There was a time when I almost left the financial services industry to become a doctor. I was five years into my career and despite my best efforts, I felt like I couldn't grow my business. There was a theory at the time that an hour of an advisor's time with a client was worth $500 to $1,000. If true, an annual salary would be between $1 million and $2 million. My salary was almost there.
It turns out that administrative tasks blocked my progress. I could meet with clients for 40 hours a week, but each meeting would require additional hours to research investments, submit documents, make appointments, etc. It was a volatile equation.
Facilitation came through a support team of four people with very specific roles. I call this solution the “$50 million team” because it is critical for financial advisors to raise $50 million in new assets each year. It can't be implemented overnight because it takes time to identify the right people and money to support their salaries, but it can be done.
Meet the Team
There are four key roles in building the $50 million team:
New business processor. Responsible for onboarding customers and managing account and document transfers. Attention to detail and organization are key skills for this position.
Date setter. A person who can keep the appointment book full by leading and managing client research events, including workshops and seminars. This role also ensures that you are connected to centers of influence, including CPAs and attorneys who can provide referrals. You can spend more time meeting with customers by offloading your lead generation efforts to another role.
Customer Service advisor. Manage administrative tasks. A licensed individual in this role may also support portfolio reviews and discuss accounts and investments with clients.
Receptionist. This role manages the front desk and other day-to-day operations. It also supports the other three individuals and can drive operational efficiency.
Main features
There is no priority order for hiring the four team members, but two key factors should be considered before making the first hire. An advisor must be willing to delegate responsibilities. The inability to relinquish some operational controls reduces the value of having support staff.
The first hire should also be meticulous and detail-oriented so the advisor can focus on high-value activities that generate additional business. Ideally, the first hire will create efficiencies and lead generation to support a second hire.
A consultant's second hire should have strong people skills and opposite but complementary strengths of the first hire. This will help maximize efficiency. Both employees must also demonstrate a willingness to help the firm grow. This seems obvious, but not everyone has the same level of ambition.
Challenges to overcome
As previously mentioned, the ability to delegate is essential to the implementation of the $50 million team. It's counterproductive to hold on to any role, and doing so will limit your growth potential. There is also a risk of burning.
Businesses thrive when leaders are willing to delegate; otherwise, everything stalls. It is also an important trait for team members. Everyone must collaborate and delegate. I've found success with the 80% principle, which says it's time to delegate when a team member can do something 80% as well as you.
Advisors should avoid the temptation to hire an assistant for a team member. The first hire should be able to grow in their role without having to manage another person.
As much as counselors want to do everything, time and resources are limited. Leveraging your time is essential, but it will require a CEO mindset.
Consider this: If hiring someone for $100 an hour (equivalent to $200,000 a year) allows you to make $1,000 an hour, then it's a good investment. While some may balk at the initial cost of bringing someone else on board, if it frees you up to generate 10x your current output, it's worth it without a doubt.
David Scranton is founder and CEO of financial services firm Sound Income Group and author of the forthcoming book Attract and Grow: The Financial Advisor's Plan for Attracting $50 Million in Annual Assets.