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How to Become the Advisory Firm of the Future

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What You Need to Know

  • The pandemic created a great opportunity for advisory firms to rethink the way they work and where.
  • Do whatever you can to empower each person to do their part in your organization, Altair Advisers' CEO says.
  • Learn delegate, think about your clients' entire families, and manage to results, she also suggests.

As advisory firms work to grow their business over the next decade, there are several steps they can take, according to Rebekah Kohmescher, CEO of Altair Advisers in Chicago.

Her firm’s entrepreneurial journey was sort of a “forced or accidental one, which I think is common across industries but certainly in ours,” she said in the session “Advisory Firm of 2030” during the BNY Mellon | Pershing INSITE21 virtual conference.

Altair started out as part of Arthur Andersen in 2002. Kohmescher’s group at that now-defunct firm focused on investment advisory, financial planning and wealth education. After leaving the firm, it started focusing on those same areas as an independent wealth advisory company.

“There were eight of us at that time and we took 50 clients and $500 million with us,” she recalled. “We’ve since grown all organically over the last almost 19 years to over $6 billion and probably almost 400 families today that we help.”

During the presentation, she was interviewed by Ben Harrison, co-head of Wealth Solutions at BNY Mellon | Pershing, who said that as he talked to leaders around the country, “growth is always top of mind.”

BNY conducted a poll at its Elite Advisor Summit in which “almost 50% of the respondents said that growth was coming from client referrals” and 70% said they believed inorganic growth will be a “really important strategy over the next decade.”

“We believe the 2020s are lining up to be the most powerful decade ever for independent advice,” Harrison said.

He asked Kohmescher to give her take on how to successfully tackle the challenges all firms face on their way to becoming a wealth management firm of the future, and five of the standout tips she provided are below.

Top 5 Ways Advisory Firms Can Grow Over the Next Decade

1. Rethink the way your organization works and where it works.

Take advantage of this “once-in-a-generation, once-in-a-100-year opportunity to rethink the way work happens and where it happens,” she suggested. “I don’t think that 100% remote for everyone is best and I don’t think five days a week, which now seems excessive, in the office is right for everyone.”

She has worked with the “core” groups at her firm to develop work plans that worked best for each of them based on their degree of interactions with each other and the outside world. “It’s all about how do they serve each other and our clients well,” she said, noting her firm will try this as an experiment for three months and see how it works out and then “iterate” and see if there may be a better system.

2. Do whatever you can to “empower each person to do their part in the organization.”

Helping each person in your organization to “understand the role they play and how valued it is is really important,” she said.

3. Learn to delegate.

“Often the challenge in firms like ours or any entrepreneur in any industry is that the thing that got them where they are isn’t the thing that will get them to the next step,” she said. So don’t try to do all jobs well. Instead, learn to delegate and give control and decision-making abilities to others at your firm.

4. Start thinking about your clients’ entire families if you aren’t now.

“Firms that are dealing with higher-net-worth families, like we are, really need to think of their clients as families, not one person, and they need to figure out how to serve that family,” she said. Advisors should teach their clients about wealth and “what it enables” because, “if we can’t do that proactively and well, not just sort of on the side or when it comes up or when they have a kid who’s treating the money badly or acting spoiled … we won’t get and keep clients.”

5. Manage to results.

“It’s your job as the manager to communicate what” the results you want to be, she said. Shifting her mindset this way even before the pandemic had a “huge impact on how younger workers, especially millennial and younger, feel empowered to do their job when and where they want to,” she noted. You do not need to see employees all the time to manage them, which is more like babysitting. “You need to move on from that style” if you are still managing employees like that, she suggested.

(Photo: Shutterstock)