Most advisers start their business individually. In the initial phase, they take care of all aspects of their business – sales, back office, advisory, transaction execution, research and client service singlehandedly. As the client base grows, advisers hire people to take care of routine operations like back office and transaction execution. The size of the team typically depends on the type and number of clients, services offered and the scale of a practice. An adviser can cater to a few high net worth clients individually while servicing a large retail clientele requires manpower.
Whatever the size of a practice, having a good team has its benefits. So how should advisers go about selecting the right person for the job and what skills should they look for? Suresh Sadagopan, founder of Ladder7 Financial Advisories, looks for people with good communication skills, an attitude to help clients, interest in making a career in the advisory domain, technical skills, knowledge in the domain and beyond. Another important aspect Suresh looks for is the interest of the person to increase knowledge and skills through continuous education. The person should be willing to adapt and grow. Ladder 7 has a ten-member team.
“Past experience does not matter to me. In our firm, a majority of my advisers did not have the experience of handling clients or even domain knowledge when they came on board. They had the curiosity of learning and growing. They need to be sincere and dedicated to work,” says Vinod Jain, founder of Jain Investment.
Vinod Jain started his practice two decades back. He hired his first employee within first month of starting his practice. Vinod has built an army of advisers who work on a revenue-sharing model. He has a team of 95 of which 66 are advisers. This helped Vinod grow his practice at a fast clip. Today, his firm manages assets worth Rs 970 crore in mutual funds and Rs 515 crore in its in-house Portfolio Management Services.
Team inspires each other
Vinod shares the success story of one of his adviser Dinesh Singh who came from Goa to Mumbai in search of a job. “Dinesh Singh was not familiar with Hindi. He didn’t know anyone in Mumbai. I hired him as adviser. Today, he manages assets worth Rs 130 crore. He came up with this ingenious idea of catering to clients who are near retirement or have already retired. Such clients usually do not have any loans to repay and are serious about persevering and growing their money for retirement or utilising the money in post-retirement phase. His asset book is growing and now many in the team are taking a leaf out of his success mantra.”
Focus
Having a team helps the founder work towards achieving the company’s goals and vision. Thus, the adviser can focus his/her energy on growing the company. “Having a team has many advantages. One can delegate work according to the skills and experience to different team members. This helps the adviser focus on his core competencies like business development and meeting clients. Every individual has limitations on how much energy one can dedicate to different tasks. So delegating helps an adviser focus on his tasks. Further, having a team ensures continuity in business,” says Vivek Rege, Founder, VR Wealth Advisers. The firm operates with ten employees from Mumbai.
New ideas
A diverse team with different skills and backgrounds helps in fostering new ways to deal with a situation. Suresh shares one anecdote, “One of our team members came up with the idea of summarising the essence of any telephone conversation in a follow-up email. This has become a standard practice now and it has proved to be quite useful as a good documentation tool as well as a way to ensure that the salient points with the client are recorded for future reference and compliance purposes.”
Suresh notes that having a team helps advisers offer a broad range of services, cater to a larger client base and do away with the monotony of performing repetitive back-office tasks which can be efficiently managed by a team.
“If one is a solo operator, there is a clear limitation about how many clients can be serviced. Also, one will be pulled in all directions. Thirdly, a good adviser may waste time in execution and operational nitty-gritty which may not be the most productive use of time. It may hence be a better idea to hire people suited for specific roles and responsibilities and offer them proper training and guidance so that they may perform their duties efficiently. A team can efficiently and reliably handle clients, which a solo operator may struggle with. Also, with a team, the range of services for the clients can be offered which a solo operator will not have the bandwidth to do. Lastly, being a solo operator, there is no individual growth possible. One will have to keep doing virtually the same thing throughout,” observes Suresh.
When to start hiring?
It depends on your business model. If you do not wish to grow your business and your clients are happy with the services, then there may not be a strong reason to employ more people. One aspect that advisers factor in is their assets under advisory. Many advisers typically start hiring when they have built a decent asset base which could cover their costs and are contemplating taking their business to the next level.
Pillars of an advisory practice
Vinod believes that technology and people are two pillars of any advisory practice. Vinod has an in-house information technology team based out of Navi Mumbai. His firm Jain Investment spent Rs 1 crore to set up this tech arm. This firm takes care of the entire technology and back end. “The IT firm has six employees. This has helped us achieve scale and bring efficiency. More importantly, it has helped increase the productivity of our staff.”
Pros and cons of a large team
The success of a distribution practice is directly linked with markets. In a bull run, a large team can successfully onboard more clients and grow the business swiftly. On the other hand, a prolonged period of bear market can add to the costs if the firm has a large team. The distributor has to still pay salaries, rent and other fixed costs. Mark-to-market losses can erode AUM, clients may move out, thereby affecting revenues.
On the other hand, a business with a lean team backed by technology and has fewer branches/offices can manage to tide over a bear market smoothly.
Training
Lastly, just having a team may not be fruitful if the staff is not motivated, challenged, empowered and trained regularly. The founder has to ensure that his/her team is trained regularly and has the necessary skill sets to overcome the challenges of the business.
