Clients expect their financial advisors to be experts in everything investment-related. But advisors also are expected to deliver high-quality service while they focus on business development.

Sound stressful? Consider just one example. An advisor wants to learn about one of the latest investment trends, specifically alternatives. But the increasing popularity and proliferation of alternative investments is causing consternation for more and more advisors. Not only is the advisor in the example under pressure to grow his practice, provide customer service and manage portfolios, the advisor now must set aside time for learning about “alts.”

I have found that advisors who are best at handling all the requirements of their calling do it through balance. They carry out portfolio management responsibilities without neglecting client service, and reserve enough time for developing new business.

Michael Silver, co-founder and senior managing partner at Focus Partners, a coaching firm that works with advisors on growing their practices, describes these kinds of advisors as jugglers.

“They are the ones who are still able to bring in new relationships, while still servicing existing clients, and at the same time ... effectively managing portfolios,” he says.

In speaking with advisors, I have come to know some who can’t keep up with this juggling act. They usually have reached $50 million of assets and $500,000 in production.

“The sole practitioner begins to get overwhelmed,” says Silver. The first part of a practice to suffer? The business development piece. “And when you stop developing business, the practice will stagnate,” he says.

Customer service is also vulnerable. The advisor who cannot satisfy client demands is soon putting out fires, unable to perform the intensive work of meeting potential new relationships.


The more balanced advisors tell me they never view service as a burden. Rather, they think of it as the true differentiator in their practices.

A prominent level Merrill Lynch advisor, whose name was withheld so he could speak about his business, says: “My team and I are very conscious of the fact that clients have many choices about where to put their money. The difference between paying our fee and paying a discounter fee is the Ritz-Carlton [type of] service which we provide.” He insists that while clients expect expertise and competitive investment performance, relationships are retained most often because of the consistency of service.

I asked for an example of a fire he had to put out. He described a recent case in which a client with $10 million in assets was buying a vacation home that the advisor and his team described as an impulse purchase.

“We had to scramble to sell the right investments, wire the money, [and] help him with the documentation necessary to get the mortgage,” he says. “It dominated my time for a full day. The client was happy, and a happy client is a sticky client.”


So how does the up-and-coming advisor create the bandwidth necessary to still grow, while giving great service and investment advice? According to Silver, the advisor needs to hire a junior partner.

The junior partner serves one of three roles. The first is becoming the “inside” person for the senior partner. Typically, in this role, the junior partner is responsible for generating financial plans for clients or doing additional due diligence on investment ideas. This frees up the lead advisor to stay focused on new business development or certain high end customer service “fires” that demand a senior partner’s attention.

The second possible role is to have the junior partner concentrate on new business development. The junior partner can cold call, help drive attendance at a seminar or possibly be tasked with paying attention to smaller households in the practice that the senior partner suspects have potential either to be a referral source or to be larger.

The third possible role, Silver says, is a hybrid of the two.

But in most cases the senior partner will probably have to invest some of his or her own money toward the compensation of the newbie. Silver feels that this creates a commitment and a bond that makes it more likely that the partnership will succeed.

Former solo practitioners are often perplexed by a new team’s dynamics, are poor at defining each team member’s responsibilities, and do not have the tools to adequately track their effectiveness. Coaches internally and externally may be needed to spend time with teams to help define roles of both partners and staff. As branch managers have had to take on larger complexes, the void in their traditional mentoring role has been filled by training departments and a nascent, but growing coaching industry.

Teams are now the new normal in the wirehouse world. In my recruiting practice, 90% of the transactions we facilitate involve teams. Yet, the juggling act remains a part of every advisor’s life, even those who are part of some of the most successful teams in the industry.

Ironically, one of the primary ways that successful teams are able to maximize their time and their productivity is to outsource the investment of specific securities to outside money managers. And those who are managing the money themselves are usually doing it on a discretionary basis. Selling IBM and buying GE used to take an entire day of explanation to clients on what the relative pluses and minuses of a given security were. Now, once the decision is made, thousands of shares can be traded with a few clicks of a mouse.

If successful with the junior partnership—and not all are—the formerly stagnant practice will start to grow again. It should more than pay for the investment that was made in the new professional who joined the team.

Ultimately, the partnership will settle into one of several types of structures. A vertical team is dominated by a top producer who is responsible for most of the business development and high-end relationship management. A horizontal team develops into a partnership of equals, and each partner takes an asset class.

Advisors will still handle client relationships, develop new business and manage money. Sophisticated teams will create backups so that if a primary relationship manager for a given household is on vacation or ill, a second will be able to step in seamlessly.


Whether in partnerships or not, average productivity per advisor within the wirehouses has never been higher. Aided by the bull market, a shortage of new advisors entering the industry and the ability to manage money more efficiently than ever, advisors should have more time to add money to their practices than ever before.

Yet, more practices than ever are actually stagnant. A million-dollar Morgan Stanley producer told me: “Many brokers in my branch have become complacent with the good market and have stopped looking for new money. The fact is that you always have to bring in new accounts, because every book has some attrition every year. Relying on the bull market to build your book is as bad as a naive client who expects the bull market to fund their retirement.”

If you are happy at your current production level with the end of your career in sight, there is no reason to make any dramatic changes.

But if you know you can’t juggle, and want to take advantage of the wave of retirements that will transform the wealth management industry over the next 10 years, you need to make changes immediately.

 Will you be watching every month go by, wondering how your days were spent, or will you immediately invest the time and energy to take advantage of the diaspora of clients, representing hundreds of millions of dollars in wealth, who are forced to seek new relationships because their current advisor is retiring?

Danny Sarch is a contributing writer for On Wall Street and president of Leitner Sarch Consultants in White Plains, N.Y.

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