Advisors are sometimes reluctant to hire the additional staff they need out of fear that they’ll have to let them go in case of a business setback. That’s a self-defeating attitude, our interviewees agreed.
Bhaj Townsend, president of Focus and Sustain, counseled, “If you need the staff now, hire them, and deal with setbacks if and when they arise with the help of these staff members’ insights and wisdom. You may be surprised at the solutions they suggest to cope with the setback.”
Christine Moriarty, president of MoneyPeace, noted that advisors would be wise to take their own advice: “If someone does good work and your business takes a downturn, it makes sense to have an emergency fund so you can keep them employed while you ride out the storm.”
“I’m a strong advocate for paying professional staff a percentage of their billable time,” said Sheryl Garrett, founder of the Garrett Planning Network. “Before I retired from individual client work, I was part of a four-person team of CFP professionals who served the firm’s clients. As the owner, I was paid for 100% of my billable time. My lead planner, who was responsible for marketing, compliance and some supervisory duties, received two-thirds of her billable time, and our staff planners were paid for one-third of their billable time. Bottom line, when we were very busy, everyone worked more and we made more money. When things were a bit slower, we caught our breath and everyone’s income went down for that period of time.
“We didn’t experience much cyclicality, given that we were primarily working with middle Americans and do-it-yourselfers,” she said. “In fact, the business setback I was most concerned about was not being able to complete quality work efficiently, which would slowly erode our good reputation. So being understaffed was as much of a concern as being overstaffed.”