Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Ep. 22: Eliza De Pardo: Sidestepping Missteps That Can Hamstring Growth
34 Plays1 month ago
RIAs often struggle to manage the dual role of financial advisor and business owner. And that can lead to missteps that tend to slow growth.
Regardless of a firm’s size, common business practices ─ when not well executed ─ can be counterproductive and derail performance for years, according to Eliza De Pardo, Founder and Director of Consulting at De Pardo Consulting.
In this episode of the Synergize podcast, De Pardo joins hosts Bill Coppel, Chief Client Growth Officer at TradePMR, and Ryan Neal, Senior Editor at TradePMR, to explore some of the hidden barriers and habits that may be stalling growth.
Listen as they explore:
- Common business pitfalls RIA firms may face
- Practical strategies that may help break down barriers to growth
- The vital role partner alignment could play in a firm’s ability to grow
Subscribe now, and connect with us on social media:
Get the transcript for this episode, with sources, at https://synergizepodcast.com/.
About Eliza De Pardo
Eliza is the Founder and Director of Consulting at De Pardo Consulting, a firm that focuses on helping financial advisory firms and the financial institutions that serve them drive positive business change.
Before launching De Pardo Consulting, Eliza co-founded FA Insight where she served as a Principal and Director of Consulting. She was also a co-author of the FA Insight Annual Study of Advisory Firms.
Prior to that, Eliza was a Senior Consultant at the Moss Adams Business Consulting Group and a Senior Consultant in advice strategy in the National Australia Bank Group’s wealth management division.
Eliza De Pardo and De Pardo Consulting are not affiliates of TradePMR.
More About Eliza:
LinkedIn: https://www.linkedin.com/in/eliza-de-pardo-5468a811
Website: https://www.depardoconsulting.com/about-us/eliza-de-pardo
If you want to join the conversation or connect with us, please visit us at synergizepodcast.com. This content is provided for general information purposes only. The views expressed by non-affiliated guest speakers are their own and do not necessarily reflect the opinion of TradePMR or its affiliates. TradePMR and its affiliates do not endorse any guest speakers or their companies and therefore give no assurances as to the quality of their products and services. This channel is not monitored by TradePMR. TradePMR does not provide investment advice, tax advice or legal advice. TradePMR is a member of FINRA and SIPC. TradePMR, Inc. is registered with the Securities and Exchange Commission {SEC) and the Municipal Securities Rulemaking Board (MSRB). TradePMR provides brokerage and account services to registered investment advisors. Custodial services provided by First Clearing. First Clearing is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo & Company. Copyright 2025. TradePMR, Inc. For a transcript of this episode with sources, visit synergizepodcast.com.
1 The Looming Advisor Shortage in U.S. Wealth Management, McKinsey & Company, Published, Feb. 10, 2025.
2 What is decision making? McKinsey & Company, Published March 2023.
Recommended
Transcript
Introduction to Synergize Podcast
00:00:01
Speaker
Welcome to Synergize, unscripted conversations where we explore the evolving role of the financial advisor in an emerging AI driven world. Join us as we bring together thought leaders across a range of disciplines and industry experts, sharing insights designed to help RIAs thrive in the industry of tomorrow.
00:00:23
Speaker
Hi, I'm Bill Capelle, Chief Client Growth Officer at Trade PMR, now a Robinhood company. And I'm Ryan Neal, Senior Editor at Robinhood slash Trade PMR, and you're listening to the Synergize Podcast.
Challenges for Financial Advisors
00:00:36
Speaker
RIA, in my experience, RIAs often struggle to manage the dual role of an advisor and a business owner. And that can lead to missteps, missteps that tend to slow growth.
00:00:50
Speaker
So today we want to shine a light on some of the common business practices that are not well executed and that can be counterproductive for RIA firms regardless of their size.
00:01:02
Speaker
And the prices you're talking about, which can end up being barriers to growth, ah they can either be one-off decisions that a firm makes somewhere along the line, or it could be habits that they've built in over the years and that are much harder to break.
00:01:15
Speaker
So we're going to dive into both sides of this equation. So the question is, how does a firm sidestep some of the missteps that can hamstring growth?
00:01:26
Speaker
Our guest today, Eliza Depardo, is here to share her perspective on some of these known business challenges, I call them missteps, and what firms might want to avoid in light of the growth opportunity that lies ahead.
00:01:41
Speaker
This notion of deliberation, deliberation of decisions ad nauseum is really doing your business a great injustice. The drag on productivity um is astounding. The impact on growth is also astounding. We see Decisions being kicked down the road. We delay it, we delay it, it's protracted.
00:02:03
Speaker
And during this time when we're delaying, we are missing opportunities, right? We are ultimately moving far too slowly to be able to grasp opportunities that are right in front of us.
00:02:16
Speaker
A little bit of Adeliza. She is founder and director of consulting at Depardo Consulting, a firm that focuses on helping financial advisory firms and financial institutions that serve them drive positive business change.
00:02:32
Speaker
To learn more about Eliza's background and her experience, please refer to our show notes. Eliza, thanks for joining us. Thank you, Bill. Thank you, Ryan, for having me. I'm really delighted to join you on your podcast.
00:02:44
Speaker
Great. You know, as I mentioned in the intro, we're talking today about RIAs that want to grow and the challenges that go with that. In your experience of working with wealth management firms, participating in areas like organizational design, compensation structure, performance management, as well as general business management and business development, what are some of the issues, challenges, ah in other words, that you're seeing when working with firms that are struggling with all the different things that go into creating a successful outcome?
00:03:23
Speaker
Sure.
Growth and Human Capital Issues
00:03:24
Speaker
Well, as you can imagine, it's quite a long list when we look back at all of the consulting clients we work with the engagements completed. Generally, firms are reaching out because they're having trouble, they're having difficulties growing.
00:03:36
Speaker
um Shareholders perhaps can't align behind a growth plan or they don't know which direction to take. It's very, very common ah for that to be the case. and And beyond growth-related challenges,
00:03:49
Speaker
Oftentimes, firms are really dealing with a host of human capital management issues. And that's where we tend to specialise. And so we see a lot of that. And that could be everything from struggling to structure their teams in the best way possible to support growth, struggling with recruitment, really confused being confused around compensation in particular. It's a big issue.
00:04:13
Speaker
performance management, business succession is becoming um more and more a priority for firms that may be several years away from any type of transaction, but they are concerned about the path to to their succession plan.
00:04:28
Speaker
ah So really, it it ah many, many different human capital related challenges to evident. and And then related to that, you know, we see all sorts of things around um you know business development issues, including marketing and referral generation type challenges.
00:04:46
Speaker
we We see every kind of aspect of business, if you like, of the challenges that arise across a range of capabilities. So when you're working with firms out there and and they you know they come to Depardo Consulting and want to help ah get sustainable growth going, um what do you think are the key metrics that firms out there should be focusing on?
00:05:07
Speaker
ah what What are those things that they should be tracking? a really good question and look, there are so many metrics that firms could be focusing on. I always really counsel shareholders and executive teams to focus heavily on client growth. It's very much as the leading indicator of growth.
00:05:24
Speaker
um Arguably, client growth is the most genuine indicator of a firm's ability to expand. It is ah considered in the market, if you look at compensation levels for roles that are rainmaker type business development positions, it is the most highly valued position in the market.
00:05:42
Speaker
It is the hardest work that takes place within the business is this this ah ability to generate new prospects for the firm that are a good fit for the business and to be able to convert those prospects. So if we're focusing on that activity and our pricing model is in check, everything else should follow.
00:05:57
Speaker
So client growth, number one, as a metric to be paying close attention to, followed by revenue growth, followed by asset growth. In our industry, obviously the tendency for many firms is to focus heavily on that growing asset number, and it is important, but there are other levers within the business that are ultimately going to be driving that number. So and that's why the focus on client growth.
00:06:20
Speaker
and real Quick follow-up on that. When you when you say client growth, to you I'm assuming you mean total like new clients coming in but do you also tellly look at ah growth among your existing clients? Are they are they getting a growing share of wallet, for example? It's really super important also.
00:06:38
Speaker
um when When I reference client growth, we're looking at the percentage increase in a number of in the the number of clients, ah maybe over a 12-month period relative to the previous 12 months.
00:06:49
Speaker
And generally, that total client growth number, if you look at benchmarking data over several years, that number comes in at around 6.5% to 8.5%. um Last year, it was just under 8.5%, which was really strong.
00:07:03
Speaker
for the tipd That's the typical firm performance, right? That's a median. But if you are... ah growing more aggressively or you have aspirations for strong growth, you would expect to see double-digit client growth, a double-digit client growth rate. That would be ah very reasonable expectation for a growth ah firm that's in kind of an accelerated growth mode.
00:07:22
Speaker
um But of course, you're absolutely correct. ah The focus on growing assets from existing clients, generating referrals from existing clients, all that is incredibly, that's all very important to be paying close attention to.
00:07:37
Speaker
And that's a great point. um but But one of the things that, you know, I think we're were confronted with in the REA space is the fact that that there's been an over-reliance on referrals from existing clients and trying to do it that way, which kind of leads me to this next question.
00:07:53
Speaker
um And I want to call out of a document or a white paper you recently published, 10 Fast Track Insights. And this is really getting into the heart of what we talked about in terms of some of those challenges.
00:08:06
Speaker
um So let me start with insight one. yeah Activating your business strategy. We know that firms... tell you they've got a strategy and you know that that in and of itself is another whole ah category of discussion, but it's the activation of that business
Strategic Focus and Resource Management
00:08:23
Speaker
strategy. So as you work with firms, um how do you see that unfolding and and what do you think some of the things are that they're struggling with when it comes to implementation or activation of that of that plan? Yeah, it's really important issue to address. Great question.
00:08:44
Speaker
As you say, firms may or may not have a well-defined strategy. We do a lot of work in strategic planning with our clients and helping them build a growth plan. And look, that that process is generally really invigorating for an executive team. It's creative, aspirational, and generally executives and shareholders land in a place where they're really excited about the future and and um implementing the plan.
00:09:09
Speaker
The challenge is that because there's so much enthusiasm for it, the temptation is to try and tackle everything at once. If you're thinking about, you know oftentimes we use three years as the um time period for the development of strategy.
00:09:26
Speaker
We look out three years and then we think about, well, what has to happen in the first 12 months? Often business owners want to try and do everything in that first 12 months, which is unrealistic, right? We all have finite resources.
00:09:37
Speaker
So the um advice is always to be very thorough focused on those strategic initiatives that you know are going to have the greatest impact within the first 12 months. Be realistic about the resources that you have at your disposal, either internally or externally. Think about your time, money and energy to be able to focus on the completion of strategic initiatives.
00:09:59
Speaker
that will drive the business forward. If you try to spread yourself too thinly, it's very likely you'll make a start on several initiatives and not see completion on any of them.
00:10:10
Speaker
And the risk of that is, of course, we never actually achieve the outcome that we're trying to get to through the strategic plan process. right so you're much better off to focus on two big outcomes in a year and complete them in their entirety and start to reap the benefits of the completion of that work rather than dabbling in all of these different strategic initiatives and not seeing any true result for many many years right because it can take a long time for trying to do everything at once we just most firms don't have a bunch of extra time people sitting around just there to help them implement strategy
00:10:45
Speaker
So um that's my advice is really to be focused on just a couple of things that you know you can where you can move the needle in a period of time is going to have an impact on the business. And what's interesting about that, you know, from my observations that um you've got a strategic plan and and maybe you have five objectives.
00:11:03
Speaker
Four the objectives had nothing to do with growth. but Right. You know, well, we got to fix our technology. We have to streamline our back office processing, you know, et cetera, cetera. Yeah. Not suggesting they're not important, but this is a conversation around growth. And we only do, you know, it gives a firm an opportunity to get lost by by digressing into things that are not necessarily going to ah have an immediate impact on growth. Now, to your point, I guess we could...
00:11:30
Speaker
um say that year one and two are foundational years to fix the process. And then we're going to go into growing three and four, but I always find it interesting. Have you seen similar kinds of things where people's focus, even though it's about growth, doesn't seem to line up with their activity?
00:11:47
Speaker
Yeah, so it's a really important point. um Generally, when we're planning, we're looking at creating strategic initiatives across a range of disciplines in the firm. So your human capital and your operations and your clients will ultimately lead to those financial outcomes, right? So we've got to get things, those foundational elements right in order to generate the growth. That's not to say we don't focus on our pricing model and our marketing strategy and ah you know really come up with great new client acquisition techniques, et cetera. That has to happen.
00:12:23
Speaker
But at the same time, we can't neglect what will be kind of the foundation for for being able to accommodate that growth, which is is primarily the human capital management piece, the leading indicator of sustainable growth.
00:12:35
Speaker
If you get that piece right, you think about the income statement of the typical advisory firm, human capital management accounts for 70% of all business expenditure. So if you can get that piece right through your organisational structure, smart compensation planning design, um a great performance management process connected to objectives that drive the business strategy, you can get a long way.
00:12:58
Speaker
right if you If you get that human capital piece right, it is your biggest investment. um And that is a fantastic foundation for everything else that has to take place, because it's really hard to have a wonderful client experience if you don't have great people to deliver it.
00:13:13
Speaker
and ah It's really hard to be innovative if you don't have great people in the business to be able to drive the innovation in technology or other areas. So that's why it's always, it's a balance between ah focusing on your leading indicators, pulling out the right lagging indicators, things we know we can do, we've got control of that we can have ah or we can have a short term impact over the next 12 months, 18 months, and get that balance right. because you're absolutely correct. You can't focus on just one or the other, it's gotta be a combination.
Business Development and Talent Acquisition
00:13:40
Speaker
Well, so bri building on that part about people, um I know that a lot oftentimes in this space, the firm's founder is that chief brain maker, right? The independent advisor launched the practice or or took it independent.
00:13:54
Speaker
um And something I've talked about a lot with Bill and the CEO of Trude Pee Mar, Rob Baldwin, is how do you how How do you expand that rainmaker capability? How do you bring that from that chief rainmaker to empower the rest of your team?
00:14:07
Speaker
um So in it back to your white paper, you talked about this in Insight 4, the sustainable business development. um So can you talk to us a bit about the potential pitfalls of building a firm totally based around that chief rainmaker and maybe how can firms branch out to make sure the rest of their team are bringing a new business as well right this is one of the most commonly observed issues that we see in advisory firms and it we see it in very large firms with several billion dollars in assets and we see it obviously in smaller businesses where you naturally have a high level of dependency on perhaps a founder ah so the challenge here is that we generally have founders or owners who have
00:14:54
Speaker
big personalities, excuse me, personalities that are very people-oriented, personable. they They do an amazing job at being able to attract new clients. People really gravitate towards them.
00:15:05
Speaker
But that skill is never really transitioned. ah That ability to network, build relationships, build rapport, has never really transitioned to others within the firm, even when businesses have gone out of their way to create advisory teams and support the owners, the founders, lead advisors who are good at that work.
00:15:22
Speaker
we We generally so ah ah oftentimes see this gap between in in that business development skill set. so In the white paper, the guidance is very much for firms to think about how do we focus on the transfer of of this knowledge.
00:15:39
Speaker
And one of the quickest ways to do that is really to focus on business development meetings that are conducted jointly with associate advisors, other lead advisors who maybe aren't quite as capable in the area of brand new client acquisition, and give them a front row seat to the conversations that you're having as a rainmaker or as a kind of pure business development person, how you're building the rapport, the kind of questions that you're asking, how you talk about the value of the business, position your services, um and really importantly, how do you have the pricing conversation?
00:16:10
Speaker
And sitting in and listening to that conversation can be one of the fastest ways to then learn how to do that yourself. A lot of the time, um that is the sticking point. Advisors are nervous to have pricing conversations, um but once you observe it, it can become a whole lot easier to be able to do that. so How do we you know think very much about bringing in others into your meetings and have them use that as a forum for coaching and development.
00:16:40
Speaker
The other thing is really to think about, well, what are your hiring needs going forward? Because the temptation is oftentimes to bring in servicing advisors who we can just transition more clients to. And that may have served the firm really, really well in the earlier stages.
00:16:55
Speaker
And it's a very important function, that servicing advisor role. It's incredibly important. However, we've got to look at skills that are beyond that. So um finding talent that maybe came out of other industries that have that sales background, perhaps folks who previously worked in real estate, as an example, or in retail, that we can coach up to be those business developers for the future.
00:17:18
Speaker
Really actively think about, you know, what kind of skills do we need to fill this gap so that ultimately founders can take a step back. this is There's nothing surer that over the course of time, those individuals who are entirely responsible for business development will want to stop doing the business development.
00:17:36
Speaker
They get sick of it. they They're burnt out by it. And before that happens, we have to have the team in place to be able to take over that responsibility. I love hearing that. My my childhood best friend is in real estate.
00:17:47
Speaker
I think he'd be the all-time best advisor, and he's like he's tall, he's super you know gregarious and fun, and the handsomest son of a bee I've ever met.
00:17:59
Speaker
ah And I think he's good at this kind of stuff, but he's just like not interested in finance, so he gravitated to a real estate. but i'm like, man, if you learned it and someone took a chance on you and taught you this space, he'd be so good at it. Right. but Right. I think there are probably plenty of people out there that that could fill that role.
00:18:18
Speaker
Yeah. And, know, this is a really important topic as well um because, as we know, um the advisor population is aging. You know, I've seen statistics that suggest there's going to be some shifts coming up in the future ah with people leaving the business due retirement and other reasons.
00:18:36
Speaker
ah reasons And so we, we haven't really spent a lot of time talking about where this next generation generation of advisors are going to come from. as as you pointed out, Eliza, and I agree with you, which is, you know, some of it's on the job training, being able to shadow a rainmaker to begin the, you know, what I call help you find your voice and your ability to ah do that kind of work. But ultimately,
00:19:01
Speaker
um you know leaders ah our our so our are trusted with two things. One is to find them and the other one is to develop them.
00:19:12
Speaker
Talk to us a little bit about where you've seen some best practices in that development space and where are they're going to find these next-gen advisors. Well, I agree with you entirely. I think it's it's it's a bit of an alarming statistic um around the percentage of advisors that will be leaving the industry in the next decade through retirement.
00:19:36
Speaker
And we're anticipated to have around $100,000 shortfall
00:19:40
Speaker
in advisors by 2034. That was the the recent data out of a McKinsey report, ah which is dramatic, right? And so so we know we've got an exodus in the next decade, and we know we have to replace people. And it's going to take several different approaches to be able to try and fill that gap.
00:20:00
Speaker
One of them, of course, is the recruitment piece. And to be more appealing as an industry to career changes in particular, I think folks who are coming from um Other industries will be incredibly important for us.
00:20:13
Speaker
um Other professional industries like engineering, accounting, technology, I think will have to be on the radar in terms of pools of recruitment and to be prepared to coach and mentor people who are new to the industry.
00:20:28
Speaker
And that means accelerating technology your career path planning, it means accelerating your professional development programming inside of the advisory firms, and that takes a real commitment.
00:20:41
Speaker
It's always astounding to me to to come across even very mature businesses that have not yet had those conversations with team members around what is your next step within this business and how do we get you there through a very formal professional development plan that outlines here's what has to happen in the next 12 months if you want to get to this next level and then use external and internal sources for development.
00:21:06
Speaker
Oftentimes there are incredible resources internally in a business that can be leveraged better to coach and mentor that aren't aren't being utilised. And so as a minimum, I think firms should be focusing on, you know, what skills do we have internally that we need to transition and how can we more aggressively make sure that we are transferring knowledge to younger talent in order to get them ready. And then it's obviously, it's always lower risk. It's always easier for a business to backfill the organisational structure and bring in younger talent than it is to have to do it at the more senior levels of the business.
00:21:39
Speaker
so So if we can can create that pipeline of advisors through what could even be a client servicing role or a para-planning support advisor position and build it from there, i think that's going to be a more effective approach. Granted, that is not an overnight solution.
00:21:57
Speaker
but this is a This is an investment that has to be you have to look at it as a yeah easily a decade-long investment to be able to ensure that you can create and fill the pipeline to accommodate new growth.
00:22:09
Speaker
You had another number in your white paper ah that really stood out to us getting ready for this podcast that I believe is from a McKinsey survey that 61% of business leaders say that at least half their time they spend making decisions, so maybe such as this, right, how to find next-gen talent, half the time they spend making decisions ineffective.
Decision-Making and Efficiency
00:22:32
Speaker
yeah That's wild. That's a lot of time basically wasted on ineffective decision making. What exactly does that mean? and, and how can you How can we correct this?
00:22:44
Speaker
Because I would imagine most people want to spend all of their time being effective, but half their time on ineffective decision making is, oof. It's big number. And that's partly why it made its way into the 10 Fast Track Insights Report. It's insight seven, this notion of deliberation, deliberation of decisions ad nauseum, is really doing your business a great injustice.
00:23:07
Speaker
And at the drag on productivity, um is astounding the impact on growth is also astounding when you have an executive executive team and and see this frequently executive teams who get stuck in the decision making process decisions can't be made because we either have uncertainty about who's ultimately accountable for making the decision or we have a culture where folks are nervous about making mistakes and hesitant to make decisions themselves we see
00:23:42
Speaker
Decision's been kicked down the road. We delay it, we delay it's protracted. And during this time when we're delaying, we are missing opportunities, right? We are ultimately moving far too slowly to be able to grasp opportunities that are right in front of us.
00:23:59
Speaker
And so for the typical firm, this is this is financially not a smart thing to be doing. What i always counsel businesses to do is to think about whether or not you want to pursue a consensus model of decision making versus a consent model of decision making. Most businesses that I meet tend to operate on more of a consensus basis.
00:24:19
Speaker
That means, well, we as an executive team have to all arrive at a happy place, gain agreement over the course of time, to be able to make a call on one issue and move ahead as a group on the decision.
00:24:34
Speaker
And in that process, we're having folks involved in decisions that may not be all that close to the actual issue within the firm, but they've been asked to weigh in on a topic which they may not know a whole lot about. Others might be much closer to the issue and have much more to say about it and be much more informed about the issue.
00:24:50
Speaker
So you don't always end up with the best outcome. through this consensus-based decision-making model. And it often becomes very protracted, takes far longer than it ever should to get to a resolution.
00:25:04
Speaker
So the guidance for executive teams is oftentimes to contemplate this notion of a consent-based model where one individual is assigned accountability for the decision. Now, this has to be built into your job descriptions in terms of accountability levels. Decision-making authority has to be made clear across the business.
00:25:22
Speaker
what type of decisions can be made at each level in the organisational structure. That then takes all of the confusion off the table as to who is accountable for the decision. But the difference here is under the consent model is ah that one individual makes the decision and they are tasked to go to every individual in the firm that has special knowledge, some kind of subject matter expertise, perhaps a really unique perspective that we really would like to have on this one decision.
00:25:51
Speaker
And they seek counsel from each of those individuals before collecting all of that information and making the final call themselves. And once that decision is made, everybody has to get behind it and move forward.
00:26:03
Speaker
There is an Amazon principle in leadership where they say, they talk about committing wholeheartedly, um Arguing, sorry, ah debating wholeheartedly, so really arguing the point where it makes sense to, and then once a decision is made, commit wholeheartedly in order to all row in the same direction and move forward.
00:26:25
Speaker
So there's none of this, what we often see, none of this, well, let's just second guess that decision a month later and we'll start questioning it and undermining it, and then we are relitigating that decision months later.
00:26:37
Speaker
That can't happen. So so the under the consent model, um with some real parameters around what it what it requires once a decision is made, for every every executive to commit to it, that can really free up this decision-making process and make it a whole lot easier to progress.
00:26:54
Speaker
You know, um I couldn't agree with you more. And and in many of the practices that I've worked with over the years are based on ah consensus, right? So, and somehow, um you know, what I've observed is that they tie that to culture.
00:27:09
Speaker
I.e., everybody's got to get along. Yeah. and And I think this reflects itself also in the the quality of the strategic plan, because inevitably in that situation, you're execut you're executing against a strategic plan and it gets revealed in those situations where you're trying to make a decision. Well, I didn't really agree with that to start with. that you know I didn't like that part of the plan, so I'm not going to support that part of the plan. i mean you know it's it We can chuckle about it, but it's reality.
00:27:37
Speaker
And this is what's going on. In fact, um That leads me to my next question, which is an article you wrote recently in REA Biz, which i I really enjoyed, on this notion of partnerships that diverge um when it comes to business goals, right? And the example is you've got one partner who is more lifestyle-minded, and you've got another partner who is growth-minded,
00:28:03
Speaker
And um when you look at the history, how those a lot of those developed, it was, hey, you know, I like you, you like me. We kind of do the same thing. Let's share expenses, i.e. let's put a firm together. And then you realize five to 10 years into it that you're you're in very different places.
00:28:20
Speaker
How should that scenario of divergence ah to create alignment, how do you build a plan that they can commit to or not?
00:28:31
Speaker
And depending on the nature of the partnership, how does something like that survive or does it? Because more I'm seeing more and more of that develop, particularly as we you know go back to the fact that we're going to see a lot of people transitioning out.
00:28:45
Speaker
Right, right. And yeah, many business owners get to a point where they become very comfortable and ah financially they've already achieved their goals and others may feel very differently. As you said, some want to grow very aggressively and they want to do that you know for for many years to come.
00:29:05
Speaker
So this is ah this is a tricky one to resolve. Some partnerships won't survive it, but there are ways to resolve it. And the advice is always to get back to the strategy of the business, really revisit the plan and and try to focus on the purpose of the firm and why we're doing what we're doing, why it's important and why growth is important.
00:29:32
Speaker
I'm not here, i you know, make the point in the article, this is not about convincing one party to just go along with the other, the other's aspirations. But the truth is that if a business is not growing adequately, it's very, very hard to continue to advance the way that we serve as clients.
00:29:50
Speaker
Most advisory firms over the course of time will find themselves dealing with larger clients, more complex clients who have bigger expectations. They have having premium experiences in all other areas of their lives. And what they don't want to do is deal with an advisor that can't do the same.
00:30:06
Speaker
So the business has to find a way to be able to advance their technology and ensure a client experience. These things are really hard to do if you're not reinvesting and growing and and growing. It's also extremely difficult to retain great talent and to attract the best people in the market if you're not growing because those individuals want opportunities to advance.
00:30:27
Speaker
They also want to generate more compensation for themselves. So you have to be able to, if you want great people to support clients and deliver a wonderful client experience, growth is extremely important.
Aligning Growth and Lifestyle Preferences
00:30:39
Speaker
So coming back to some of those foundations can help folks to sort of really appreciate why the growth piece is so essential. The other one that's obvious that nobody really wants to can ignore is valuations will be dramatically impacted if you're not growing.
00:30:55
Speaker
And no advisor, no shareholder, even if you're one that's really kind of more of a lifestyle shareholder, nobody wants to forego what could be a really strong valuation in the years to come. So they are just some of the considerations. If you can reach agreement on why growth is important and at least map out a path for the next three to five years, then the rest can be figured out.
00:31:16
Speaker
So for example, If you are the the individual, the the business partner who really doesn't want to be working the the hours, doesn't want to be doing there the business development networking, it may very well be that you reach agreement amongst the partners that that business partner might be...
00:31:37
Speaker
um Supported by more resources so that they can transfer more of their clients away. They might manage a ah smaller client load to help give them more flexibility for the future so that they can have more time to live the life that they want.
00:31:51
Speaker
um We can make accommodations through the organisational structure to better support those individuals and to create partner harmony, keeping everybody together, if it's important to the business to keep everybody together.
00:32:04
Speaker
The um disclaimer here, of course, is that where we make these accommodations for individual partners, there has to be some consideration around compensation. Because it it it then becomes a real sticking point for everybody else that if they're growing, doing all the hard work in business development, um that their roles are more valuable than others with the other partners in the business. That is ah that is a sensitive but a necessary conversation to have.
00:32:32
Speaker
Again, to make sure we maintain partner um harmony. So if and if you can be practical in how we support those sort of lifestyle advisors and if they can be reasonable around compensation, I think you can work your way through it.
00:32:47
Speaker
um But not all partnerships can. And that's that's the challenge. is like How flexible are people prepared to be? How reasonable? um and And does it make sense for the business? Some business partnerships are beyond that point and they won't be able to reach that kind of an agreement.
00:33:04
Speaker
But the more communication along the way, the better. Well, you know, it really goes back to what you said at the very top here, that human capital, at the end of the day, is probably the most important factor in the success or non-success of a business.
00:33:22
Speaker
Eliza, I'm going to ah move to wrap up our conversation. What we like to do on the podcast with our guests is ah bring together three three actionable items um for our listeners to take back with them and implement their practice to better capitalize on the opportunity.
00:33:38
Speaker
um So I'd love to ask you, if take all of our conversation, what are what are three actionable items for our listeners? Yeah, okay. So alignment amongst shareholders, business partners is essential. This will absolutely stall outgrowth if you can't reach agreement around the future direction of the business.
00:33:57
Speaker
So focus on your strategy development, seek external support if that's what you need to be able to get to that stage where you are aligned. Oftentimes to break a gridlock between business partners to reach alignment, you will need external support to to make that happen, right?
00:34:13
Speaker
So um the the cost of not doing that and um spinning your wheels because we can't fully commit to a strategy, that will hold you back for years, right?
00:34:27
Speaker
And, you know, very much related to this is the executive team efficacy. How effective are executives in collaborating um in order to execute on strategy?
00:34:39
Speaker
But also just in leading the business more generally, there will be An unlimited number of opportunities that are missed and overlooked if your leadership team cannot find ways to work effectively together.
00:34:51
Speaker
It will absolutely drag on growth rates and margins. And related to that is the decision-making process. um It's truly, you know, if you want three reasons, I'd say it's it's people, people and people. Like, it literally the largest expense for any firm and the most significant contributor over the long term to to achieving sustained business growth.
00:35:15
Speaker
So that would be my guidance. Become really ah laser focused on your growth ambitions and align your executive team around that and then put that people, that human capital plan in place to best accommodate and drive the growth off the back of it.
00:35:33
Speaker
Well, fantastic. Normally i I sum up the three points, ah but I think you just did it beautifully for us ah right there. And and again, it said, people, people, people, ah focus, alignment, make the right hires. yeah So Eliza, thank you so much for for joining the podcast.
00:35:49
Speaker
It's been absolutely my pleasure. Thank you for having me. We hope ah everyone enjoyed today's conversation. If you like what you heard, please just take a moment to subscribe, follow us on social media, wherever you're getting this, click those buttons. Every little bit helps the algorithm.
00:36:04
Speaker
And thank you for listening. Eliza, I want to extend my thanks as well, and I look forward to continuing our conversation. And to our listeners, I say thank you. And watch out for our next episode, where we'll bring you even more insights and actionable ideas to help you grow your business.
00:36:20
Speaker
And remember, the challenge is yours to capitalize on what the future holds.
Podcast Information and Disclaimers
00:36:27
Speaker
If you want to join the conversation or connect with us, please visit us at synergizedpodcast.com. This content is provided for general information purposes only. The views expressed by non-affiliated guest speakers are their own and do not necessarily reflect the opinion of Trade PMR or its affiliates.
00:36:45
Speaker
Trade PMR and its affiliates do not endorse any guest speakers or their companies and therefore give no assurances as to the quality of their products and services. This channel is not monitored by Trade PMR. Trade PMR does not provide investment advice, tax advice, or legal advice.
00:37:01
Speaker
Trade PMR is a member of FINRA and SIPC. Trade PMR Inc. is registered with the Securities and Exchange Commission se and the Municipal Securities Rulemaking Board. msrb Trade PMR provides brokerage and account services to registered investment advisors.
00:37:17
Speaker
Custodial services provided by First Clearing. First Clearing is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo and Company. Copyright 2025. Trade PMR, Inc.
00:37:33
Speaker
For a transcript of this episode with sources, visit synergizedpodcast.com.