Will hiring another adviser increase your profits?
Employing a member of back-office staff may be more efficient and profitable than recruiting another adviser, argues David Tait managing director Redmill Resourcing
I have literally taken hundreds of phone calls over the years from advisory companies asking me to help recruit new financial advisers for them. I always go on to ask the same question: “Are you sure you need to hire a financial adviser?” I appreciate this may seem like a strange question to ask, after all isn’t it the role of a recruitment agency to take a brief and fulfil the clients request?
I believe it’s the role of a recruitment agency to consult with their clients, fact find their business and truly get under the skin of the size, structure, ethos and future growth plans of the company. I also firmly believe it’s our role to advise and offer intelligent solutions in the way of good advice based on the years of experience we have in workforce planning whilst delivering true added value.
In the case of advisory companies where they are requesting assistance with the hire of a financial adviser, I think it is essential to ascertain why this need has arisen. Most commonly it is from either a desire to grow the business through the acquisition of additional funds under management, or the need for an extra pair of hands to help service an existing client base. I believe both these issues could potentially be addressed in a more cost effective manner than an advisory hire, and which further embeds the existing advisory staff whilst enhancing client relationships and streamlines your existing processes.
Relieving the admin burden
It’s not uncommon within advisory businesses to find the financial advisers taking responsibility for a large volume of administration. In extreme cases I have had financial advisers tell me that half their working week is spent conducting research, producing suitability reports, and preparing client letters. It’s not a stretch to quote that at least 30% of an adviser’s week can be spent on administration.
Imagine what would happen if that time could be given back to the adviser. More clients would be serviced and more business development could be done. If you were to take away the administration burden from the adviser, perhaps you would find increased turnover, revenues and ultimately profit for your company would be a natural result of this simple realignment.
So what’s the alternative to a new financial adviser hire? Perhaps increased administration support is a better solution for your business. The benefits mentioned above free up the adviser’s time allowing focus on client servicing but there are many more benefits. A new financial administrator or paraplanner demonstrates your support to the existing advisers within the company, further embedding the employer/ employee relationship. A good administrator can feed into existing processes helping to streamline them and generally speaking there is a cost saving as often a back office hire is less expensive than a financial adviser hire.
It may be that you have a solid back office currently to support your existing financial advisers, however if you are thinking about increasing your adviser headcount then I would urge you to analyse if this is the best solution for your business as it may just be that increasing your back office is a more cost effective and ultimately profitable way to grow your business.
For more on Redmill Resourcing go to: http://www.redmillresourcing.com