40 INVESTMENT ADVISOR NOVEMBER 2020 | ThinkAdvisor.comfor the owner advisor to overreact andfocus all their energy, attention andcompany resources on improving clientservice, when in fact there may be noreal challenge with service. This shift,when it occurs, becomes a major detriment to business growth.
BALANCING THE COURSE
Many business leaders, coaches andconsultants talk about “staying thecourse.” But leadership of any businessis more about balance than anythingelse, especially in small businesses suchas RIAs. For RIA leaders to change theirbehaviors and thus lead their businessesto better growth, they must begin to balance leadership efforts across five coregrowth levers: client service, operations,human capital, sales and marketing.
• Client Service. Most RIA firms donot sell a product, like mutual funds orlife insurance, but they do sell a product,nevertheless. In the advisor’s case, it istheir service experience. Client servicemay encompass financial advice, investment management advice, financial planadvice or other areas that touch on a client’s financial lifestyle. The client experience is your most valuable product,and consistency of experience is themost important function of building andsustaining advisory firm growth.
• Operations. A firm’s operationalprocedures define how it gains the ability to produce and repeat what theysell — its process. This process is thebehind-the-scenes work that is done tocarry out the client experience, wealthmanagement process, financial plans,or another area entirely. For RIAs, thiscategory includes both the operationsand technology — meetings with clients,email and phone conversations, digitalinteractions through a website or clientportal — and the experience of workingat a firm, such as the training process fornew employees.
• Human Capital. Investing in the
growth and training of a firm’s employ-
ees is categorized under operations,
because those actions are tied to repeat-
able processes that must be carried out
in the client experience. Human capital,
on the other hand, is concerned with
the compensation and incentive struc-
tures, benefit programs and partner-
ship incentives that help retain talented
employees and give an advisory firm an
advantage in hiring new team members.
• Sales. Sales is all about influencingpeople to believe in what you provideand building a culture of trust. In aproduct-based business, that influencemay be done through physical packaging, such as box design, but in a service-based RIA firm the trust is generatedthrough what you say that you will doand how you do it for a client. This alsoincludes how you talk about your clientexperience, share it with others andwhat employees and clients say aboutyour firm.
• Marketing. A firm’s marketing is
associated with aspects that support its
sales and client service. It is the ability to
use tactics and strategies, such as email
campaigns, blogs, social media, pod-
casts and more to attract people to your
services. Marketing tactics vary widely
from firm to firm, but the ability to
sustain them and continue doing them
repeatedly will be what determines the
growth of new clients.
When a leader doesn’t know whereto focus time and attention among eachof these five areas at particular times inthe growth cycle, the result is a stagnantbusiness and compounding problemsacross their firm.
The goal of future RIA growth isbecoming more focused on balancedgrowth than on stay-the-course growth.As RIAs continue to expand, grow anddominate local and national markets,we will see firms with leaders whosebehaviors focus back on the core fundamentals of business growth winningmarket share.
Angie Herbers is an independent consultant tothe advisory industry. She can be reached firstname.lastname@example.org.
For RIA leaders to change their behaviors
and thus begin to lead their businesses
to better growth, they must balance their
leadership efforts across five core growth
levers: client service, operations, human
capital, sales and marketing.