Robert Schmansky has been running Clear Financial Advisors, his solo practice in Livonia, Mich., for about four and a half years. Now he’s in a quandary about how to manage his growth—and his time.
Since he updated his website about six months ago, inquiries from prospects started shooting up to three-to-five prospective clients a week. Business from ongoing fee-based wealth management clients, many of whom are young professionals, now equals what he generates from hourly or per-project fees. But those wealth management clients require “a lot of personal touches,” and a lot of time, Schmansky says. He manages about $10 million in assets; the average account size is about $750,000.
As for his other clients, who mostly come through the Garrett Planning Network, Schmansky suspects he’s been under-charging, but fears losing out to competitors if he raises his rates. Not an unwarranted fear: Some prospects have pushed back when he’s quoted higher fees.
The demands have started to become too much to handle, particularly as he has no assistance. For example, Schmansky works from home, holding client meetings at a space where he rents a conference room. “I step out for a couple hours and then get hit with all the day-to-day things,” he says. “I feel like it’s affecting client service.”
Should he get a part-time assistant? Move to a regular office? Raise his project fees or hourly rates? Our panel of experts weighs in.
Daniel Finley
President
Advisor Solutions
Yes, he should get an assistant. If he doesn’t, it will stymie his growth. But he needs to be clear about what he should do and what the assistant should do. If he doesn’t think about the exact role, he’s going to hire the wrong person.
And he needs an office, if only space in an executive suite. First, he should have a place for his assistant and for his clients to meet him. But it’s also rare for someone working from home to take the business to the next level, because you’re running around to other people’s homes or businesses. And the client thinks, why do I want to work with someone who doesn’t have an office?
As for fees, he should raise them, but he has to explain what value he’s bringing. If he’s getting pushback on fees, it’s probably because he hasn’t explained his value proposition.
Matt Lynch
Managing Partner
Strategy & Resources
He needs to focus on defining his business plan, what the optimal client looks like, where he wants the business to be three years from now and align his resources in support of that strategy. That starts with the role he needs to play, the tasks only he can perform. Then he needs to either hire somebody to help with the administrative burden, or outsource part of it. It may be he doesn’t have enough business to hire someone to work just for him. But he can find another advisor who can share some of the office and administrative expenses.
He’s juggling too many balls. It might make sense to go in one direction and be very good in one type of market with one service offering.
Brandon Odell
Director of Business Consulting
The Ensemble Practice
He can still continue working out of the house with an assistant. Still, if you want to be a firm with growth potential, it doesn’t hurt to act like it and have an office. He can sublease a small space from someone else.
I agree that he needs to raise his fees. But they have to pay for all his other expenses, not just the time working on the client. So it means he needs to be very diligent in how he manages his time.
He also should do a benchmark of the fees other advisors in his area charge. If he’s on the high end, he needs to offer services by which he can differentiate himself. Then he should communicate to clients what he delivers, so they understand his value. He could charge an annual retainer that includes the ability to contact him for the rest of the year, extending the service from a single project to project-plus.
