When growing their teams, some owners of advisors firms seem confused about what they need to look for in an advisor candidate. The confusion is understandable, though, considering the ever-evolving job descriptions of a rapidly changing wealth management industry.
No matter what a firm actually needs, the default prospect across the board almost always fits the same description: the rainmaker — an advisor who can bring in new business.
When adding to their team, owners understandably want to add a rainmaker, because they are seen as a profit center, rather than expense. Who wouldn’t want a growth-oriented employee, especially given that hiring and salaries overtime can be expensive?
But it’s best to resist this temptation. Instead, it’s likely much better for the health of your firm to hire a service advisor — a workhorse, rather than a unicorn.
The key difference between a rainmaker and a service advisor is that the former wants to go out and produce new business, while the latter wants to service existing business. Both are essential to the health of an advisory firm, but the service advisor is often more valuable.
Why You Don’t Need Another Rainmaker
Keep in mind, if you’re an owner, then you are likely the rainmaker. Unless you have more advisors than clients, you probably don’t need much help growing your client list.
While rainmakers can be a blessing to your AUM, they also come with their own unique set of problems. Here’s are three:
1. They don’t really need you.
A true rainmaker can bring in their own business all day long, which means you need them more than they need you that creates imbalance from the start.
2. They’re more likely to leave and start their own business someday.
Every rainmakers’ tenure on a team is ticking down to the moment they gain the confidence to strike out on their own. It’s often inevitable with the rainmaker’s personality type, once they realize they can do what you did and start their own business.
3. They think they’re more important than service advisors.
Their strong suit is forming new relationships that directly contribute to the bottom line, and rainmakers see that contribution as the most important thing — even over keeping current clients happy.
However, as noted above, there is another path to growing your stable of advisors.
The Unsung Hero
Service advisors have a different strong suit that may not be as easy to quantify, but is just as important, if not more so.
They don’t like selling and networking, and forming new relationships is a slow, sometimes nonexistent part of their job.
But here’s what makes service advisors so great:
1. If you invest in them, they can service the business you already have.
It’s easy to look at service advisors as more of an expense than a rainmaker would be, but you should view them as an investment in keeping your clients happy. It’s much easier to serve clients well, and get referrals from them, than to go out and find new strangers to work with your firm.
2. They are happy working with clients you produce.
Often a rainmaker isn’t happy unless their contribution to your bottom line also affects their own personal bottom line. However, service advisors want nothing more than to keep clients happy — no matter who brought those clients into the firm.
Think of it this way: If everybody is a rainmaker, then who is servicing your clients? By not investing in service advisors, you’re putting a cap on service.
When it comes time to make your next hire, look for reliability over rainmaking ability. You’ll end up playing to everyone’s strengths and creating a stronger business as a result.