How do I best repay the trust my clients place in me?

Clients have placed a lot of trust in their advisor to oversee the management of their wealth and lifestyle. Some advisors believe they are not doing their job correctly if they are not as hands on with the asset management. In many cases, I say that they are not doing their job correctly if they are managing money themselves! There is zero shame in delegating to a trusted partner! An effective team is imperative.

Do I have the time to run portfolios to the best of my ability, while managing other aspects of my business?

Let’s look at a worst case scenario. Imagine an advisor runs client portfolios themselves. They are on a three day road trip meeting clients. During this time their eye will be off the market because they are in meetings; staying somewhere with limited connectivity; or driving. The markets suffer a major correction and the advisor is out of pocket. Is this actually negligent not just unfortunate?!

Less drastic than the above, but let’s address the time element in everyday situations. If an advisor is sitting in front of a screen placing trades they are not meeting with new clients. If an advisor is on the golf course trying to land the “big fish” they are not watching the market diligently. A classic case of jack of all trades, master of none. With one backside you can’t sit in two chairs.

The Solution
Decide on which side you fall. Build a plan to get to the point where you can focus on your strengths and purpose. As an entrepreneur myself, I accepted that the wearing of multiple hats in the early days is inevitable. But there must be a detailed plan to get to the promised land. I know from personal experience that wearing multiple hats long term is unsustainable.

If you are an asset manager, partner with someone with complementary strengths who will focus on business development.

If you are an asset gatherer, you need to outsource the portfolio management element of your business. Five years ago, I accept the argument that small advisory businesses did not have access to quality support in the portfolio management space. I also accept that perhaps cost made this option prohibitive. In today’s market quality OCIO (Outsourced Chief Investment Officer) solutions are available at a reasonable price. Do you want the comfort zone of your excuses or a map of the path to success?

It is time for advisors to stop wearing too many hats and focus on their strengths and reignite the passion that originally drew them to the industry.

For an advisor planning to go independent, be clear and decisive. The courage is in picking a lane that highlights your talent. The rewards for taking the entrepreneurial risk depend on it.

Richard Hillson is the founder of Hillson Consulting. He can be contacted at [email protected].

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