The reason why so many advisory firms have people problems is simple: It’s because the firm is trying to fit square pegs into round holes and trying to make their people do a job they shouldn’t be doing.
To solve this problem, an advisory firm needs an organizational strategy. If you don’t have one, you’re not alone: advisor firms always have human capital issues because they don’t know how to organize their people. Instead of giving everyone a purpose and a defined career track, they check boxes on a piece of paper that don’t give direction or meaning.
If you want the people within your firm to excel in their roles, define those roles in a meaningful way. Great organizational structure must be guided by answering one question for each employee: “What is the primary reason this person is here?”
If that employee’s job is to give advice, that is their primary role. If their role is to service clients, that is their entire role. The more secondary responsibilities a person has, the worse their performance will be at fulfilling their primary duty.
An organizational strategy helps to remove the secondary roles and keep people focused on what they were hired to do.
The Modern Advisory Firm
To build effective organizational strategies, begin by putting employees into one of the following four departments:
1. Client Service and Operations
Team members should love to serve others and work directly with clients. They’re organized, can assemble puzzles quickly and enjoy completing tactical tasks.
Skills to Watch For: Look for people who have great organization skills and do the little things with attention to detail.
2. Investment Management
Employees in this career track love going deep into detail and get satisfaction from analyzing human behavior and pairing it with research to determine investment patterns. This track is for CFAs, not usually CFPs.
Skills to Watch For: This person should excel in studying human behavior and analyzing how those behaviors affect the markets.