As independent advisory firms get bigger and bigger, the transition from a solo business to an ensemble firm is often left out of  the conversation, which is unfortunate.

Solo firms still comprise the majority of independent firms, and the transition from solo to ensemble is probably the most difficult challenge that firm owners will face in their careers.

That’s not to say that creating an ensemble business from a solo practice is difficult. Basically, you just add another professional advisor or two, and work on getting more referrals from existing clients by serving them very well.

The real problems of transitioning to an ensemble come from the owner advisor. What some solo firm owners don’t realize when they start adding other professionals is that their role as owner changes — dramatically. Failing to prepare for, and be comfortable with, those changes can lead to serious problems.

What to Expect

The first challenge that solo owners can face stems from their expectations. Typically, solo advisors start to think about adding more advisors when they are attracting more clients than they can handle by themselves.

At this point, they’ve usually maxed out their time and are looking to share their workload, so they can spend less time in the office and start taking vacations again.

These are worthy goals, but they aren’t realistic. It’s true that adding new advisors will increase the firm’s capacity to work with more clients, but the owner now has to manage those new professionals. And while firm owners may increase total revenues over time, chances are they won’t gain much more “free” time.

Another major change that comes from adding professionals is a “loss of control.”  And this loss is not an illusion.

A solo firm owner with support staff knows what’s going on with every client, with the firm’s employees and with its income and expenses. This leads to the feeling of being “in control” and to having a sense of security for the business..

By bringing on another professional or two, that equation changes — and so do those feelings. Suddenly, the flow of information and communication shifts. And the owner has to make more of an effort to stay on top of what’s going on in the business.

Feelings That Count

Not only does this take up more of their time, but owners typically start to feel a loss of control, coupled with a sense that their success depends a bit less on their own efforts and more on what other people in the firm are doing. This can lead to feelings of insecurity in one’s business.

It’s important that firm owners recognize when these feelings arise and understand that they are normal for most owners making the transition from solo to ensemble. This will enable them to deal with these new feelings constructively, rather than over reacting and becoming overbearing or controlling with their new advisors and other employees.

It’s also common at this stage for owners to either start micro-managing their new advisors or blame them for their feelings of insecurity and loss of control.

Many advisors actually convince themselves that if they fire the new advisors and get “better people” for those positions, they and their firm can get back to the way things were before. This is folly, since it’s the owner having trouble with the new situation rather than the new advisor(s).

Taking Charge

Once you recognize that bringing on new advisors automatically changes the dynamics of your business, you can control avoid overreacting and let go of “how things were.”  This will allow you, instead, to focus your efforts on effectively managing the new situation in your business.

Such an approach is the best — if not the only — way to regain your sense of security in your business.

If you want your business to be different (bigger), you’re going to have to do something differently, and this includes handing over some of the “control” of your clients and your business to other people. It is just a fact about running a business: The larger it gets, the less control an owner has.

Finally, as you accept the new advisors and their role in working with the firm’s clients, there is a tendency to feel a sophomoric sense of freedom: “I’m not really that important to the business.”  You may start taking more vacations and spending more time out of the office.

It’s important to remember that although your job may have changed, the business still needs you as the owner. Your role is more important than it ever was, now.

The key to making the transition from solo to ensemble is your ability to live in uncertainty. This means learning something new, being unable to plan your day and losing control over your time.

In this climate, it helps to focus on goals, such as creating more jobs for advisors and providing helping for more clients in shaping their financial futures.

Having helped many advisory firms make the transition, and also going through the transition myself, I’ve come to see that the other side is much more meaningful and rewarding than staying solo.

Like any transition, in business and life, all you have to do is walk through it. The good news is that no one has to walk through it alone.