Coaching and consulting hundreds of advisors over the years has allowed me to see several industry trends and lump advisors together into various buckets. One of these “buckets” is advisors who view human capital, technology, office space, coaching programs, etc., as an investment versus a cost. Advisors who view these areas as costs tend to experience less success and grow their business at a slower rate.

So, when investing in human capital, how do successful advisors get a great return on their investment? They understand their investment in human capital is made to achieve one of these three goals:

  1. Better Client Service – improve client service levels and the client experience.
  2. Higher Efficiency – increase the efficiency of the entire practice as a whole.
  3. More Time – free up the advisor’s time to do more advisor-related activities (i.e., grow the business).

Every time an addition is made to your team, have complete clarity on what exact duties this new person will assume and how this addresses the three goals mentioned above. Think about it in these terms:
Your team is there to be responsible for all of the service, operational, and administrative functions –things that you, as the business owner/advisor, should be delegating to your team. If you have a great team that performs all these things well, it is now completely on your shoulders as the business owner to grow the business. You have no reasons/excuses for not growing the business because all of your time is now available to do advisor-specific items like strategic thinking, money management, financial planning, pursuing your passions, and generating new business.

Once you have this team in place to do the service, operational, and administrative functions, be sure to compensate them for the behavior you desire. Remember, you want better service, a more efficient office, and more time to do the things you need to. So, connect your compensation plan, specifically your bonus structure, to getting more of the performance you want. Implement a pay-for-performance model (Peak Advisor Alliance calls this Results-Based Pay) that rewards and recognizes the team on the things they can control. The team can not directly control the markets, portfolio returns, new business you close, or the overall revenue you generate. But, they can control the service to your clients, efficiency of the office, and keeping your plate clean. Incentivize them on the tasks they can control.

Meet with your team and explain they now are in control of their bonuses. Bring examples of goals to the meetings and ask them to do the same. These examples should correlate with items that can be put into one of the above three areas. Assign a dollar amount to each of the goals. Pay out the bonuses based on achievement of the goals. We have dozens of suggested goals. Here are a few to illustrate the value:

  1. The client service satisfaction score from your client survey.
  2. The number of Random Acts of Kindness completed for clients.
  3. The percentage of implemented items in the various sections of a systems manual.
  4. The implementation of new client touches such as birthday calls, anniversary calls, weekly or monthly communication pieces, proactive outbound calls, etc.
  5. The incorporation of items currently done by the advisor into the team’s responsibility.

Everyone agrees that hiring a great team is crucial to growing your practice. It may be the single biggest reason for your success… or lack thereof. So, I suggest when making this investment, be clear on what you want accomplished. Often times your additional hire will contribute to all three of the above goals. However, some advisors in larger practices are hiring personal assistants that essentially do nothing but keep the advisor’s plate clean.
Allocate some time to take a cold, objective look at your practice, and evaluate the level of client service, the efficiency of the practice’s systems and workflows, and your overall productivity/use of time as an advisor. My guess is you will find some valuable investment opportunities – maybe even better opportunities than the equity markets in March 2009!

Ask yourself how much you would invest to have your client satisfaction score go from a 3.8 to 4.8 on a five-point scale, or to have your clients go from fair-weather advocates to raving fans.

How much would you invest to have an office so efficient you never/rarely have a trading error… miss a RMD… forget a birthday or anniversary call… drop the ball with new client paperwork and asset transfer processes, etc?

And, how much would you invest to free up six, eight, or maybe 10 hours of your time each week to spend with your spouse/family, pursuing your favorite passion, or maybe simply growing the business?

One of the best investments you will ever make for your practice is hiring the right people. So, where do you start? Start with downloading the Peak Advisor Alliance Hiring Process Checklist. Go to, click on the Free Tools tab, and enter the code “Hire” in the appropriate field to receive this checklist which will guide you through the process of building your team. This document will help ensure you have complete clarity on why you are hiring them. And remember, communicate those reasons to your new hires and compensate/incent them on the things you want more of: better service, more efficiency, and more time!

Ron Carson is founder and CEO of Carson Wealth Management Group, a comprehensive wealth planning firm, and founder of Peak Advisor Alliance, the largest advisor coaching program in the country. He also co-authored the practice management book Tested in the Trenches: A 9-Step Plan for Building and Sustaining a Million-Dollar Financial Services Practice and its revised second edition Tested in the Trenches: A 9-Step Plan for Success as a New-Era Advisor.

Greg Opitz, an Executive Business Coach at Peak Advisor Alliance, contributed to this article. He consults and coaches financial advisors across the country, helps them implement the proven tactics and strategies taught by Peak Advisor Alliance, and has been working with financial planners for his entire professional career. Greg's 17 years of managerial experience is drawn upon everyday to assist coaching members.


Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access