Assembling the range of skills needed to run an advisory firm

The overwhelming majority of newcomers to the independent advisory firm space don’t make it, with some estimates pegging the failure rate at around 90%.

It’s not just novices who struggle. Even a large percentage of wirehouse breakaways don’t find success right away, despite having spent years advising clients.

Some of the missteps are attributable to the industry’s poor record of providing young people with adequate training. However, the other part of the equation is the complexities inherent to the job, which demands skill sets that are equal parts varied and contradictory. 


Most everyone has a friend with off-the-charts social intelligence, or what I call a socializer. Perhaps they weren’t the best student growing up but striking up conversations with strangers and making others feel good about themselves is second nature to them. 

Every adviser practice needs a socializer. Bringing in business and managing client relationships is about shaking hands, kissing babies, attending happy hours and presiding over client appreciation events. To socializers, these activities are not tedious tasks — it’s a part of who they are.

Meanwhile, each practice also needs someone who is comfortable spending much of the day pouring over analyst reports, studying the market and managing portfolios for clients. These are the folks who didn’t just ace their securities exams, they enjoyed the process of studying for them. They are analyzers.

If anything, analyzers bring too much reason to everything they do. But when it comes to the technical aspects of being an adviser, few would question their abilities.


Rarely does someone possess the traits of both a socializer and an analyzer. The reason is based on physiology more than anything. Our brains are wired a certain way, and in most cases, there’s very little we can do to change the way they work.

Socializer are every bit as likely to sit at a desk all day reading investment reports as they are to beat Usain Bolt in a foot race. For an analyzer, the prospect of rubbing elbows and entertaining a large group of people is every bit as unlikely.

Some could dismiss that argument by saying that everyone should venture out of their comfort zone. Not only are appeals like that impractical, but there’s also an opportunity cost to putting time and effort into something that is bound to fail.

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While socializers may not need help with relationship management or lead generation, they likely have holes in a range of other areas, whether it’s compliance, investment and portfolio management, training staff or setting up the right tech stack.

Meanwhile, analyzers aren’t haunted by the mechanics of serving clients. Instead, the problem is acquiring them. They need a rainmaker, because without one, they may not survive.

Broker-dealers, of course, have sought to plug the holes in adviser businesses for years, but with so many constituents to serve and so many competing interests to satisfy, that has proven to be a tall task. Therefore, advisers should look to different networks to deliver services, solutions and human resources that complement what they already bring to the table.

Advisers need to be who they are, do what they do and find partners who will mitigate their weaknesses. Too often, we try to make advisers be someone they’re not, and that’s why business breakdowns happen.

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Conor Delaney is the co-founder and CEO of Good Life Companies, a Reading, Pennsylvania-based network of independent financial advisers.

The post Assembling the range of skills needed to run an advisory firm appeared first on InvestmentNews.

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