Over the past 10 years, independent wealth management firms have intensified their focus on driving on size and scale, with a significant and detrimental impact on personalized service standards, both for advisors and their end clients.  

What’s the causality here? Let’s start by accepting the fact that getting bigger and more efficient means introducing solutions that meet the needs of the broadest number of advisors possible.

Unfortunately for advisors, however, these solutions tend to be cookie-cutter, providing limited room for customization of services and solutions. As such, firms that opt for such an approach could be swimming against the long-term tide.

No better example of this can be found than with the current Covid-19 pandemic and its related market and economic disruptions. Financial advisors under pressure to support anxious clients facing new worries have become acutely aware that more customization—not less—is needed to help manage both current and potential future “big picture” challenges.

Home Office Revenue Grabs Could Be Red Flags
Sacrificing personalized solutions for cookie-cutter support in the name of growth for its own sake is obviously not a good thing for advisors. Worse yet, however, many of these same firms have chosen to maximize value for the home office with rapidly multiplying, additional “behind the scenes” costs charged to advisors for anything and everything.

It’s no secret that fast-changing regulatory, technology and investor behaviors have continued to drive up the cost of doing business, and that many independent firms have reacted by passing on more of their expenses to their advisors.

But there is a fine line between having a reasonable fee structure versus an extractive approach to business, the latter of which will limit how much capital advisors can retain to re-invest back into their own practices. 

Therefore, would-be transitioning advisors should ask in-house recruiters both for a detailed chart of their firm's fees and an explanation for what those fees are supposed to cover.

Firms that value advisor growth, long-term stability and retention understand that charging for anything and everything is no way to do business. If the detailed fee chart suggests revenue grabs from the home office each step of the way, that could be a huge red flag.

Quality Of Resources—Technology Platforms and Succession Loans
While providing a preset menu of technology solutions may simplify things from management's perspective, it also frequently leaves advisors with resources that are not entirely a great fit for their business needs.

Indeed, having a laundry list of resources is not the same as offering advisors the right kind of resources. That requires listening.

To that end, C-suite level executives and other senior leaders must make a habit of personally reaching out to each advisor at least once a quarter, if not more frequently. Advisors interviewing potential firms should establish up front what the cadence of touch-base discussions will be, and at what level of seniority within the firm.

Yes, this requires the home office to invest added time and energy into managing relationships. But if the outcome is advisors having the discretion to access best-of-breed solutions that will allow them to customize their offerings better and boost growth, it is well worth the effort. 

Does this sound like a tall task? Perhaps. But were firms to tie home office compensation to these regular touchpoints by sending out advisor surveys to keep executives accountable, you can rest assured this will happen.

Another key indicator of a firm's focus on investing in the right resources is its willingness to use its balance sheet to fund succession planning deals and other strategic acquisitions.

When firms are literally putting their own money where their mouths are, it suggests a strong bottom line as well as a true commitment to advisor growth. 

A Culture Of 'Yes'
Cultivating a “culture of yes” is about making flexibility and choice more than just buzzwords. If, for instance, an advisor wants to hold some client assets on mutual fund or annuity platform, try to find a way to make it happen. It could also mean being agile enough to develop entirely new pricing structures, even if it's to accommodate one practice.

In other words, when advisors encounter a client problem that is not addressable using their existing solutions, they need to know that the home office will be willing to mobilize resources to come up with one that will. Anything less means advisors are forced to settle, and no one should accept that when it comes to service.

No single platform could ever address every advisor need. That only happens when firm leaders complement it with personal service and a commitment to converting words into action.

Home Office Size Doesn't Equal Advisor Success
In this new era of mega-broker-dealers, scale and efficiency are critical. However, advisors should continually be on the lookout for warning signals that, in pursuing scale, their firm may have lost sight of individualized service in facilitating advisors' long-term success.

Mark Contey is senior vice president of business development for LaSalle St., a family of firms comprising an independent broker/dealer, an SEC-registered investment advisor and a provider of annuity and insurance products. Headquartered in Chicago, the firm serves 300 financial advisors across the country with $10 billion in total client assets.