C2P

If You Take Five Months Off From Your Business, Will It Thrive or Just Survive?

Published November 22nd, 2019 in Blog |

advisor enjoying time off

As a financial advisor, you have spent years building your client base and increasing your firm’s revenue.  Business is humming along on a steady upward trajectory, and you have never felt more confident about your opportunities for growth.

Now imagine that you suddenly need to take an unplanned (or planned) extended leave of absence from your company.  Will your firm survive without you?  Or, better yet, will it thrive in your absence?

Do you have a sustainable business model without your production?  Could the operations run without you providing direction? If you aren’t engaged in the day-to-day for some reason, what will happen to the company that you have built?  It may survive – but it definitely won’t thrive.

If you’ve built a self-managing or self-multiplying company, your firm will be just fine.  And if you haven’t yet built a business that will run profitably with or without you, now is a great time to start!

It’s been said that the very best businesses may be initially built around the talents of the founder, but the businesses with staying power will eventually make the founder a visionary and not the critical lynch pin they once were.  The founder must step back and let go of the reins for the business to flourish.  Relinquishing control can be an emotional moment for some, but giving your firm the autonomy to run independently of you will allow it to grow and give you peace of mind if you ever need to take a leave of absence.  You will also be able to focus on the things at which you excel instead of getting lost in the weeds of the day-to-day operations.

In the book Rocket Fuel (Gino Wickman and Mark C. Winters, 2016, BenBella Books, Dallas TX), the authors point out the roles of the Visionary vs. the Integrator.  The Visionary is the big idea person, always forward-thinking, pioneering, and taking risks.  The Integrator is the one who evaluates and adapts the visionary’s ideas.  At some point, the visionary needs to step out of the way so that the integrator can do their job and actually run the business.

What type of things should you have in place so your business will thrive with or without you?

  • Core processes – You need to document what you are doing for your clients and how you are doing it. Is it tested, proven, and repeatable? If you are using an integrated holistic planning approach that is resulting in assets being moved to your firm, then document, document, document. Your processes may evolve over the years as your business changes and grows, and you will add new processes as you expand your services like Medicare, tax preparation, or adult education classes.

If you don’t have documented processes in place, your business becomes too reliant on employees, who may be working in silos.  If someone is out of the office, the other employees may not know what to do when something unfamiliar crosses their desks.  With a core process and a checklist, anyone can pick up a task, follow the process, and get it done.

  • Strong team – A strong team that you can trust is essential when relinquishing control of the day-to-day operations. The team members must know that they can trust each other’s work and trust each other to get the work done. It is up to you, the founder, to create a work environment where team collaboration is part of the business model. You can trust the work of your team, but still have oversight and quality control to assure that tasks are being handled the way they should be and nothing gets lost in the shuffle.

How do you know that you have the right team members in place? And once they’re in place, how do you ensure that you’re developing them, giving them clear expectations, and empowering them to do their job the right way? There are essentially two paths to bring an employee on board, depending on whether they are coming on as an advisor or an operations/back office employee.

There are a variety of step-by-step processes that will help you find, hire, and on-board employees for your operations team. In The Hiring Advantage (Gina Pellegrini and Jason L Smith, 2014, Eden Prairie MN), the hiring process is broken down into three steps:

    • Prepare for the new hire – define the role, determine the qualifications, create an ad and share options to post.
    • Review the candidates – review the resumes, conduct prescreening and in-person interviews, test the candidates, check references, include your team for the second interview and set up the final candidate for a “Shadow Day” in the office.
    • Present the offer – prepare to make the offer and set expectations for the new hire

You can find out what a potential employee’s natural work style is and whether they will mesh well with the rest of your team. Whatever system you use, be consistent and you will lessen your chances of hiring someone who is a bad fit for the position and your team.

One of the challenges that many advisors face is finding other great advisors to join their practice. There are two personality types when it comes to advisors – the hunter and the farmer. The hunter goes out and finds new business, while the farmer tends to the existing relationships. Both are equally valuable, but they come into the practice via different tracks due to their experience and mindset. There are five rungs on the advisor career path:

    • Entry level – Client service advisor
    • Second level – Paraplanner
    • Third level – Associate advisor (farmers make great associate advisors)
    • Fourth level – Rainmaker, or lead advisor
    • Fifth level – Partner

When discussing this path with a new hire, make sure that they are aware of the responsibilities of each level and the criteria needed to move up to the next level. This is where an accountability chart is a critical component of your team’s success. This is not an organizational chart, but a document that clearly defines the different responsibilities of each position in your company. Since an advisor could one day leave your firm and open their own, it’s a good idea to show them the track to partnership within your organization. Typically, you would bring a hunter in at level three or four.

  • Marketing strategies – It’s important to have marketing strategies in place that don’t drive all new business to you as the founder, but drive business to all the advisors in the company. Some of these include:
    • Medicare – Helping a Medicare client navigate the healthcare system can lead to a new financial services client
    • Tax practice – Adding tax preparation services not only introduces a new revenue stream, but these clients can be converted to clients of the firm
    • Non-profit adult education – Attendees are attending these seminars for a reason. You might be the answer they need. Three popular adult education topics include:
      • Taxes in Retirement
      • Medicare
      • Social Security
    • Referrals – Well-served clients will result in quality referrals
    • Podcasts on current topics
    • Radio shows
    • Authoring and promoting a book

These three key things – core processes, a strong team, and strategic marketing – on an ongoing basis are what will help your business grow. And those same three things are what will keep your firm operational should you have to – or plan to – take time away from the business.

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For financial professional use only. Not for use with the general public. The contents of this piece include the opinions and projections of Clarity 2 Prosperity, are subject to change, and are for informational purposes only.

Dave Alison

Dave Alison, CFP®, EA is a founding partner of C2P Enterprises, driving a vision to help financial advisors across the United States simplify financial planning. Dave’s professional capabilities to coordinate tax, financial, insurance and estate planning needs are what led him to found Alison Wealth Management as a boutique tax, financial planning & investment management firm bringing household CFO services to affluent families & high-income professionals across the United States.