PLANADVISER - September/October 2018 - 28

Five Keys to Growing Smartly
As your independent advisory firm grows, keep in mind
these strategies for building out a team:
1
Grow based on your business model. Top 100
advisory firm FiduciaryVest in Atlanta aligned its staff
hires with the business model it had established. " If I
had to choose one decision we made early on that I would
attribute our success to, it's that we decided to have a narrow
focus [on fiduciary services] and deep expertise, as opposed
to a broad focus and narrow expertise, " Managing Partner
Philly Jones says. " If you are a real expert and you give clients
white-glove treatment, you can charge more for that, because
what you are doing is not a commodity. "
Likewise, Top 100 firm Strategies Capital Management
(SCM), in Denver, made an early decision not to aim for
being a high-volume shop, says Tom Gonnella, firm president.
" We focus on a high-touch approach with clients, and
most of our new business comes from referrals, " he says.
The high-touch approach has major implications for
building both a team and a book of business. Gonnella
estimates that his average cost on an employee runs 40%
higher than at the typical advisory firm. " That's because we
typically want to hire people with at least 10 to 15 years of
experience, " he says. To make that possible, SCM takes on
no new clients that want to slash its fees. " Our fees are on
the higher end of the scale but still in the range of benchmarks, "
he explains. " If we need to get into a bidding war for
a client, and we don't think that the sponsor will appreciate
the value we bring, that plan won't be a good fit for us. "
2
Prioritize keeping current clients happy. To
offer first-rate service, Top 100 firm LeafHouse Financial
in Austin focused first on bringing in client service
and operations staff, says LeafHouse President Todd Kading.
" The idea is that you need to keep your main focus on your
existing clients, " he says, adding that his firm gets most
new business from referrals. " We decided that if we put our
energies into making sure we never dropped the ball with
our clients, the new business would take care of itself. " Also,
independent firms usually are started by advisers already
having some success in the business. " So they may be the
initial marketers, the initial growth engines, " he says.
Likewise, at Retirement Plan Analytics, which also gets
most new business from referrals, Timmerman prioritized
client service in his initial team-building. " If we serve our
clients well, then we'll get the referrals, and we don't really
need a business-development staff, " he says. " I have not
made one cold call, and we now have 203 clients. I'd rather
invest my money in consultants who work on an ongoing
basis with our clients than in salespeople. "
3
Understand the appeal of an independent
firm. A growing independent advisory firm will often
particularly struggle with hiring good client-service
staff, says Geoffrey White, CEO of GRP Financial, an aggregator
in Carlsbad, California. That is because many of the
most talented people work for recordkeepers and get paid
well at their current job. An adviser can compete with that
by emphasizing the attraction of its independent culture.
" Some client-service people at recordkeepers would
rather not just be a cog in the wheel, " he says. " If you are in
client service at a recordkeeper, you may get assigned to 30
cases, and you do your thing and then go home at the end of
the day. One client leaves, and you get assigned to another.
At an independent advisory firm, you have a much more
emotional attachment to the clients-these are your clients. "
Giving employees autonomy plays a big part in the
culture of Strategic Retirement Partners, an advisory firm
and aggregator in Chicago. " We find that most providers in
the industry are not very flexible when it comes to work/life
balance. We're a family-first culture, and word of that has
gotten around the industry, " Managing Partner Jeff Cullen
says. " It's also a very adult environment here, in that we
don't micro-manage people. There are many in the industry
who are tired of being part of a corporate machine. We hire
smart people and then stay out of their way. "
SCM spent considerable time building a flexible culture
that helps attract and keep good staff members, Gonnella
says. " Our pay and benefits are both above the norm
compared with peer advisory firms. We don't have a set
number of PTO [paid time off] days, and I let employees
manage that themselves. We also have a total rewards
program that lets them pick out experiences they want to
engage in, whether it's a gym membership or a massage. "
Build a team that provides balance. Good
advisers usually have some key traits in common,
but a solid team should have a mix of personalities.
" [Advisers] are very friendly and amicable, " Cullen says.
4
" They are relationship-builders and trust-builders. But those
are not the same people who should be in charge of operations
and processes. Those tend to be two very distinct types
of people. If an adviser tries to do that [detail-oriented] work,
he'll spend lots of time doing things that he doesn't want to
do and he's probably not very good at. "
Early on, Kading and LeafHouse CEO Neal Weaver realized
that they are more change agents than systematic
followers of established procedures. But they also recognized
that the latter is crucial in a retirement plan advisory
practice.
" Many advisers think that if they want to grow in more
than a straight-line method, they need to find a way to
essentially copy themselves in hiring people, " Kading says.
" But we've realized that,
in the operations area, we need
people with an M.O. that says, 'I'm going to maintain the
systems, maintain order and push back on unnecessary
change.' Because I'm someone who has a need for change, if
I'm left to my own devices, I may make changes that aren't
necessary sometimes. "
5
28 | planadviser.com September-October 2018
Know how to leverage yourself best. Kading
and Neal have adopted management approaches
recommended in the book " The E Myth: Why Most
Small Businesses Don't Work and What to Do About It, " by
Michael Gerber. " He always says, 'Work on your business,
not in your business, " Kading observes. " So, Neal and I don't
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