As they age, many advisors strive to make their firm sustainable over time. They want their business to outlast them — to provide ongoing service to generations of clients to come.
XThat's easier said than done.
For a firm to outlive its founder, several elements must be in place. A pipeline of rising advisors builds relationships with clients and their families. A team of loyal employees develops their skills. And the business itself continues to evolve with the times and stays one step ahead of the curve.
Sustainability rarely occurs by accident. For firms to stay the course, their leaders take steps to foster a cohesive organizational culture and create reliable internal systems.
"I'd like for my firm to live beyond me and continue on," said Kristin Bartlow, a certified financial planner who joined Northwestern Mutual in 2009 when she launched her Walnut Creek, Calif.-based business.
As her firm grows, Bartlow is getting a better sense of what constitutes a sustainable business. She says that by focusing on three aspects of her practice, she can lead it in the right direction: hiring the right people, choosing the right niche and putting the right processes in place to maximize client service.
"The value of a practice really comes down to the people you invest in, the clients you target and the processes and procedures you set up," Bartlow said. She adds that the last piece — creating consistent, repeatable processes — plays a particularly critical role.
For example, she has established a 30-step onboarding process for new clients that begins at the initial point of contact and advances through a series of follow-up communications. Her goal is for every incoming client to enjoy the same seamless experience, which in turn leads to heightened satisfaction and thus more referrals.
A Culture That Sticks
Perhaps the most important variable in determining a firm's sustainability is its culture. Advisors who nurture a warm, welcoming workplace and encourage openness and camaraderie produce more driven, engaged employees.
For Bartlow, creating a shared culture of excellence begins as soon as newcomers arrive.
"Our team knows our mission and vision when they come into the firm," she said. "And we start each team meeting by stating our mission and vision. Everyone has it memorized at this point. People internalize it."
Every quarter, Bartlow facilitates an off-site retreat for all eight of her employees. They collaborate to set the agenda and cover a range of topics tied to long-term business strategy. They also discuss goals related to professional development, client retention and production.
Advisors who founded their own business often find that part of the challenge of building a sustainable firm is stepping back. Given their experience and expertise, they may be tempted to micromanage every aspect of the practice. But that inhibits a firm's growth.
"I'm not involved in every step of the process," Bartlow said. "When something is run past me, now I'll ask, 'What do you think?' as opposed to telling them what to do."
Delegate To Grow
When advisors can groom their adult children to run the business, continuity gets easier. Developing an effective succession plan paves the way for a smooth transition after the founder retires.
Gary Schwartz, an advisor in West Harrison, N.Y., launched his firm in the 1990s. He has grown the business to 18 people, including his two sons.
"I've integrated them into working with clients," Schwartz said. "People are really happy about that, and having both of them here makes the business sustainable."
He admits that he used to drop gentle hints for his sons to join the firm, but he didn't put pressure on them. He wanted them to feel comfortable navigating their own career choices.
"I love what I do, but you can't force your kids into things that don't come naturally to them," he said. "They had to like it. I didn't want them to get stuck here" and regret their decision to sign on.
As his sons were growing up, Schwartz invited them to accompany him to his public seminars and client meetings. He wanted to demystify what he did for a living and spark their interest in financial planning.
Delegating also increases the odds that your business will outlast you. By training employees to expand their job duties, you can gradually step away from the day-to-day operation.
"A lot of my clients who need something don't need to talk to me," Schwartz said. He has empowered his team to make a range of decisions from operational systems to portfolio management.
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The post Advisors Take Smart Steps To Ensure That Their Firm Outlives Them appeared first on Investor's Business Daily.
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