Breaking the Barriers to Growth – Advisor Insights with Andy Schwartz CFP®

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Andy is a Principal of Bleakley Financial Group and has recently been recognized as an industry leader by the following publications::

  • Financial Times Top 400 Financial Advisors – 2018 & 2019
  • Barron’s Top 1200 Financial Advisors – 2018 & 2019
  • Forbes Best-in-State Wealth Advisors, NJ -2018 & 2019

What are some of the biggest challenges you see facing advisors today?

As the world has become more complicated and client expectations grow larger, I think the future challenge for all advisors will be to create scale in order to provide a broader support structure and service offering. Those that can’t will be at risk of losing valuable clients to firms and advisors with greater capacity and the ability to offer a more robust client experience.

Fee compression will continue to be another obstacle for the majority of our industry. My personal feeling is client households with under a half-million of investable assets will be most threatened with fee compression, simply because the differences narrow between a full service planning firm and a quality hybrid-robo advisor service – with the latter coming at a substantially lower cost. This appears particularly true for millennials and the generation behind them where technology and autonomy hold greater importance and they aren’t typically at a stage where advanced planning is required.

The good news is that I do not believe that there will be as much fee compression for the high net worth, larger client as long as the advisor can provide a wider range of high-quality planning services. In order for that to be possible, we will have to have larger teams to be able to support more professionals with specific areas of expertise.  For example: retirement and estate planning, accounting, legal documentation review and possibly tax preparation. At Bleakley, we even hired a life coach to help our clients through difficult life transitions. Since any increase in capacity comes at a cost, the only way to maintain margins would be to grow your practices larger and to collaborate with other advisors. Create scale and everyone benefits.

If an advisor has hit a plateau in their practice, how do you help them evaluate how to break through to the next level? Are there common themes that you’ve seen which cause advisors to feel “stuck” and unable to reach their growth potential?

Most advisors level off for one of 3 reasons – Capacity, Complacency or Captivity. While it’s usually a combination, let’s break them up for now:

Capacity: Too often, advisors convince themselves they are too busy to prospect. Too much paperwork, too many existing clients etc. And it feels real because one person or one small team does have an upward limit on how many households can be managed. That can always be rectified by hiring additional resources. That becomes the catch-22 many advisors fall into. Can I afford to hire someone to increase capacity – to generate more revenue – to pay for that person and enhance margins over time? This is an area where our firm has done exceptionally well. We hire really talented folks, pay them very well and share the resource across a group of advisors. The breakeven becomes lower, the capacity improvement is immediate and growth should follow quickly.

Complacency:  Sometimes a practice levels off because the advisor has reached their expectations. They become comfortable financially or they get complacent in effort. People ask me every day, why do I still work as hard as I do and I tell them that if I am going to go to work every day, (the days that I do work) I want to maximize my opportunities. In my mind, if an advisor’s practice is not growing, then it is just dying slowly.

There are a couple of ways to help break through complacency. First, is to reevaluate your goals and expectations. It still amazes me that most advisors still don’t have specific goals set up. It is almost like a ship without a rudder – you’re just going around in circles. Once you establish stated goals, and a plan of action behind them, your business will grow.  It’s important you create the right tracking mechanisms so you know where you stand at all times throughout the year. Follow through is critical and working with a coach or study group will help maintain focus. Looking at results in December is not going to help achieve your goals. It’s something that needs to be looked at on a monthly basis and we have to track not just our inflows, but our outflows as well.

The second major obstacle to scaling up a practice is the need to break out of our comfort zone and continue to talk to bigger and better prospects. Half of this is psychological and the other half is a structural problem. The psychological part that that we have to get over the idea that just because the client has a larger net worth, that somehow we are not qualified to handle their assets.

The structural part of the problem is a little more complicated. In order to compete for larger households, you have to have a talented team and exceptional client service. And this costs money and requires action on your part. This circles back to my original thought on capacity and is a key reason I believe we have to join forces to grow stronger and create leverage to successfully compete for the higher net worth clients. And by the way, when you have the structural piece in place – the psychological hurdle becomes more manageable.

Captivity: We felt like being captive advisors on a specific platform was stunting the growth of our advisors- it was one of the key reasons we went independent in the first place. What we didn’t realize was just how massive that impact to growth potential really had become. We collected more assets from existing clients, were able to offer appropriate solutions to new and existing clients that weren’t available before to us and became really efficient with cutting edge technology.

We know that to be successful in this business going forward advisors and firms need to be nimble, flexible and have multiple options available for client needs. And look, we understand it’s hard for a wire house or insurance company to be nimble and efficient, but it doesn’t mean it’s not what our clients expect. And I’d bet most advisors have no idea just how much growth they are missing simply because their parent institution lacks that flexibility or creativity.

I am happy to report that in a little over 4 years from my emancipation date, I have doubled the size of my business. And there are nearly a dozen other advisors within our firm that have done the same. More importantly, the average household that I bring on today is three times the size as 5 years ago. Many of those clients would never have worked with me due to my prior limitations in a captive environment.

You moved from a captive B/D and insurance platform to independence about 5 years ago – what have been some of the key takeaways from the transition and some advice for folks contemplating a similar move?

One of the biggest problems with being a captive advisor through a big bank or a broker dealer/insurance platform is that these institutions tend to run their businesses with the lowest common denominator advisor in mind. The other is that they are rife with competing interests between the entity goals and the client needs. I haven’t had an argument with a home office executive since I left, so that’s nice too.

To advisors thinking about breaking away, I’d say do your homework.  First, get really clear on why where you are isn’t working. Then figure out what you want out of independence and what you are willing to tolerate. There are so many options out there that if you don’t have clarity on those two things it can get overwhelming quickly.

I still don’t really understand the jersey-swapping from one bank to another or one insurance company to another mentality. To me it seems like a whole lot of work to go from one mouse trap to another. Sure the check can be nice I guess, but it’s all a lateral move with the same restrictions.

If you are looking to break through for growth, evaluate the groups that have proven they can do it without putting restrictions on your practice and that can provide leverage for you over time.  It can be a crazy ride, but I would highly recommend this to anyone with a desire for growth.


Friday, June 14th, 2019
9:30 a.m. to 12:30 p.m. EST

Andy Schwartz, CFP ® Presents:

Breaking Through the Barriers to Growth: Practical advice and insights for
growth-focused advisors


Securities offered through LPL Financial, Member FINRA/SIPC.  Investment advice offered through Private Advisor Group a registered investment advisor.  Private Advisor Group and Bleakley Financial Group are separate entities from LPL Financial.

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