Financial advisors frequently turn to technological tools to boost efficiency and drive growth—and with good reason. Nearly two-thirds (63%) of advisors say their firm’s technology saves them time, according to the Advisor Time Use Study recently conducted by InvestmentNews Research and sponsored by Commonwealth Financial Network. Technology can streamline collecting and inputting client data, preparing financial plans and executing those plans. But at some point, you exhaust the technological possibilities. When you’ve optimized your back-office processes as much as you can, continuing to drive business growth means growing your human capital.
Exactly how you go about that may depend on the type of firm, says Kenton Shirk, vice president of practice management at Commonwealth. But when Shirk works with advisors, he always starts with a vision for the ideal future state of the firm and a nuanced sense of the advisory landscape. “Then we reverse engineer what we need to do today to move further in that direction,” he says.
For example, a large, multi-advisor firm may be aiming to grow through M&A, building a legacy firm that will continue in perpetuity. By projecting into the future, the firm’s leaders may see that they need to hire additional service advisors now to keep their growth from outpacing their capacity.
Shirk recalls working with a large firm in which all management responsibilities fell to the lead advisor. Shirk helped the advisor realize they needed a director of operations to manage day-to-day concerns in order to free the lead advisor to spend more time executing their growth strategy. After adding that key role, the advisor was soon attracting advisors who wanted to work with them, new clients and potential sellers.
The value of a trusted third party
Identifying opportunities to improve efficiency can be difficult without an objective set of eyes and ears. That’s where working with a partner can be a huge help. A partner can help you align your human capital strategy with your growth strategy — identifying inefficiencies and anticipating challenges that will emerge down the road. A partner can also help you fill talent gaps, which doesn’t always mean hiring — it could mean upskilling, cross-training and advancing existing staff. If they’ve got the right capabilities, a third party may be able to take the reins on most human capital tasks, eliminating the need for you to hire and manage people altogether.
“Most advisors don’t love having to deal with hiring, managing and developing people,” Shirk says. Outsourcing those tasks can help advisors spend more time doing what they’re most passionate about, while knowing that they’re not neglecting their growth strategy.
Even for those firms committed to internal succession and taking a hands-on approach to development, a third party can prove invaluable. Besides supplementing your existing team and bringing hiring expertise to a difficult talent market, a partner that offers its own development programs for advisors and staff can strengthen your internal pipeline.
Outsourcing supports human capital management in multiple ways
Outsourcing can help you get the most from your human capital simply by augmenting the capabilities already on your team. For example, you may have a marketing coordinator or director of marketing who’s doing everything themselves — planning a social media calendar, writing posts, managing design. This person may be great at strategy, but they may not specialize in every element of marketing.
“A partner firm can bring in designers, copywriters, editors, video specialists and others who can bring a really great end result,” Shirk says — and all without the need to hire new marketing team members.
Growing your human capital can take more forms than you realized. Working with a partner like Commonwealth can help you identify your firm’s short- and long-term human capital needs, bringing strategic planning, data-driven insights and a full suite of advisory capabilities to help you choose and execute on an approach that drives long-term growth.
Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser, provides financial advisors with holistic, integrated solutions that support business evolution, growth acceleration, and operational efficiency. Privately held since 1979, the firm has headquarters in Waltham, Massachusetts, and San Diego, California. Learn more about how Commonwealth partners with more than 2,000 independent financial advisors nationwide by visiting www.commonwealth.com.