There was a time when I nearly left the financial services industry to become a doctor. I was five years into my career, and despite my best efforts, I felt I could not grow my business. There was a theory back then 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 and $2 million. My salary was hardly close.
It turns out administrative tasks blocked my progress. I could meet with clients for 40 hours a week, but every meeting would require additional hours researching investments, filing paperwork, making appointments, etc. It was an untenable equation.
Relief came via a four-person support team with very specific roles. I call this solution the “$50-million team” because it is instrumental for financial advisors to gather $50 million in new assets yearly. 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 creating the $50-million team:
New Business Processor. Responsible for onboarding clients and managing account transfers and paperwork. Attention to detail and organization are key skills for this position.
Appointment Setter. A person who can keep the appointment book full by spearheading and managing client prospecting events, including workshops and seminars. This role also ensures you are connected to centers of influence, including CPAs and attorneys who can provide referrals. You can spend more time meeting with clients by offloading your lead-generation efforts to another role.
Client Service Advisor. Manage administrative tasks. A licensed individual in this role can also support portfolio reviews and discuss accounts and investments with clients.
Receptionist. This role manages the front desk and other daily operations. It also supports the other three individuals and can drive operational efficiency.
Key Characteristics
There is no priority order for hiring the four team members, but two key factors must be considered before making the first hire. An advisor must be ready to delegate responsibilities. An inability to relinquish some operational control saps the value of having support staff.
The first hire must 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.
An advisor’s second hire needs to have strong people skills and possess opposite but complementary strengths of the first hire. This will help maximize efficiency. Both hires must also demonstrate a willingness to help the firm grow. That seems obvious, but not everyone possesses the same level of ambition.
Challenges to Overcome
As previously mentioned, the ability to delegate is crucial to implementing the $50-million team. It’s counterproductive to hold onto every role, and doing so will limit your growth potential. There’s also the risk of burnout.
Businesses thrive when leaders are willing to delegate; otherwise, everything stagnates. It’s also an important trait for team members. Everyone should collaborate and delegate. I have found success with the 80% principle, which states it’s time to delegate when a team member can do something 80% as well as you.
Advisors should avoid the temptation of hiring an assistant for a team member. The first hire should be able to grow into their role without needing to manage another person.
As much as advisors want to do everything, time and resources are limited. Leveraging your time is key, 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 sound investment. While some may balk at the initial cost of bringing someone else on board, if it frees you up to generate 10 times your current production, it’s undeniably worth it.
David Scranton is founder and CEO of financial services firm Sound Income Group and author of the upcoming book “Attract & Grow: The Financial Advisor’s Blueprint for Attracting $50 Million in Annual Assets.”
