Deciding that you need more help

Running a growing practice can be exhilarating — until you have to add personnel to keep up with the work.

Most financial advisers walk a fine line between the tasks at hand and the resources needed to get the job done. Knowing “when to say when” and hire more people is critical.

A standard way to determine the optimal assets-to-staff ratio would be ideal. Unfortunately, such a formula doesn’t exist.

Advisers must continuously re-assess their practices based on client feedback, how many hours there are in the day, and the work that has to be completed.

Most times, advisory practice productivity can be improved by hiring a part-time support person, someone whose responsibilities can be as basic as answering telephones or as complex as placing trades, assuming that the person is licensed.

Employing a part-timer often translates into an immediate productivity gain. Phone calls no longer interrupt client meetings, and the time you spend filing and processing paperwork drops sharply.

Although such a job is part-time, you must hire someone who is able to handle the pressure and diversity of your tasks.

Let’s look at some real-life examples of hiring practices.

John, based in the New York area, and Sal, located in western New York state, have been friends for more than 20 years. Their client bases have grown at a steady, similar rate, and they have almost the same assets under management.

Yet John has three office assistants, and Sal has one. John wonders whether he could use less staff if he delegated more effectively, while Sal wonders if his practice would grow more quickly if he hired another assistant.

Both are pleased with their growth rate and report that their clients are happy, but are curious about their staffing discrepancy.

If John and Sal had job descriptions for each assistant, they would be able to identify their staffing differences. By defining the projects and tasks a person in a specific position must accomplish, an adviser can:

• Know who is doing what and easily find answers to clients’ questions.

• Transfer responsibilities in an unpredictable situation. For instance, if Tom were to have a family emergency, Jen could pick up without wasting time sorting through documents or reading e-mails.

• Create efficiency for the individual fulfilling the role, because nothing wastes more time than juggling miscellaneous tasks without a degree of routine. The purpose of the assistant is to free the adviser to focus on larger issues.

• Prevent operational “silos” that occur when one person does just one thing that no one else can do. Make sure that several people can complete a specific task.

When John and Sal compared their client demographics, they discovered that John had fewer clients with more assets, while Sal’s more numerous clients each had less money. John’s high-net-worth client accounts required more monitoring and maintenance than most of Sal’s smaller accounts.

This allowed Sal to provide a good level of service to all his clients with the help of just one assistant to record meeting notes, file paperwork, answer phones and schedule appointments.

Meanwhile, John has one assistant dedicated to answering phones and scheduling, while the other assistants — who were licensed — are able to monitor portfolio activity, place trades and even talk to clients about their investments. His higher-net-worth clients have complex portfolios that require more-attentive service, while Sal’s clients contact him less frequently.

With this information in hand, Sal overhauled his practice. He decided to eliminate some of his smallest accounts because the revenue they generated wasn’t worth the time they required.

Sal would use that time instead to focus on larger accounts, which could grow if they received more attention. To free his time for additional relationship management, he hired and cross-trained a detail-oriented assistant, and created job descriptions for each assistant.

Having job descriptions had an unusual effect on the business.

“It was as if having the criteria on paper put us in high gear,” Sal said.

Within 18 months, his assets under management had increased by 15%, and he feels confident he can grow another 10% next year —more than justifying the expense of the additional staff.

If you recognize your breaking point, you may be able to make the leap to a larger, more efficient practice.

Susan Cook is an assistant vice president and marketing manager at Cadaret Grant & Co. Inc. in Syracuse, N.Y.

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