Is your firm optimally staffed?

More than 75% of company expenses are spent on staff compensation, benefits and training, so when a firm is anticipating the next step in their development, the basic drivers of growth – staffing, revenue, and productivity – must be among the very first factors evaluated to help achieve higher levels of profitability. In the recent 2013 InvestmentNews/Moss Adams Compensation & Staffing Study, key times and benchmarks were identified in an advisory firm's growth cycle that are ripe for making key hires. From the critical early phases in which a firm morphs from a “practice” to a “business,” to the largest superensemble firms, mastering these decisions helps firms become efficient and profitable. There are benchmarks for all stages of growth, whether you are a solo practitioner potentially teaming up with a partner, or a firm with $10 million in revenue looking to gauge productivity for partner promotions. For example, firms with under $5 million in revenue spend $1.50 on partner compensation for every $1 of non-partner compensation. In firms with more than $5 million in revenue, $2 is spent in non-partner compensation for every $1 spent on non-partners. On the opposite end of the spectrum, when a solo practitioner eclipses $500,000 in revenue, they typically employ a paraplanner or client service employee. When an emerging ensemble practice reaches $1 million in revenue, there is typically an operations manager dedicated to overseeing all administrative functions of the growing firm. Click here to download the executive summary and purchase the study, or visit our online tool, the National Adviser Compensation Database, to enter your firm's service model and revenue or asset levels to benchmark your firm.