Go it alone, or team up?

I also met with several dealer firms and banks that were looking to hire new advisors, as well as with a couple of experienced advisors who were willing to give me their perspective on what it takes to build a successful financial planning practice.

As a result of this activity, I received an offer to join one of the big independent firms in its advisor-development program. As well, one of the independent advisors I interviewed expressed interest in having me work as his junior associate, with the promise that I would be a partner in his practice.

Call it ego, but I thought I could do better by building my own practice than someone else’s, so I opted to join the large firm rather than the sole practitioner advisor. Well, here I am – a year later – and, while my business is doing OK, I haven’t been nearly as successful as I’d hoped. The advisor-development program I was promised didn’t really advance my knowledge as an advisor or teach me how to build my business.

Second, I underestimated how much hard work it would take to attract clients. Consequently, I am wondering if I should have taken the option of working with an established advisor instead of going it alone. I checked with him and the offer is still open. What do you think?

Coach says: there is a popular saying that goes: “You don’t try this industry; it tries you.” What you are experiencing are the beginning stages in the typical life cycle of a successful financial advisor. Here’s how I described these stages in my book, Blunder, Wonder, Thunder: Powering Your Practice to New Heights. Let’s see if they fit your situation.

– The “blunder” stage

In the beginning, everything is about survival. You scurry, scratch, scramble, make mistakes and learn lessons. If your company has prescribed processes, you probably are following them. The recommendations you make to clients probably are limited to a few products that you know and trust.

You depend, to a great degree, upon someone (a manager, a senior associate) or some organizational structure (a branch office, for example) for guidance and education.

Unfortunately, because you have few, if any, systems in place, you find yourself charging off in all directions, trying everything you can think of to get off to a successful start in the business. You want to emulate the industry’s heroes but mimic no one – you are determined to do it your way. So, you mess up occasionally, bump into things, get knocked down, dust yourself off and try another direction.

The good news is that the “blunder” stage typically ends sometime within the first 12 and 24 months of your career. Provided the mistakes you make aren’t terminal, you will survive.

– The “wonder” stage

Then, one morning, following a particularly trying day, you are reluctant to get out of bed. The enthusiasm and energy you relied upon during the blunder stage is waning. The “wonder” stage is dawning as you lie there, asking yourself: “Am I ever going to meet my expectations?” If you believe the answer is no, you will leave the business. On the other hand (hopefully), you answer, “Yes, but…” because you realize that something in your world has to change. That’s when you begin looking for a better way.

– The “thunder” stage

The wonder stage can last a year or more as you sort things out. But if you ask yourself the right questions during this period – and respond to them appropriately – your business can accelerate with a velocity that exceeds even your most optimistic expectations. In this subsequent “thunder” era, which can last many years, more and more of your business comes from existing clients and referrals.

To handle the increase, you build your support team. With more clients to handle and staff to manage, additional systems, policies and procedures are required. Now, you have a real and complex business.

Based on your description, I’d say you have just entered the wonder stage, hence the “continue to go it alone” vs “team with a veteran” question you are asking. Unfortunately, there is no right answer. Success depends upon the path you would like the rest of your career to follow. There are pros and cons to both. Here are a few:

– Go it alone: pros

– Your business reflects you – no one else

– You live or die on your own efforts

– You keep all the money

– You decide how your business will be run

– Go it alone: cons

– Your business often is sheltered from good advice from external sources

– Everything your business achieves has to come from you

– You pay all the expenses

– You are constrained by your resources and budget

– Teaming up: pros

– Instant credibility

– Mentoring and coaching

– Ability to focus on clients instead of managing the business

– Shared expenses

– Teaming up: cons

– You are not alone in the spotlight

– You have to take instruction

– You often must do lower-level jobs in the beginning

– Shared revenue

My suggestion would be to employ your customary research approach to re-examine your business as it stands today, with a view to what you want it to be like in the future. You have a lot more experience and practical knowledge now than you did a year ago, so you are likely to reach different conclusions in a number of areas, particularly regarding the marketing of yourself to attract new clients.

You also will have learned there are some aspects of the business at which you are better than others and some things you prefer to do. A good question to ask: “Knowing what I know now, what would I have done differently?”

I’d also encourage you to approach your current firm to see if there are additional training programs or other resources that you can access to help to accelerate your business. Then, I’d visit again with the advisor who offered you a position in order to talk more about expectations – for the type of work you would be doing, for the responsibilities (and authority) you would have, how you would be compensated, what your career path would be like, and so on.

Again, because of your brief but intensive experience, you will be better prepared now to ask the right questions to determine which environment offers a better opportunity for you.

The best practices are the ones that are built upon the clear vision of the advisor. If you can define and articulate what your business will look like when it is as successful as you want it to be, then the decision-making regarding how you are going to achieve that vision becomes much clearer.

Each time you feel disappointment or are tempted by a new strategy or tactic, you can use your vision as a benchmark for evaluation.

You are going to go through the wonder stage a number of times throughout your career as the dynamics of our industry force new conditions upon us and as new insights, information and tools become available to assist us. Knowing what you want to achieve will help you find the right answers. IE

George Hartman is managing partner with Elite Advisors Canada Inc. in Toronto. Send questions and comments regarding this column to ghartman@eliteadvisors.ca. His practice-management videos can be viewed at www.investmentexecutive.com.

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