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.

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