The Two-Way Street of Advisor Recruiting

The Two-Way Street of Advisor Recruiting

By Ryan Shanks, Co-founder and CEO

For the last 20 years, I've worked as a recruiter for financial advisors under the sole belief that building a winning team can happen only when the firm and the advisor are committed to providing equal value to one another.

Unfortunately, not all advisory firms think about recruiting in this way. Some are understandably so concerned with their bottom line, that they mistakenly approach hiring as a one-sided solution to solve their growing pains.

A Two-way Street

I sit as the driver on both sides of a two-way street, so when I hear these one-sided search queries, they usually bring me to a screeching halt. Why? Because they're all rooted in the notion that the firm holds all the value, and the advisor is just another pawn in the game to stay competitive.

These companies approach the conversation saying, "We've built this amazing business model. We want to bring people in so they, too, can see the value of what we've created!" The problem with this notion is that value is completely subjective, and if you view the entire advisor landscape as interchangeable solutions to raise your profit margins, you'll just end up creating a revolving door for your advisors.

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A Success Story

I can assure you that when a firm finally shifts their perspective to providing value for the advisors, the result is a win-win for everyone involved.

Years ago, I worked with a California-based RIA who'd grown from $350 million to $1.4 billion in AUM within an 18-month period. They'd done so by fostering a "Wild West" type business model. Their main proposition for advisors was that they could keep doing what they were doing - no structure, all of the flexibility.

There's a reason the Wild West eventually straightened out. You can't sustain it. As this firm began to grow, so did their inefficiencies. We decided together that they needed to change their business model if they were ever going to scale and hire the right people. "But, we just promised our advisors they could have autonomy over their processes! What if they all leave?" A relevant concern, but without action, the firm could never grow into a long-term healthy business.

The principals spent time restructuring the model based on the scalable value they'd be able to provide each one of their advisors. While some weren't happy with the changes and inevitably left, many understood the need for change and appreciated the commitment this firm had to their own individual growth. The moral is: when you focus on the value for the advisor instead of the rapid growth of your firm, and stay true to that value-add, you'll evolve in ways that support a long-term vision rather than an immediate fix.

Knowing your value

You already have the vision for the future of your firm. You just need to refocus your recruiting efforts to build a team that will keep you profitable, competitive and innovating - and then shower that value back onto your team.

Your firm's dream team is out there, but it's about repositioning your hiring objectives and shifting your point of view. If you hire for the firm of tomorrow instead of the firm of today, you'll always find success.

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