Where advisors fail as managers

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LAGUNA NIGUEL, Calif. — Advisors who become hyper focused on client relationships may forget the responsibility they have to their employees.

“If you have no idea what the capacity of your people are, you are actually stunting your growth,” said Vanessa Oligino, director of RIA practice management at TD Ameritrade, who was speaking at the firm’s Elite conference.

Firms spend only .03% of their annual budget on initiatives to boost commitment and dedication, said Oligino, citing TD Ameritrade Institutional’s recent FA Insight study. This can have long-lasting ramifications. About 27,000 advisors switched firms last year — almost one-tenth of the overall advisory industry, according to Cerulli data.

To keep new hires engaged when they walk in the door, make sure they have meaningful work.

“I think we forget what it was like when we were the associates,” said Marianela Collado, co-owner of Tobias Financial Advisors, a $330 million RIA in Southern Florida. “From day one our associates are in meetings because I want them to own the relationships.”

There’s a fine line between challenging employees with exciting new projects, and overwhelming them, however. When that line is crossed, it might be time to hire someone new.

“We built capacity models,” said Justin Young, CEO and Partner of BCJ Capital Management, a firm that helps independent advisors scale businesses. These models allow managers to scrutinize each role and say, “‘How much can somebody do in each of these roles based on labor and time of day?’”

When an employee reaches 80% of full capacity, it’s time to start looking for another set of hands. Pay heed: “The talent pool is [making it] more and more difficult to find the right hire,” Young said.

Use compensation to incentivize as well as inspire, Collado advised.

“We have tied in their compensation to their goals,” Collado said. This helps employees feel they are contributing to their own success, as well as the firm’s growth. Managers should help them make that connection. “Often, people don’t understand how the specific projects they have are contributing to the bigger firm goal,” Oligino said.

Fun activities, like company trips, can boost engagement and satisfaction as well.

Devin Wolf, CIO of $466 million RIA Financial Plan, took his entire staff to Hawaii in June to compete in Survivor-themed challenges. “We had all sorts of games based on clients and policies and procedures,” he said.

Finally, don’t forgot to look ahead. Far ahead. Consider making team members part of the firm’s succession plan. This helps lay the groundwork for a sustainable practice, while benefiting clients and motivating employees.

“My clients know that even if I’m here at a conference, then they have someone else to talk to,” Wolf said.

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Succession planning RIAs Client strategies Professional development C-suite Employee retention TD Ameritrade Cerulli Associates