 

First Steps: What’s Your Strategy?

Once you’ve decided it’s time to expand your business through recruiting an advisor, take the time to clearly define your firm’s value proposition and how you want to go about growing your business. 

There are two growth strategies to consider: 

1. Bringing on an experienced advisor who can either

    • manage more of the day-to-day operations, freeing up the senior advisor to spend more time servicing clients, or bring along a strong client base and book of business

2. Bringing on a junior advisor to train, develop and groom to eventually generate additional client and revenue opportunities for the firm 

Advisors who want to expand their practices must have a clear understanding of the strategy they wish to employ and whether they want to continue to be a sole practitioner or build a more team-oriented business. Before considering expansion, it is a good idea to answer some statements to clarify exactly what you are seeking: 

  • What business need am I trying to fulfill with this new advisor?
  • What expectation do I have of this person and his/her role with the firm?
  • What skillset(s) am I looking for?
  • What type of experience do I want to create for myself and my clients long term? 

Once you have defined what you are looking for, it’s time to begin searching for and attracting the right talent. The clearer you are about the advisor you are seeking, the easier it will be to narrow the search and filter out the advisors who aren’t a fit. 

Strategy 1: The Case for Hiring an Experienced Advisor

If you decide the right strategy for your business is to bring on an experienced advisor who can help with the firm’s operations and allow you to spend more time with clients, this individual needs to understand the industry and your business so they can assume some of the managerial and day-to-day operations quickly.

With this advisor role filled, you can let go of many of the administrative responsibilities currently absorbing your time and redirect your energy to what you do best: serving your clients.

This operational leverage can also create the opportunity to grow your client base by giving you more time to dedicate to prospecting and lead generation. The experienced advisor can also bring in additional revenue as they build their own book of business, while managing your business.

If you have the operations side of your business already working efficiently, but want to add to your immediate client base and assets under management, hiring an experienced advisor with a robust clientele and book of business may make sense. 

Again, start by defining the need. Do you want an advisor with a complimentary book of business or do you want to branch out to a new niche entirely? Are you looking for an advisor with a personality closely matching your own or who excels in areas where you do not?

The right candidate will result in a win-win scenario for your firm, the new advisor and your clients.

Strategy 2: The Case for Hiring a Junior Advisor

When looking for the right-fit advisor, a senior advisor may want to consider bringing on a junior advisor. In general we are talking about the 20-to-30-year-olds who are just starting out in the business and are eager to bring added value to the firms they join. 

Many of these junior advisors are well versed in technology and social media trends, new processes and systems, and can offer fresh thoughts and ideas for marketing and client interaction. They also bring enthusiasm, energy and a high level of motivation and passion to succeed. Junior advisors are often more coachable, open to learning and are looking to be groomed.

However, this requires a commitment to providing guidance, structure, training, time and financial support. This level of dedication and investment has to align with the overall goal of the firm. Senior advisors need to set clear expectations as to the duties, responsibilities and role of the junior advisor. 

Today’s industry is different for advisors just starting out. Independently building a book of business and reaching new clients is extremely different from days past. It’s not about cold calling anymore. The majority of today’s wealth is at the senior client level. This makes it difficult for a junior advisor to gain the confidence needed to target the level of wealth the senior advisor is already managing. 

If you are unwilling or simply don’t have the mentoring abilities to bring on a junior advisor, this strategy probably isn’t the right fit for your practice. 

Investing in the Next Gen

Junior advisors are uniquely positioned to build relationships with the next generation of clients. The next gen advisor is likely to have a natural rapport with a younger group of clients, wealth transfer opportunities and millennial investors, many of whom are accustomed to a ready access to information, data, immediate access and quick response times. The rise of the do-it-yourself investment options also means this generation of advisors will truly need to show their clients the value of their customer service and investment expertise. 

Millennial advisors also tend to have a higher comfort level and aptitude for technology. This is important as compliance regulations play a much larger role in today’s industry which is continually inspiring new technologies, systems and documentation processes. Not staying current in this race to innovate dramatically increases a firm’s risk. 

Seasoned advisors looking to expand their business by bringing on an advisor—whether experienced or new to the business—are likely to generate increased client satisfaction and revenues. More often than not, embracing a team-oriented approach creates a greater advantage for your firm and the entire team.

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