RIA firm culture is critical in a personal service business. Ron Carson, CEO of the Carson Group, admitted he didn't pay enough attention to culture when his firm was younger. Then he discovered a Harvard study that showed a huge performance gap between businesses with cohesive cultures and others lacking in that area.
Jack Petersen, CEO of Summit Trail Advisors, conceded he waited too long to define the specific roles of his team. "Everyone wore multiple hats" for too long.
When people got defined roles in the second year, "productivity really improved," Petersen said.
John Burns of Excencial Wealth Advisors agreed. Defining roles increased advisors' pressure to perform at what they do best.
After Burns fired himself from certain tasks within his firm, he felt significant pressure to elevate his game "to justify myself."
Sharing equity was another mistake these advisors made early on. "It's amazing when they start acting like owners," Carson said. "What you give up will be more than made up."
Jeffrey Concepcion, CEO of Stratos Wealth Partners, agreed. Back in 2010, Stratos sold key employees equity at a major discount. Today, the value of those shares has appreciated 120 percent.
But sharing equity, even when you allow young partners to buy into the firm, is a two-way street. That means that the firm has to look like a great investment.
"You won't get young people with families" to reinvest their income in the business unless it appears to be an investment of phenomenal value, Cooper said.
The lesson: Become a magnet for the best people and you will grow.