More than a decade ago, Savant Capital CEO Brent Brodeski brought in an outside consultant to look at his fast-growing firm and make some recommendations about how to make it run more smoothly.

The consultant, Mark Tibergien, then head of Moss Adams's consulting business for advisors, told Brodeski his high margins and fast growth were very impressive. But it wasn't a compliment.

Then "he told me you are going to blow up," Brodeski recalls. Like businesses in many other industries, RIA firms are most likely to veer off the rails when they enter a phase of near-vertical trajectory.

Today, Savant Capital has lower profit margins and a slower growth rate, but the firm is worth far more because it is a more stable, less risky enterprise. One lesson was: Don't think you can milk your business and expect a higher value at the end of the day.

Brodeski's confession was one of many at a session entitled, “The Road To A Billion And Mistakes Made Along The Way,” at TD Ameritrade Institutional’s National LINC conference for advisors in Orlando yesterday. The session reinforced the widely accepted notion that entrepreneurs are risk-takers who are willing to make mistakes. The challenge is whether they can correct those mistakes.

Hiring personnel and developing human capital was another area where leading advisors made big mistakes. For years, we used "to hire people who were like me," Brodeski said. "I used to think I was pretty cool. In reality, I'm pretty dysfunctional. Some people are really smart but they are jerks." Today, the firm looks for smart people they like.

One time, Savant was looking for professional management, so the firm hired a wirehouse executive. "He didn't understand our fee-only [model]" because he came from a product sales culture.

"You can't train character, intelligence, hard work, and alignment of values," Brodeski said.

Matt Cooper of Beacon Pointe Wealth Advisors admitted that when his firm was smaller they simply hired people they knew. Today with 12 offices, that's no longer possible.

For a while, Beacon Pointe tried to control the hiring process and dictate new employees' roles. Results weren't satisfactory. So now Cooper says his firm "tries to find the best players," give them room to operate and let them develop in areas where they display the most talent.

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.

Why can rapid growth be so dangerous for RIA firms? Tibergien, who now is CEO of Pershing Advisor Solutions, says their span of control gets strained and "risk management gets overlooked."

As the profession keeps consolidating and some firms are established with growth through acquisition as their key goal, these problems can compound themselves, he adds. Many of the biggest consolidators are "balance-sheet reliant," so there is a risk they can properly fiund their growth.

That, in turn, can put their liquidity and credit-worthiness at risk, Tibergien adds. Raising more equity is expensive, particularly if a firm's finances are dicey. The result is that today's larger RIAs need to watch their capital structure more closely.