Matthew Schulman works with financial advisors, constantly helping them recognize the growth stage when they need to hire more junior advisory help.
He takes on those tasks as U.S. Wealth Management’s director of business development in Braintree, Mass., coaching advisors nationwide about building their firms. U.S. Wealth Management is a national network of advisors affiliated with LPL Financial that has more than $850 million under management and dozens of offices throughout the country.
"It's about the efficiencies of client relationships," Schulman says about the analysis that advisors should use to evaluate the timing for when they need to hire junior advisors.
A mistaken and nearly intractable trend among advisors is to “hang onto smaller accounts,” he says.
Schulman considers 100 households an ideal number for each advisor’s client roster.
But he knows that many advisors won’t want to relinquish clients to pare down to that figure.
Advisors avoid such trimming, even though it would give them more time to focus on prospective clients who could deliver more revenue for the firm than many of those existing clients, Schulman says.
Recognizing advisors’ resistance to slim down their client rosters, he instead asks them to evaluate their client basis and hire junior advisors to handle less-productive clients and allow veteran advisors to seek more worthwhile clients.
“It’s a great start for a junior person, and it’s a piece of the book that the more senior advisor shouldn’t be servicing anyway,” Schulman says.
The junior person typically either through salary or from a share of fees may earn a living from those clients, he says.
For the senior advisor, “It’s all about leveraging time,” Schulman says.
But Lynn McIntire, a principal with Raymond James Financial Services and co-owner of Cadent Capital in Dallas, has a different take on hiring junior advisors.
“If a client’s not worth my time or I don’t believe I’m adding value as an advisor, am I really doing a junior advisor any service asking them to take over that practice?” she says.
McIntire has trimmed her practice to 115 client relationships, all productive ones. The junior advisor she hopes to hire shortly, who hasn’t yet signed a contract, won’t be reassigned existing clients who she wants to shed.
Instead, McIntire expects to train the junior advisor and have the new hire work with the firm’s productive clients. At the same time, she intends to encourage the junior advisor to bring in new clients.
“We should all spend our time on its best use,” McIntire says.
Miriam Rozen writes about the financial advisory industry and is a staff reporter for Texas Lawyer.
This story is part of a 30-day series on how to prosper as an advisor.
Register or login for access to this item and much more
All On Wall Street content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access