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Blogs - The Prosperous Advisor
3 Reasons to Hire More Team Members
Thursday, January 17, 2013

Coaching and consulting hundreds of advisors over the years has allowed me to see several industry trends and lump advisors together into various buckets. One of these “buckets” is advisors who view human capital, technology, office space, coaching programs, etc., as an investment versus a cost. Advisors who view these areas as costs tend to experience less success and grow their business at a slower rate.

So, when investing in human capital, how do successful advisors get a great return on their investment? They understand their investment in human capital is made to achieve one of these three goals:

  1. Better Client Service – improve client service levels and the client experience.
  2. Higher Efficiency – increase the efficiency of the entire practice as a whole.
  3. More Time – free up the advisor’s time to do more advisor-related activities (i.e., grow the business).

Every time an addition is made to your team, have complete clarity on what exact duties this new person will assume and how this addresses the three goals mentioned above. Think about it in these terms:

Your team is there to be responsible for all of the service, operational, and administrative functions –things that you, as the business owner/advisor, should be delegating to your team. If you have a great team that performs all these things well, it is now completely on your shoulders as the business owner to grow the business. You have no reasons/excuses for not growing the business because all of your time is now available to do advisor-specific items like strategic thinking, money management, financial planning, pursuing your passions, and generating new business.

Once you have this team in place to do the service, operational, and administrative functions, be sure to compensate them for the behavior you desire. Remember, you want better service, a more efficient office, and more time to do the things you need to. So, connect your compensation plan, specifically your bonus structure, to getting more of the performance you want. Implement a pay-for-performance model (Peak Advisor Alliance calls this Results-Based Pay) that rewards and recognizes the team on the things they can control. The team can not directly control the markets, portfolio returns, new business you close, or the overall revenue you generate. But, they can control the service to your clients, efficiency of the office, and keeping your plate clean. Incentivize them on the tasks they can control.

Meet with your team and explain they now are in control of their bonuses. Bring examples of goals to the meetings and ask them to do the same. These examples should correlate with items that can be put into one of the above three areas. Assign a dollar amount to each of the goals. Pay out the bonuses based on achievement of the goals. We have dozens of suggested goals. Here are a few to illustrate the value:

  1. The client service satisfaction score from your client survey.
  2. The number of Random Acts of Kindness completed for clients.
  3. The percentage of implemented items in the various sections of a systems manual.
  4. The implementation of new client touches such as birthday calls, anniversary calls, weekly or monthly communication pieces, proactive outbound calls, etc.
  5. The incorporation of items currently done by the advisor into the team’s responsibility.
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Everyone agrees that hiring a great team is crucial to growing your practice. It may be the single biggest reason for your success… or lack thereof. So, I suggest when making this investment, be clear on what you want accomplished. Often times your additional hire will contribute to all three of the above goals. However, some advisors in larger practices are hiring personal assistants that essentially do nothing but keep the advisor’s plate clean.

Allocate some time to take a cold, objective look at your practice, and evaluate the level of client service, the efficiency of the practice’s systems and workflows, and your overall productivity/use of time as an advisor. My guess is you will find some valuable investment opportunities – maybe even better opportunities than the equity markets in March 2009!

Ask yourself how much you would invest to have your client satisfaction score go from a 3.8 to 4.8 on a five-point scale, or to have your clients go from fair-weather advocates to raving fans.

How much would you invest to have an office so efficient you never/rarely have a trading error… miss a RMD… forget a birthday or anniversary call… drop the ball with new client paperwork and asset transfer processes, etc?

(3) Comments
The difference between investment and cost in business is understood just by the wise. If you mix up the two, trouble starts. It is necessary to have good human talent pool in any organization, paying them good salaries and providing your talent benefits is never a cost, but an investment. Also there needs to be tools to gauge if you have invested well or not.
Posted by tasha123 s | Sunday, January 20 2013 at 5:43AM ET
But it does not always prove to be beneficial and a god decision as all of them may not do their work properly and with good leadership.

details about this

Posted by Adam H | Monday, May 27 2013 at 5:45AM ET
Do you know that many employers spend 20 seconds or even less to scan a resume for the first time? So, in those few seconds, you need to clearly demonstrate your skills, experience, education, and characteristics and it should match what they are looking for. But generally people write ordinary resumes, so the companies receive hundreds of the similar papers. Try to consult Resume Writing Lab, it contains some great resume tips you can follow to develop an effective resume that connects what you can do with what an employer wants done. Also you can learn how to write good CV and customize it for each and every job, so you'll to improve your chances for getting an interview and potential job.
Posted by Katy J | Thursday, May 22 2014 at 5:58PM ET
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