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Getting to the Next Level with an Associate Advisor

StratiFi Technologies Inc

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Anyone with an ambition of getting to the next level and beyond is bound to reach a critical juncture when they realize that what got them to where they are isn’t enough to propel them further. As a financial advisor, you probably reached that juncture several times – when you realized cold calls weren’t enough to get you in the markets you wanted; when you realized you didn’t have the knowledge to get in front of business owners or high net worth individuals; or when you realized you were spending as much time doing paperwork as you were meeting with clients.

In fact, every independent advisor goes through stages of growth that eventually meet up with a capacity wall where he or she is unable to handle more clients. Even with today’s technology that allows for incredible efficiencies and leveraging our individual productivity, there comes a point when bringing in new clients gives way to the necessity of client service, back office work and plan preparation, all while spending the necessary time keeping the funnel full.

It’s All About Leverage

In the world of business or investing, when assets reach a point of diminishing returns, their best use may be in the leverage they can create to expand their capacity to generate returns. So, how does one leverage experience and knowledge? Through duplication. By downloading your years of experience (lessons learned, best practices, etc.) and knowledge onto another individual who shares your traits, characteristics, vision, and ambitions, you expand your capacity to generate returns. That individual benefits from your experience, knowledge and the support you provide to make him successful; you benefit from the additional revenue he or she generates, which help you break through the capacity ceiling.

Hiring an Associate Can be so Right – but so Much can go Wrong. Learn why Click To Tweet

Most advisors need access to tools and processes for creating efficiencies, improving lead generation, finding new markets, or making more compelling presentations. Those are ways to get to the next level in the early stages of the business. For advisors who reach a certain level but can’t seem to break through the next growth barrier, they need to consider bringing on an associate advisor.

Hiring and Associate Can be so Right – but so Much can go Wrong

For the right advisors, in the right circumstances, and who do it right, hiring an associate advisor can be their very best investment. However, it can also be their most costly mistake. Too often advisors attempt to bring on an associate only to have the venture blow up in their face. In some cases, the advisors weren’t prepared – didn’t have the necessary pieces in place to quickly or effectively transition someone into the business. In other cases, advisors didn’t think through the compensation plan, driving their associates into the arms of their competitors. In far too many cases, the advisors simply didn’t hire the right person because they didn’t really know what they were looking for.

Done right, hiring an associate advisor can lead to more revenue and a clear path to growth. Learn how to do it in this post Click To Tweet

Done right, hiring an associate advisor can increase the capacity of an advisor to generate revenue and clear a path for growth not otherwise achievable. By leveraging your experience and knowledge into the development of an associate or two, you also leverage your time, which can be used for pursuing your business or personal passions. The upside potential is tremendous; however, with the investment of time and resources required, the stakes are high.

The Next Level Solution

Advisors who successfully bring on associate advisors report significant gains in efficiency, productivity and profitability. In a study conducted by TD Ameritrade Institutional, it was found that firms with an associate advisor earned 44% more income per owner and added clients 15% faster than firms without.

Of course, it does require significant time and resources to find and develop the right person, but the payoff can be a large multiple of the investment.  Among the benefits advisors reap from hiring associate advisors are

  •        Increase their capacity to see more people
  •        Create multiple income streams
  •        Allow them to focus on larger accounts while delegating smaller accounts
  •        Reduce the stress of having to bring in 100% of the revenue
  •        Spend more time on marketing and promoting the brand
  •        Free up time to pursue a passion or develop a unique ability
  •        Achieve a healthier work-life balance

Preparing for the Next Level

What advisor doesn’t aspire to own a self-sustaining business, one that produces revenue regardless of whether they’re in the office or away on vacation? However, wanting it and being in a position to make it work don’t often reside in the same reality. Associate advisors are like rocket fuel for your business. Handled properly they can propel it forward; but, if poorly handled, they can create an explosive disaster.

There are a number of factors that have to be considered even before making the necessary preparations for onboarding an associate advisor, starting with having a clear purpose for hiring one in the first place. Understanding why this individual is being brought into the business is the first step, which includes clearly defining how the individual will contribute to the business and having clear expectations for the immediate and long term.

Akhil Lodha Author
Co-founder & CEO StratiFi Technologies

Building the industry standard for understanding portfolio risk through cutting-edge technology at StratiFi.

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