If your advisory firm has plateaued these New Year’s resolutions might help

If you are the founder-owner of a wealth management firm that seems to have plateaued, 2017 may be a pivotal year for your firm. You need to make considerable progress in 2017 to give yourself a chance to make your vision a reality. Your vision is to transform your firm into an enduring, generational business that outlasts you, the founder, as a viable and thriving firm for generations of clients served by generations of advisors/owners.

While the prospect of growing a business is exciting to be sure, the sobering reality is that the window of opportunity is limited as you inch closer to age 60. Ideally, in five years or so, your firm will have transformed into a business that is no longer founder-centric, with all the attributes of top performing firms. Additionally, organically doubling your current AUM in five years is a meaningful goal as well as a significant milestone.

But without a laser-sharp focus on executing your plan, 2017 will pass you by — then 2018, and then 2019 — with little progress. (You’ll only grow one year older.) As such, you should plan to make the most of your time, set things in motion and move things along at a brisk pace.

To this end, there are five things you can commit to doing this year that can bring about real results and help you make meaningful progress toward your vision.

Commit to delegating non-essentials tasks

When each of your team members performs his/her own job at the highest level, your firm performs at its highest level. As Bill Belichick famously uttered, “Do your job,” you should do your job and let others do theirs. Chances are, they can do their jobs better than you can. They know this too, but they won’t tell you because they are too polite.

One of the most common, yet often unrecognized, management faux pas is delegating responsibilities without delegating authority. Thus, delegating responsibilities to your capable team members entails delegating authority to them as well, including decision making authority. You cannot have one without the other. Without both — responsibilities and authority — they will be limited in their ability to carry out their duties effectively and expeditiously. So go ahead, empower them, trust them and give them autonomy to do their jobs and do them well.

I like what Ric Edelman wrote, “The key to building a successful practice is simple: hire great people, make sure they understand the firm’s mission, give them the tools they need to succeed. Then get out of the way. That’s it.”

Make important decisions decisively

I’m broadly generalizing here, but I venture to guess that your primary job is (or should be) to be the best advisor and rainmaker you can be, and delegate the rest to your team members, including most of the daily chores of running the business. That said, you are also a business owner, so you cannot escape management responsibilities altogether.

What exactly are your management duties? Simply put, it’s making important decisions. Specifically, you should make decisions decisively in a timely manner, and stay committed to your decisions without wavering. Some decisions are easy to make while others require thoughtful reflections. Whatever the case may be, do make them in an appropriately timely manner if you want success for your firm because if you don’t, your non-decision is also a decision in itself with its own set of consequences — one obvious one being opportunity costs.

Remember also that without your decisions, your team members’ hands are tied. Your inertia prevents them from moving forward. It immobilizes them and slows them down.

Make important decisions rationally

You should make decisions not only decisively, but rationally as well.

If you want your firm to transform from a practice to an enduring business, you have no choice but to embrace change. You cannot avoid change and expect different results. You either change or you don’t. You either transform or you don’t. But you cannot do both.

Running your firm like a business (vs. practice) might make you feel like you are losing control of the business. Perhaps you won’t always be the smartest guy/gal in the room anymore. You will definitely have to learn and adopt new software and follow process just like everyone else. Inevitably, it will force you to share the spotlight with other team members. But let’s remember that feeling like you are losing control is entirely different from actually losing control.

Try not to let the prospect of losing your status as the king (or queen) of the hill cloud your judgment. Change is inevitable. If you want to run your firm like a real business, you have to think and act like a real executive. That includes making rational business decisions, even if it feels unnatural like trying to write with your non-dominant hand.

To be sure, your firm is your life’s work filled with hard work and sacrifices. Your employees have no idea what it took to bring your firms to where it is today. Paradoxically, you multiply by letting go and lose by holding on tightly. You cannot afford to stand still if you want your firm to remain competitive as a generational business. You firm — your baby — is not a child anymore. It’s grown up. It’s time to let go.

Commit to fully aligning with your firm’s strategic direction

The importance of your leadership group being in alignment with your firm’s strategic vision cannot be overstated. It directly impacts your team members’ daily work. If you clearly articulate and align with who you are, why you exist, what business you are in, who your customer is, where you are going, how and when you will get there, it becomes easier for your team members to get a feel for how they can daily contribute to the success of your firm. They will be more engaged with a stronger sense of purpose. The clarity will enable everyone to row together in unison.

Conversely, lack of clarity and alignment will result in your employees lacking focus, direction and purpose. It’s just another day at the office.

In a way, your firm’s success is a consequence of your united, collective effort — a culmination of well-coordinated, cohesive activities. The clarity of your strategic direction — and a strong teamwork and culture that result from it — will make your firm a fun place to work.

Set the tone

Closely related to being in alignment with your strategic direction is setting the right tone for your firm. In particular, you, as a leader, should strive to create a positive and optimistic atmosphere — even when you don’t feel like it. You should communicate regularly and often about your firm’s future and how you will achieve your goals. Your optimism will give your team members a sense of purpose, help them remain positive while they persevere through the daily grind.


Elliott Bay Advisors

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We help founder-centric financial services firms transform from practices to enduring businesses with transferable enterprise values. www.elliottbayadvisors.com