4 top planning needs for sophisticated advisory firms

Over the past decade, financial services firms have experienced a continual evolution in terms of the sophistication of their clients and services and, perhaps more importantly, their business models. In the independent channel, we’ve seen solo advisers evolve their firms into partnerships and ensembles, while many larger firms have developed into true enterprises, with unique planning needs of their own.

Often, business transitions like these are driven by specialization in a niche, the need to expand expertise and resources or the desire for greater scale and efficiency, which can come from joining forces. But how should you organize, develop and manage operations to help ensure your continued success as you evolve? 

GOING STRAIGHT TO THE SOURCE

Commonwealth’s practice management team has started working with some of our larger firms — those with a dedicated chief operating officer or similar position on staff— to better understand their challenges, so we can provide appropriate guidance and solutions to benefit them, as well as our broader community of advisers as they seek to grow their organizations.

COOs are often the unsung heroes at their firms; they juggle operational issues, manage teams, and keep advisers focused on their goals. On top of that, COOs are also charged with creating long-term enterprise value for the firm, so it can continue to prosper when its founders or lead advisers exit the business. With such far-ranging responsibilities, they are the ideal group for us to connect with.  

IDENTIFYING TOP PLANNING NEEDS

Several months ago, we held a virtual event to bring together a group of COOs so they could share high-level ideas and build their network. Through a combination of broader discussions, smaller breakout sessions and a post-event survey, we gained new perspectives from the people who run the business, a different group from the advisers our consultants generally speak with on a daily basis.

In particular, we were able to identify these top planning needs related to running a more sophisticated firm:
1. Streamlined processes. Increasing scale and efficiency were the top priorities for the COO group, so developing and documenting procedures and leveraging available technology are critical. For example, one initiative many wanted to implement was digital onboarding.
2. Outsourcing. Even though these enterprise firms have dedicated roles and staff, the largest firms still outsource in areas where it makes sense. That’s great to see, as we regularly coach advisers on how to ensure that they spend their time and energy on the highest-value activities for the firm. The most common outsourced item was payroll, closely followed by bookkeeping and technology.
3. Talent and training. When it came to running their teams, the COOs were most concerned with how to recruit top talent, as well as how to provide comprehensive training and development for all roles, given the increased complexity of the industry and the array of technology tools available.
4. Analytic tools. Reports, tracking, workflows, and other COO-centric tools were highlighted, along with the need for greater analytic ability and forecasting. Firms with many service advisers have unique issues with tracking activity and performance because all production generally flows to the lead or senior adviser.

HELPING EVERYONE THRIVE

Our COO outreach revealed that the need for connection and communication extends across all levels of a financial advisory firm. While most of the time our focus is on the financial adviser, there are often other people who play critical roles in a practice’s sophistication, growth and success. It’s a great reminder to pay attention to what people need to thrive — in every position at a firm.

[More: Great service is assumed. A full client experience is not]

Kristine McManus serves as chief advisor growth officer at Commonwealth Financial Network.