Real Growth Means Building Your Capacity, Not Just Your Book Hot

0.0 (0)
Write Review


This summer proved the power of excess capacity.


The more clients advisors had, the more people they had to reassure during those hectic weeks while the markets teetered on the brink of melting down.


Those who were already stretched to the limit just handling day-to-day meetings were swamped. But those who had a little time and energy in reserve could roll with the emergency in order to strengthen their existing relationships -- and maybe even win some new ones.


Unfortunately, the current trend in industry recruiting has rewarded advisors with mature practices by giving them the biggest M&A bonuses, while ignoring those with smaller books and spare time on their hands.


Remember, from the wirehouses to the next-generation national RIA firms, just about everyone in the business wants to bolt on accounts and the advisors who service them. They’re not looking for untapped talent to develop in-house.


But unless you have untapped talent, by definition all your talent is going to be tapped out, or close to it.


I’m not saying every firm out there would be well served by going out and hiring a bunch of raw recruits. Training takes time and money, and before these new advisors can prospect their own accounts, they’ll have to rely on in-house referrals.


A good compromise for a firm that’s really looking to evolve -- and not just bolt on AUM -- might be to investigate weaker competitors.


Not every merger has to be a dynastic marriage. Sometimes, there are opportunities to reach out to a rival advisor who’s cobbled together a decent book, but failed to grow.


Maybe technology passed him or her by -- there are still more advisors than you might think that don’t even have websites -- or maybe his or her investment platform just isn’t up to modern standards.


The specifics will always be different, but the underlying scenario will usually be the same: with access to better tools and a little mentoring, there’s excess capacity here that could help your firm pick up the slack in emergencies and expand more aggressively the rest of the time.


Recruiting three advisors that produce $200,000 apiece will probably be cheaper than going after that single $600,000-a-year advisor that everyone else in the industry wants.


And remember, that big wheel will probably be a lot closer to the maximum number of clients he or she can effectively work with than any of those smaller players. The bigger they are when you bring them onboard, the less room they have to grow.


Of course, this perspective works from the other side of the bargaining table.


If you’re an advisor with time on your hands, market yourself as someone who’s figured out how to make a living in the business -- but needs help to take your untapped potential to the next level.


It’s okay to tell the recruiter what they can do for you and your book, as long as you’re also clear on what exactly you plan to do for them.

This Website Is For Financial Professionals Only

User reviews

There are no user reviews for this listing.
Already have an account? or Create an account